Looking At GIPSA. I'm Greg Martin with today's Line On Agriculture.
At the recent Washington Cattlemen's Association annual meeting the buzz word just about everywhere was GIPSA which stands for the Grain Inspection, Packers and Stockyards Administration. They have proposed some changes to amend the Packers and Stockyards Act. Jess Peterson, President of Western Skies Strategies and Executive Vice President of U.S. Cattlemen's.
PETERSON: We're probably the only association that's coming down in the middle of these proposed GIPSA rules. There's things in it we really like and there's some other things we have some questions on. As you hear various perspectives and economic analysis and what not I ask you to look at what really happens when you have a large operation and look at the ability of captive supply and the large numbers in captive supply.
Peterson says it's not always a benefit for big feeder operations to get preferential access. He adds that some people say that if there is an increased liability, packers aren't going to offer premiums.
PETERSON: I have a little doubt and question on that. Because packers providing these premiums, the packers aren't doing it just out of the goodness of their hearts. The consumers are demanding and the retailers are putting pressure on it so that money is coming down because there's a value in those premium based products. And the GIPSA rule outlines very clearly if it's a value added program then that's your business justification for adding a higher price to it.
There are a number of issues that are included in the proposed changes.
PETERSON: The one issue that we support is the undue and unreasonable preferences or advantages component. I want to talk about the two things actually that NCBA and us are going to agree on and that is this packer to packer provision. There's a limit on packers to packers and how they can do the sales. We've asked that there be an exemption. If you are in the big four then obviously there shouldn't be an exemption but on down the line there should be exemptions.
And Peterson says there are two other gray areas.
PETERSON: We've also asked for clarifications from U.S. Premiums. If you are involved in U.S. Premium beef that should not make you a packer or owner. You should have a major part of the day to day operations in order to be considered a packer so we've asked for clarifications on that and then also the provision of course of the buyers and the livestock markets representing more than one packer. We're seeking additional clarification on that. So those are the two components. Again some folks are coming out completely opposed, some are coming out completely supportive
That's today's Line On Agriculture. I'm Greg Martin on the Ag Information Network.