GIPSA rule changes could devastate seedstock producers in cattle industry


SUMMITVILLE, Ohio — Cattlemen from across Ohio gathered in Carroll County Aug. 20 and Aug. 21 for the annual Ohio Cattlemen’s Association’s Roundup.

Roundup events

The roundup included tours of five farms: Burgett Angus Farms, Shamrock Vale Farms, Summitcrest Farms, Green Haven Farm and the John McKarns farm.

Also part of the roundup were three speakers, including National Cattlemen’s Beef Association President Steve Foglesong.

“Unless issues in Washington D.C. are dealt with, no amount of beef production is going to make a difference,” Foglesong said.

GIPSA changes

One issue getting front and center attention from the NCBA is the proposed rule changes by the USDA’s Grain Inspection Packing and Stockyards Administration, or GIPSA.

Foglesong told the crowd that all cattlemen need to speak up and tell the “people in D.C.” that it is not a good idea and the plan needs abandoned.

“Everyone has to take a position on the proposed rule changes by GIPSA,” he said.

Rule changes

Foglesong said the rule changes will mean the end for a lot of packers, which will only further hurt the beef industry .

The proposed GIPSA rules, boiled down, mean that packers will give one price for a carcass instead of basing it on quality. Foglesong said it will be a “one-price-fits all” system for cattle producers.

The carcass will still be graded and classified by the USDA after the purchase.

If a producer feels the packer is not following the rules, however, then they can take recourse.

The proposed rule change would also eliminate the use of an alternative marketing arrangement for premium payments.

Pricing differences

The rules would require written justification on pricing differences, which Foglesong claims would create a record keeping burden. The USDA will then be able to scrutinize individually negotiated transactions.

“This is a trial lawyer’s dream come true,” Foglesong said.

He said all that will be required for a complaint is the lack of a perception of fairness, creating an easy avenue for a lawsuit to be filed.

Foglesong said the best thing would be for the rule to be taken off the table.

The rule had been included in the 2008 farm bill, Foglesong said, but legislators had removed it. Now, it has resurfaced in the form of a proposed GIPSA rule.

Seedstock producers

He added one class of producers that will suffer the most damage is seedstock producers, such as Summitcrest Farms, which hosted the roundup luncheon where the cattle leader was speaking.

The owners have spent many years building their business around seedstock that produce highly valuable carcasses. