Statement of the American Meat Institute on Ag Economists' Debate Over Packer Ownership Ban
(Attribute Statement to AMI President and CEO J. Patrick Boyle)
Today, another paper by agricultural economists was released - the fourth in the past two months - attempting to explain the market impact of an amendment in the Senate’s farm bill banning packer ownership, feeding and control of livestock. Their views differ sharply with other economists.
The fact that leading ag economists strongly disagree about this amendment’s impact suggests that the amendment itself has been neither well researched, thoroughly studied nor adequately discussed. Thus, at a very basic level, this amendment is premature and should not become law. That is why the American Meat Institute (AMI) and others have supported the launch of a thorough economic study by the U.S. Department of Agriculture prior to moving forward with any new legislative restrictions or mandates upon livestock farmers or meat packers.
If, as today’s fourth paper asserts, meat packers exert market power illegally in particular areas, they should be prosecuted by USDA’s Grain Inspection/Packers and Stockyards Administration (GIPSA) under the Packers and Stockyards Act. This Act is an additional layer of fair business practice mandates on meat packers, above and beyond the Sherman Act and the Clayton Act, enforced by the U.S. Department of Justice, which dictate antitrust and competitive business practices for the entire U.S. economy. Between these three laws and the various agencies that enforce them, there are ample resources available to prosecute meat companies for anticompetitive behavior.
The entire U.S. economy - from manufacturers to service providers - has moved towards both vertical and horizontal integration as a means of survival and striving for excellence. Barring one sector of the economy, meatpackers, from utilizing this model is unfair, punitive and lacking in any credible evidence.