Minnesota Farmers Union

(August 15, 2010) - As the county and state fair season spreads across America, farmers, ranchers and producer groups from Maryland and Montana will cook rib-eyes, whip up omelets, grill chicken, barbecue pork steaks, butter sweet corn and pour thick milkshakes for their non-farming customers from Baltimore to Billings and nearly everywhere in between.

This fresh, wholesome goodness will come with side dishes like firm handshakes, warm smiles and pleasant banter that will connect producers with consumers, makers with customers, farmers with non-farmers

In fact, this tasty, aromatic face-to-face meeting is the whole point of each farmer and rancher’s existence, the key link that farm and ranch groups spend big bucks and big time—think the $1.25 billion-a-year checkoff industry—to build every day. It’s honest and open and not forced or phony.

And it’s priceless; it’s  retail meat-and-greet, chat-and-chew, cook-and-look, earn-and-learn for both sides.

If this interface is the top of the producer-customer pyramid—and it is—why then did three U.S. senators late this spring write a letter to U.S. Department of Agriculture Secretary Tom Vilsack assaulting USDA’s “Know Your Farmer, Know Your Food” program? After all, KYF puts all 26 USDA agencies to work in unison to “better connect consumers with local producers.”

(August 13, 2010) - Russia’s Thursday, August 5, 2010 announcement banning grain exports, primarily wheat, sent shock waves through the grain markets. The stated cause of the embargo was the drought and unusually high temperatures being experienced in Russia’s grain areas. Prime Minister Vladimir Putin is quoted in an August 5, 2010 New York Times article by Andrew Kramer as saying, “‘We need to prevent a rise in domestic food prices, we need to preserve the number of cattle and build up reserves for next year.’”

As a result of the heat and drought, the projection for the Russian grain harvest is 70 million tonnes, down from 97 million tonnes a year earlier—a 28 percent decline. Domestic grain consumption in Russia is about what they expect to produce this year. In addition, last year Russia exported 21.4 million tonnes and held 24 million tonnes of grain in year ending stocks.

The Russian embargo could be a boon for farmers in the US, where the 2009 year ending wheat stocks were 26.5 million tonnes, equal to 44 percent of production. Farmers in Australia and Argentina could also capture some of the exports that would have gone to Russia.

(August 6, 2010) - On the day that we sent the last column to the publisher, July 26th, the USDA’s Grain Inspection, Packers, and Stockyards Administration (GIPSA) made two announcements via a “To whom it may concern:” letter signed by Edward Avalos, Under Secretary for Marketing and Regulatory Programs, USDA (http://archive.gipsa.usda.gov/psp/avalosstatements.pdf). Avalos extended the comment period on GIPSA’s proposed livestock competition rule by 90 days to November 22, 2010. Secondly, Avalos released a four-page document to “clarify” what is and what is not proposed in the rule (http://archive.gipsa.usda.gov/psp/rulefacts.pdf).

In his letter he says, “it has become apparent that there are misunderstandings” concerning the proposed rule. By way of introducing the accompanying document, Avalos goes on to say, “This rule does not limit or prohibit marketing agreements, the use of premiums, or other value-added activities. The rule does not require anyone to do business with any particular person or require packers to pay all producers the same price.”

(July 30, 2010) - As the weeks have passed since the June 22, 2010 publication of a new set of regulations written by the Grain Inspection, Packers, and Stockyards Administration (GIPSA), the debate over their effect on the poultry and livestock industry has become increasingly intense. The 2008 Farm Bill mandated GIPSA develop some new regulations in response to complaints from farmers describing problems with their contracts with vertical integrators.

Supporters of the proposed regulations see them as an important step to counter market concentration and strengthen the chance for independent producers to receive a fair market price for their animals.

(July 23, 2010) - On June 22, 2010, the US Department of Agriculture (USDA), Grain Inspection, Packers, and Stockyards Administration (GIPSA), published a proposed rule describing and clarifying conduct that violates the Packers and Stockyards Act, 1929 (PSA) in the Federal Register (http://archive.gipsa.usda.gov/rulemaking/fr10/06-22-10.pdf). These proposed regulations were put forth as required by the 2008 Farm Bill. The goal of the regulations is to provide for a fairer market place for producers of poultry, beef and pork.

Two weeks ago, we examined a regulation that clarified an area where the USDA believes that the courts have misinterpreted a section of the PSA. Last week we looked at areas where the policy recommendations made by Taylor and Domina in their testimony on competition overlapped with regulations in the proposed rule.

In this column we look at new regulations in the proposed rule that were not specifically on Taylor and Domina’s list.

John F. Kennedy once said, "The farmer is the only man in our economy who buys everything at retail, sells everything at wholesale, and pays the freight both ways." The dinner tables of America need farmers to receive a fair price, and that is why Minnesota Farmers Union (MFU) was pleased to hear that the United States Department of Agriculture (USDA) has announced a proposed rule change to the Grain Inspection Packers and Stockyards Administration (GIPSA).

The proposed rule would bring common sense to GIPSA and change the current system of how livestock are procured and marketed by meat packers. The rule includes several new provisions that will grant protection to producers from previous marketing barriers, which have favored the packers, with a goal of defining and changing unfair and unreasonable practices in the industry.

Advocating for fair, transparent and competitive markets has always been a core issue for MFU, and these proposed rule changes is a step in the right direction. MFU is pleased to see that finally there is a legitimate department and administration level proposal to correct the many years of one-sided marketing that farmers have faced when selling their farm products.

Key elements that MFU supports are:

(July 18, 2010) - Watching Big Pork and Big Beef respond to proposed U.S. Department of Agriculture rules to “clarify conduct that violates the P&S [Packers and Stockyards] Act” is like watching Wall Street bankers: they find it impossible to pull their hands out of your pockets long enough to pull themselves out of the mess they’ve made.

That’s a good explanation of recent calls by the National Pork Producers Council and the National Cattlemen’s Beef Association for the Grain Inspection, Packers and Stockyards Administration, or GIPSA, to triple the customary 60-day comment period on new rules that give producers more power in today’s increasingly opaque, packer-dominated poultry and red meat markets.

What’s up with that?

Simple, say industry watchers. Both NPPC and NCBA made formal calls for the rules to be lost in the bureaucracy because the American Meat Institute, the packers’ powerful lobby, wants time to strangle ‘em in their crib, undermine GIPSA’s new administrator, J. Dudley Butler, and, hopefully, elect a more packer-friendly Congress.