[Congressional Record Volume 141, Number 205 (Wednesday, December 20, 1995)]
[Senate]
[Pages S18994-S18996]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                   LIVESTOCK CONCENTRATION REPORT ACT

  Mr. DOLE. Madam President, I now ask unanimous consent that the 
Senate now proceed to the immediate consideration of calendar No. 261, 
S. 1340; further, that the Hatch amendment No. 3105, which is at the 
desk be considered agreed to, the committee amendment be agreed to, the 
bill be deemed read the third time, and passed, as amended, the motion 
to reconsider be laid upon the table, and that any statements relating 
to the bill be placed in the Record.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  So the amendment (No. 3105) was agreed to, as follows:

       Sec. 4 Duties of Commission: delete lines 9 and 10 (page 9) 
     and add: (2) to request the Attorney General to report on the 
     application of the antitrust laws and operation of other 
     Federal laws applicable, with respect to concentration and 
     vertical integration in the procurement and pricing of 
     slaughter cattle and of slaughter hogs by meat packers;
       Sec. 4(b) Solicitation of Information.
       line 7 page 10 insert: ``industry employees'.

  So the committee amendment was agreed to.
  So the bill (S. 1340), as amended, was deemed read the third time, 
and passed, as follows:

                                S. 1340

       Be it enacted by the Senate and House of Representatives of 
     the United States of America in Congress assembled,

     SECTION 1. SHORT TITLE.

       This Act may be cited as the ``Livestock Concentration 
     Report Act''.

     SEC. 2. DEFINITIONS.

       In this Act:
       (1) Antitrust laws.--The term ``antitrust laws'' has the 
     meaning provided in subsection (a) of the first section of 
     the Clayton Act (15 U.S.C. 12(a)), except that the term 
     includes section 5 of the Federal Trade Commission Act (15 
     U.S.C. 45) to the extent the section applies to unfair 
     methods of competition.
       (2) Commission.--The term ``Commission'' means the 
     Commission on Concentration in the Livestock Industry 
     established under section 3.
       (3) Study of concentration in the red meat packing 
     industry.--The term ``study of concentration in the red meat 
     packing industry'' means the study of concentration in the 
     red meat packing industry proposed by the Department of 
     Agriculture in the Federal Register on January 9, 1992 (57 
     Fed. Reg. 875), and for which funds were appropriated by 
     Public Law 102-142 (105 Stat. 878).

     SEC. 3. ESTABLISHMENT OF COMMISSION.

       (a) In General.--A Commission on Concentration in the 
     Livestock Industry shall be established that shall be 
     composed of--
       (1) the Secretary of Agriculture, who shall be the 
     chairperson of the Commission; and
       (2) 2 members who represent each of the following 
     categories:
       (A) Cattle producers.
       (B) Hog producers.
       (C) Lamb producers.
       (D) Meat packers.
       (E) Experts in antitrust laws.
       (F) Economists.
       (G) Corporate chief financial officers.
       (H) Corporate procurement experts.
       (b) Appointment.--The members of the Commission appointed 
     under subsection (a)(2) shall be appointed as follows:
       (1) The President shall appoint 4 members.
       (2) The Majority Leader of the Senate shall appoint 4 
     members.
       (3) The Minority Leader of the Senate shall appoint 2 
     members.
       (4) The Speaker of the House of Representatives shall 
     appoint 4 members.
       (5) The Minority Leader of the House of Representatives 
     shall appoint 2 members.

     SEC. 4. DUTIES OF COMMISSION.

