[Congressional Record Volume 141, Number 161 (Wednesday, October 18, 1995)]
[Extensions of Remarks]
[Pages E1974-E1975]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




      LEGISLATION TO APPOINT A COMMISSION ON MEAT PACKING INDUSTRY

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                            HON. TIM JOHNSON

                            of south dakota

                    in the house of representatives

                       Wednesday, October 18, 1995

  Mr. JOHNSON of South Dakota. Mr. Speaker, I am pleased today to 
introduce legislation that will direct the President to appoint a 
special commission on the concentration and potentially reduced 
competition in the meat packing industry. This legislation is necessary 
to ensure the existence of open and fair competition in the livestock 
and meat packing industry.
  Over the last year, livestock producers have faced devastatingly low 
prices that make it very difficult, if not impossible, to break even, 
let alone receive a reasonable return on their investment. Last spring, 
cattle and hog prices 

[[Page E 1975]]
fell to levels that could threaten the very survival of our Nation's 
independent family livestock producers. Farmers and ranchers have 
questioned whether a free and open market operates in the livestock and 
meat packing industry, and the issues of packer concentration and 
market access are at the core of their concerns.
  This legislation will require the President to appoint a commission 
on concentration in the meat packing industry. The commission would be 
chaired by the Secretary of Agriculture and be comprised of cattle, 
hog, and lamb producers; experts in antitrust legislation; economists; 
corporate chief financial officers; and corporate procurement experts. 
The commission would be charged with achieving the following goals:
  First, determine if the upcoming USDA study on concentration in the 
red meat packing industry represents current market conditions. 
Producers are concerned that the study is based on outdated information 
and does not cover critical aspects of the livestock industry. This 
study was mandated by Congress in the fiscal year 1992 Agricultural 
appropriations bill. Producers and consumers need to have confidence 
that the findings of this study will apply to current market 
conditions.
  Second, review the adequacy of current antitrust laws with respect to 
the livestock industry. Four large packing companies control over 80 
percent of the cattle slaughtered in this country. Fifteen years ago 
this level was only a third as much. Given this amount of market 
concentration, producers question whether current laws are adequate to 
ensure free, open, and competitive livestock markets.
  Third, make recommendations regarding the adequacy of price discovery 
in the livestock industry. Producers question whether the regulations 
governing price discovery in the livestock industry ensure the 
operation of a free and open market.
  Fourth, review the reasons for the large producer to retail price 
spread. Although producers have been receiving some of the lowest 
prices in recent history for their livestock, packers and retailers 
have been enjoying record profits. Both producers and consumers deserve 
to know the reasons behind this distressing price spread.
  Mr. Speaker, I invite you and my colleagues to join me in examining 
the underlying reasons behind one of the most difficult periods for 
livestock producers in recent memory. This legislation can accomplish 
this.

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