Ranchers reaching out for help from lawmakers

 

By Kristi Shields 

Staff writer

8-6-2020

 

Sanpete County ranchers are busy reaching out to state and national lawmakers to help them cope with an unfair meat packing industry.

Many of these ranchers are being forced to sell their livestock below the cost of production and they are sending out letters and holding meetings to make sure lawmakers are aware of their problems.

Rancher Zachary Jensen, owner of the M&K Ranch in Centerfield, hosted a conference call between several ranchers and Rep. Chris Stewart to discuss the issue; Atty. Gen. Sean Reyes wrote a letter to the U.S. Atty. Gen. William Barr; and Carson Jorgensen, a Mt. Pleasant sixth-generation rancher, wrote a letter to Vice President Mike Pence that he also distributed to Gov. Gary Herbert’s office and Utah Agriculture Commissioner Logan Wilde.

Local ranchers say the current meat marketplace is dominated by the four major packing plants— Tyson Foods, JBS Beef Co., Cargill Meat Solutions and National Beef. The companies control the prices through algorithms and trading, meaning smaller competitors often don’t even know how much the livestock they are raising are worth.

The ranchers bid their cattle at auctions, only to figure out after the fact that they are losing hundreds of dollars per head, while processors are making thousands of dollars per animal.

Rep. Stewart said, “I don’t think we’ve ever seen such a disparity,” adding that he wants to do what he can to solve the problem.

Rep. Derrin Owens, R-Fountain Green, said he has heard from ranchers and farmers about the issue, and “I share their concern.” He said there is a major gap between what ranchers and processors make per head of cattle. In fact, he described the ranchers’ net on beef as “the lowest price for meat in recorded history.”

If the end goal is for farmers to work in a fair market, the way to get there is to reduce state and federal regulations, Utah representatives said.

U.S. Sen. Mike Lee said, “We impose burdensome regulations that create barriers to entry, stifling competition and leaving consumers with fewer choices, higher prices and lower quality.”

The law governing marketing of meat— the Wholesome Meat Act of 1967 — prohibits the resale of a farmer’s processed meat to the general public if it is processed in a slaughter facility that isn’t subject to the USDA rules and inspections.

Lee said, “This means that only large meat processors that have the resources to hire a full-time USDA inspector may sell meat to consumers.”

Owens said it is common for farmers to still package their own meat; however, they sell it as “private sales,” where the rancher sends meat to the local butcher shop for the purchaser, who then pays the rancher directly when the rancher delivers finished cuts to the purchaser’s home.

“If we can pull down regulations,” Owens said, “we can make it more of a fair market. You lose some freedom with all those regulations, and a fair market is part of it.”

In a campaign video, Jon Huntsman told Jorgensen, the Mt. Pleasant rancher, that regulatory barriers are killing ranching, and the solution is to reintroduce smaller scale processing, then look at expanding local markets, so farmers can sell their own products.

Jorgensen said, “That’s what we need again, to spread out this load, so people can have the option to buy local.”

Utah Rep. Carl Albrecht, R-Richfield, is working with the American Farm Bureau Federation and the USDA on legislation and regulatory changes to do just that.

“There is a national problem that needs to be solved,” Albrecht said. “And hopefully we can resolve it.”

Matt Hargreaves, of the Utah Farm Bureau, said the Utah Farm Bureau wants to focus more on local farming and how to provide better options to the farmers. The Farm Bureau’s goal is to allow farmers to keep more of their dollars and give retailers the opportunity to buy directly from farmers.

Albrecht said he and Lee are working on passing a bill that allows ranchers to sell their own beef locally, which would basically override the federal law prohibiting ranchers from selling to the general public.

This option will give farmers a fair market because they don’t have to go through the big four meat main processors. They would be legally able to have their product packaged through their local butchers.

“That would help rural economies a lot,” Albrecht said.

Lee said, “I hope that bringing attention to these critical weaknesses in our food supply chain will motivate legislators to consider regulatory fixes and prompt antitrust enforcers to closely examine the cause and effects of concentration in the meatpacking industry.”

Stewart said the regulations that allow the near monopoly in the packing industry actually affects commercial farming companies more than the small producers.

Stewart said at the end of USDA’s recent investigation into the major meat packers, one of the agency’s suggestions was that regulations be updated to make it easier for small plants to come online. “I think that is something we should be looking at,” he said.

The rationale for the regulations requiring USDA inspection is to ensure that the meat the public is buying from stores is safe.

“If we want to solve the pricing problems, it will take a more comprehensive, economic solution than just updating the red-tape requirements,” Stewart said. “I don’t think USDA inspection requirements are the main cause of vertical integration in meat markets. I think it is far more complicated than that.”