       (a) In General.--The Commission shall--
       (1) determine whether the study of concentration in the red 
     meat packing industry adequately--
       (A) examined and identified procurement markets for 
     slaughter cattle in the continental United States;
       (B) analyzed the effects that slaughter cattle procurement 
     practices, and concentration in the procurement of slaughter 
     cattle, have on the purchasing and pricing of slaughter 
     cattle by beef packers;
       (C) examined the use of captive cattle supply arrangements 
     by beef packers and the effects of the arrangements on 
     slaughter cattle markets;
       (D) examined the economics of vertical integration and of 
     coordination arrangements in the hog slaughtering and 
     processing industry;
       (E) examined the pricing and procurement by hog 
     slaughtering plants operating in the Eastern corn belt;
       (F) reviewed the pertinent research literature on issues 
     relating to the structure and operation of the meat packing 
     industry; and
       (G) represents, with respect to the matters described in 
     subparagraphs (A) through (F), the current situation in the 
     livestock industry compared to the situation of the industry 
     reflected in the data on which the study is based;
       (2) to request the Attorney General to report on the 
     application of the antitrust laws and operation of other 
     Federal laws applicable, with respect to concentration and 
     vertical integration in the procurement and pricing of 
     slaughter cattle and of slaughter hogs by meat packers;
       (3) review laws and regulations relating to the operation 
     of the meat packing industry regarding the concentration, 
     vertical integration, and vertical coordination in the 
     industry;
       (4) review the farm-to-retail price spread for livestock 
     during the period beginning on January 1, 1993, and ending on 
     the date the report is submitted under section 5(a);
       (5) review the adequacy of price data obtained by the 
     Department of Agriculture under section 203 of the 
     Agricultural Marketing Act of 1946 (7 U.S.C. 1622);
       (6) make recommendations regarding the adequacy of price 
     discovery in the livestock industry for animals held for 
     market; and
       (7) review the lamb industry study completed by the 
     Department of Justice during 1993.
       (b) Solicitation of Information.--For purposes of complying 
     with paragraphs (2), (3), and (4) of subsection (a), the 
     Commission shall solicit information from all parts of the 
     livestock industry, including livestock producers, livestock 
     marketers, industry employees, meat packers, meat processors, 
     and retailers.

     SEC. 5. REPORT AND TERMINATION.

       (a) Report.--Not later than 90 days after the study of 
     concentration in the red meat packing industry is submitted 
     to Congress, the Commission shall submit to the President, 
     the Speaker of the House of Representatives, and the 
     President pro tempore of the Senate a report summarizing the 
     results of the duties carried out under section 4.
       (b) Termination.--Not later than 30 days after submission 
     of the report, the Commission shall terminate.
  The title was amended so as to read: ``A bill to establish a 
Commission on Concentration in the Livestock Industry, and for other 
purposes.''
  Mr. PRESSLER. Madam President, I am pleased that an agreement has 
been reached to enable S. 1340 to pass the Senate. I have worked 
closely with Majority Leader Dole and Minority Leader Daschle on this 
issue that is vitally important to livestock producers in South Dakota 
and the Nation.
  This issue has been a troubling one for producers in South Dakota for 
more than a year now. Frankly, I still say that the U.S. Department of 
Agriculture can take immediate action today and not have to wait for 
this legislation to become law.
  Yesterday, I called Secretary Glickman to discuss this with him. He 
told me he was watching Senate action on this issue and would appoint a 
Commission.
  Madam President, now is the time to act. Twice before I have urged 
the Secretary to take this action. I ask unanimous consent that two 
letters on this subject be printed in the Record at the conclusion of 
my remarks.
  The PRESIDING OFFICER. Without objection, it is so ordered. 
  
[[Page S18995]]

