NPPC Opposes Legislation Limiting Marketing Contracts

The National Pork Producers Council (NPPC) opposes legislation introduced by Rep. Cynthia Lummis R-WY) that was introduced last week that would “target unfair meat packer practices and help restore a level playing field to independent livestock producers.”

HR 2631, the “Livestock Marketing Fairness Act,” which is identical to a bill sponsored by Sen. Mike Enzi (R-WY), would:

• Require marketing agreements to have a firm base price derived from an external source.
• Require forward contracts to be traded in open, public markets. (Forward contracts guarantee a price for a specified amount and quality of product and are used to reduce risk by “locking in” a price ahead of an expected purchase date.
• Exempt producer-owned cooperatives, packers with low volumes and packers with only one processing plant.

Lummus claims the changes are needed because there is a lack of transparency in the livestock marketplace that can lead to price manipulation and abuse by some operations.

NPPC objects to both the Lummus and Enzi bills because they would restrict private marketing agreements and contracts between producers and packers.

NPPC points out there already is transparency in the livestock markets through the federal mandatory price reporting law, which requires packers to convey, twice a day, the prices they pay for livestock.