WASHINGTON, May 26, 2016 – In their second hearing on the state of their industry in the last three days, livestock groups did their best to make the case for less red tape and an increased international footprint.
Speaking before the Senate Agriculture Committee, representatives from five major U.S. livestock groups told lawmakers about their priorities. Many of the remarks were similar to what was said before a House subcommittee on Tuesday, a hearing that had two of the same witnesses and featured three of the same organizations.
The groups, with some exceptions, pushed an agenda calling for approval of the Trans-Pacific Partnership, a national GMO labeling standard, and a hands-off approach from USDA on any potential changes to the Grain Inspection, Packers and Stockyards Administration.
Howard Hill, a past president of the National Pork Producers Council, testified that an analysis of a 2010 proposed GIPSA rule, which USDA said would address market fairness, concluded the regulations would have cost the pork industry upwards of $350 million annually. Witnesses from the National Cattlemen’s Beef Association and the National Turkey Federation also spoke against the rule, which NCBA President Tracy Brunner said would “make USDA the ultimate arbiter of how cattle are marketed.”
Kansas Republican Pat Roberts, who chairs the committee, mentioned a House Appropriations rider that would halt the implementation of the rule. He said he “would expect the same effort when we consider agricultural appropriations” on the Senate floor, which is expected to happen next month.
Of the witnesses, only the U.S. Cattlemen’s Association’s Joe Goggins took a different position on the GIPSA rule, saying that the Packers and Stockyards Act “needs to be modernized,” but he didn’t elaborate on potential modernizations.
On the subject of GMO labeling, the witnesses all drew a line in the sand and insisted that meat products not fall subject to any potential GMO labeling law. Feeding animals genetically modified grain does not modify the genes of the animals themselves, they said, and Brunner said it would be “commercially impossible” to verify the grain fed to livestock throughout the production process.
Sen. Debbie Stabenow of Michigan, the committee’s ranking Democrat, pushed back, pointing out that she thinks criticism of the Vermont GMO labeling law from meat groups might be out of place since meat and dairy products are exempted from that particular law. Stabenow and Roberts are currently trying to reach agreement on a national GMO labeling standard, and meat product designation is said to be a key sticking point. She said how to label meats “complicates the issue for us.”
Absent from the hearing was any talk of potential beef market collusion, despite an ongoing investigation requested by Senate Judiciary Committee chair and Ag Committee member Chuck Grassley. The Iowa Republican, who has introduced a bill to end packer ownership of livestock, expressed concerns about the share of cattle being traded in the cash market, which has dropped to about 21 percent as trading shifts to the futures market.
“To me, it seems like the cattle market has experienced a structural change over the last decade where the tail wagging the dog situation has developed,” he said.
Brunner did acknowledge the change and said it was likely due to new technology, specifically the advent of high frequency trading. He says NCBA is working to get data from the CME Group on the subject.
No matter what that data might say, Goggins said at the hearing that the futures market simply isn’t working as a financial risk management tool for many producers.
“The futures board is no longer a viable tool for us due to the volatility of the market and the amount of money it takes to hold a position," Goggins said. "This may allow us only to feed half as many cattle going forward.”
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