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Pork Producer Says New GIPSA Rules Will Hit Hard

by 5m Editor
7 October 2010, at 11:02am

US - An Indiana pig farmer explains that the new GIPSA rules will have a devastating effect on his business.

If Agriculture Secretary Tom Vilsack says that livestock farming is one of the few bright spots in the US economy, why aren’t Indiana pork producers smiling? asks Coatesville, Indiana, pork producer Mark Legan in a recent opinion-editorial in the Indianapolis Star cited by the American Meat Institute.

He wrote: "Perhaps it has something to do with the disastrous rules Vilsack's department has proposed for our industry. The draft regulations, unveiled in June, are a major bureaucratic overreach that will dictate contract terms, limit farmers’ ability to sell their animals, make it harder to get financing and eliminate jobs."

Mr Legan explained that while the Agriculture Department argues the draft regulations are needed to increase competition, they will in fact, do the opposite:

He continued: "They will reduce competition and encourage meatpackers to raise their own animals rather than relying on producers like me.

"The new rules will make it nearly impossible to negotiate premiums for higher-quality livestock without justifying the increases with a written cost analysis. That will be devastating for my farm…All my hogs could end up bringing the same price, regardless of their quality."

According to Mr Legan, the majority of livestock producers are happy with how their markets operate.

He added: "Contracts offer a guaranteed income over time. In fact, today most agricultural bankers want producers to have that guarantee before they'll lend to them.

"Forcing more farmers into the cash market – as the USDA regulations do – would be a disaster for many producers. Not only can the risks be greater, but cash market prices can fluctuate wildly. USDA needs to go back to the drawing board and come up with something more in line with what it was asked to do."

To read the full opinion, click here.