Pork Economist has Concerns with GIPSA Rules

Last week’s ag competition hearing in Colorado was supposed to focus on concentration in the meat industry.  However, many of the attendees used the forum to speak out for or against the proposed GIPSA livestock marketing rules.

Pork industry economist Steve Meyer of Paragon Economics says limiting the use of alternative marketing agreements would hurt pork producers. Speaking at an NCBA-NPPC forum prior to the workshop, Meyer said the proposed rules would make marketing contracts more expensive to use, which would mean fewer marketing contracts.

“Unlike the people that are proponents of this, I don’t think that means a lot of hogs are going to go back to being traded in spot markets or at the local auction barn,” Meyer says, “and certainly not at the terminal markets, because there aren’t any anymore—and the reason there aren’t any is that they’re costly.”

And Meyer says that will create what he calls “a tremendous incentive for vertical integration—and by the way, I don’t think that the people that wrote this rule are silly enough that they don’t know  that that is what’s going to happen.  Maybe I’m looking a little too sinister at that, but I think they realize that.”