  (See exhibit 1.)
  Mr. PRESSLER. This past August I chaired a field hearing of the 
Senate Commerce, Science and Transportation Committee in my home state 
of South Dakota. It was the first time that a Commerce Committee 
hearing had been held in South Dakota and the turnout was tremendous.
  Hundreds of people attended the hearing and witness after witness 
clearly demonstrated the importance of this issue and the need for 
action is needed because extremely low prices for fed cattle and calves 
deeply hurt South Dakota ranchers. Further, the impact of this will be 
felt beyond our ranches. It affects our rural communities, as well as 
larger towns and cities. With ranchers having fewer dollars to spend, 
small businesses in our small towns could be put in jeopardy.
  What is of great concern to producers is the fact that while cattle 
prices are nearing, or at record lows, retail prices have not shown any 
significant drop.
  This represents a combination punch to South Dakota ranchers --as 
producers, they are getting fewer dollars for their livestock; yet, as 
consumers, ranchers--armed with fewer dollars--are forced to pay more 
to put their own product on the dinner table.
  To say this is a concern of my fellow South Dakotans is a gross 
understatement. Thousands of South Dakotans have written, called, or 
visited with me on this. They rightly are concerned about the impact of 
the current situation on their ability to run their farms and 
businesses and provide for their families.
  I would like to commend the South Dakota Secretary of Agriculture, 
Dean Anderson, for being a national leader on this issue. Dean was 
responsible for bringing this matter before the National Association of 
State Departments of Agriculture who have called for an investigation 
that we are asking for in this bill. I am proud of Secretary Anderson's 
leadership on this matter.
  In summary, I am pleased the Senate is taking action in support of 
South Dakota ranchers. However, this action could get delayed in the 
other body. Therefore, I ask once again that Secretary Glickman 
immediately appoint a Commission on this subject. Either way, I will 
not rest until this Government finally addresses this disturbing 
problem facing our livestock producers.

                             Exhibit No. 1


                                                  U.S. Senate,

                                 Washington, DC, October 17, 1995.
     Hon. Dan Glickman,
     Secretary, Department of Agriculture, Washington, DC.
       Dear Mr. Secretary: I am writing you to ask you to appoint 
     a commission to make recommendations on action needed to 
     assure competitive markets in the livestock industry.
       As you well know Mr. Secretary, for some time now there has 
     been great concern among livestock producers about packer 
     concentration in the marketing of livestock. In 1992, 
     Congress appropriated $500,000 for the U.S. Department of 
     Agriculture to issue a report on this very subject. That 
     report is due shortly. However, that report only contains 
     data through 1993. Since 1993, retail price spreads and the 
     prices that producers have received for their livestock do 
     not even compare with the 1992 or 1993 numbers.
       The Congress continues to be concerned on this subject. In 
     August, the Senate Commerce, Science and Transportation 
     Committee held a field hearing in Huron, South Dakota, on 
     this matter. The high attendance and strong concern by South 
     Dakota ranchers was overwhelming and universal. Previously, I 
     requested that you appoint an independent counsel to 
     recommend an action plan to remedy problems livestock 
     producers are experiencing due to captive supplies by 
     livestock packers. Legislation is expected to be introduced 
     shortly to establish a Presidential Commission on this 
     matter.
       Mr. Secretary, you have the authority to establish a 
     commission immediately and begin to find solutions to this 
     problem. You do not need to wait for legislation. An 
     independent review would ensure a completely unbiased report 
     for an appropriate action plan.
       I urge your prompt attention to this request and look 
     forward to working with you to resolve this problem.
           Sincerely,
                                                   Larry Pressler,
     United States Senator.
                                                                    ____



