Nebraska meatpackers will be allowed to own hogs after that state’s lawmakers passed a bill on Feb. 5. Under LB176, introduced by Ogallala Sen. Ken Schilz last session, a person who owns, leases or holds a legal interest in a swine production operation can enter into a contract to produce swine for a packer. The producer, or contract grower, will own the land and facilities used to raise the livestock and the packer will own the swine.

Schilz said Nebraska was the only state that prohibited packers from directly or indirectly owning hogs. Because packers in other states are not subject to that restriction, packers who process Nebraska hogs simply could move to a neighboring state, Schilz said, shuttering their Nebraska plants and eliminating thousands of jobs.

Between 1997-07, the number of hog farms in the state fell by more than 60%, Schilz said, a trend he predicted will continue. He said lifting the restriction will allow Nebraska’s pork production industry to grow and compete with those in other states.

“The packer ban is not saving small farms,” Schilz said, “and Nebraska is losing to neighboring states that don’t have the ban.”

As amended, LB176 ensures a producer’s right to cancel a contract with a packer and allows the state Department of Agriculture to adopt contract regulations that would protect producers from coercion and unfair business practices. Contracts between growers and packers may not contain confidentiality clauses that would prevent growers from sharing the details of the contract with others.

Sen. John Stinner of Gering spoke in support of the bill. He said the measure will grow the state’s pork production industry, adding to the state’s property tax revenue and boosting the economies of rural communities that face population loss. “I think it’s an economic development tool,” Stinner said. “I think it’s a way of reversing some of the adverse trends we’re seeing in rural Nebraska.”

Not all are in favor

Sen. Al Davis of Hyannis spoke against the bill. He said it will eliminate the open market that currently exists in Nebraska. Producers will have little choice but to contract with large packers if they want to sell their hogs, he said. “That is really chaining those farmers to a corporation,” Davis said.

Schilz filed a motion to invoke cloture, or cease debate and vote on the bill, which prevailed 34-14. Thirty-three votes were needed.