                                                  U.S. Senate,

                               Washington, DC, September 22, 1995.
     Hon. Dan Glickman,
     Swecretary, Department of Agriculture, Washington, DC.
       Dear Mr. Secretary: I ask that you appoint an independent 
     counsel to recommend an action plan to remedy problems 
     livestock producers are experiencing due to captive supplies 
     by livestock packers. I also ask that the counsel's report be 
     made simultaneously with USDA's report on captive supplies 
     that is expected in December.
       As you know, I recently held a U.S. Senate Commerce, 
     Science and Transportation Committee field hearing on captive 
     supplies, controlled markets and impacts on consumers and 
     producers. There was a large turnout for this hearing. 
     Collectively, the witnesses clearly articulated the need for 
     federal action on this issue. With livestock prices near 
     record lows, consumers are not seeing the price of meat go 
     down at the grocery store as the market should dictate. 
     Something must be done soon.
       Several things were learned at the hearing. The hearing 
     record will show widespread concern that something needs to 
     be done to ensure fair and competitive pricing in the 
     livestock industry. One troubling fact was discovered at the 
     hearing. It was learned that the data in the captive supply 
     report USDA is expected to release in December only covers 
     the years 1992 and 1993. As you know, the current cattle 
     prices are near record lows, while in 1992 cattle prices were 
     near record highs.
       I believe an independent counsel could review existing 
     data, including the report you expect to release this 
     December. As you know, federal officials have been studying 
     this issue since 1992, while concentration in the packing 
     industry has grown during this time. An independent counsel 
     would be able to review studies and documents of USDA, 
     Justice and the Federal Trade Commission and quickly review 
     current market conditions. An independent review would ensure 
     a completely unbiased report on an appropriate action plan. 
     We do not need to wait for months after USDA issues its 
     report to determine the best course of action. An independent 
     counsel could take care of that and help resolve this issue. 
     Now is the time to act. We don't need any more reports.
       Mr. Secretary, many cattlemen in South Dakota may not make 
     it this year unless the pricing problem is corrected. The 
     current retail price spread cannot be explained or justified 
     with ranchers receiving such low prices for their cattle. I 
     share the cattlemens' concerns over possible market 
     manipulation.
       I urge your prompt attention to this request, and look 
     forward to working with you to resolve this problem.
           Sincerely,
                                                   Larry Pressler,
                                                     U.S. Senator.

  Mr. BURNS. Thank you, Madam President. I rise today in support of S. 
1340, a bill to provide for a commission to study the concentration of 
packers in the United States. I am very pleased to be a cosponsor of 
this legislation. It is my hope that the Senate will pass this bill 
without prolonged debate, so that the livestock producers of this 
country will have a few answers to the questions they have about the 
packers.
  This bill will provide the hardworking men and women who work on the 
land raising livestock to have an insight into what is occurring in the 
market today. The producers in this country have, recently, seen 
extremely low prices for their livestock. This is related to several 
different trends in the market. Among these trends is the low number of 
packing houses left in the country. This concentration of packing 
houses places a burden on the producer to sell his or her livestock to 
a select location close to their operation. In my State of Montana, 
this is a very real burden, since we no longer have a packing house in 
our State.
  Another of the concerns that the producers have center around the 
number of live cattle that the packers own at this time. The terms of 
contracts let on these cattle are not widely known and those that are 
known are extremely confusing to all involved. These contracts have 
placed many of the smaller producers in the peril. The small operation 
in the country that may run less than a hundred head of cattle feel the 
pinch the packers have put on them through the major operations in the 
Midwest.
  The most easily measured and common aspect of the concentration of 
packing houses, relates to the consumer cost of meat. Recently I was in 
a local grocery store, and noticed the cost of a pound of hamburger and 
was astounded. My astonishment came from the fact that I had just 
returned from Montana, where I had witnessed the price being paid for 
live cattle at the sale ring. The difference in the price per pound for 
live cattle compared to the price we must pay for the final product is 
way beyond the lines of reason. And $20 cows do not draw the price of 
$5-a-pound steak. Where is the responsibility to the producers of the 
livestock in this country?
  Madam President, it is my hope that this measure will pass today and 
that the President will quickly sign and nominate the members of the 
study 

[[Page S18996]]
commission. The time has come that we need to find out the 
discrepancies in the pricing system for our meat, today. Thank you and 
I yield the floor.
  Mr. DOLE. I thank my colleague from Minnesota. There will be no more 
votes this evening.
  Mr. GRAMS. Madam President, I request that I be allowed to speak as 
in morning business.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  (The remarks of Mr. GRAMS pertaining to the introduction of S. 1441 
are located in today's Record under ``Statements on Introduced Bills 
and Joint Resolutions.'')

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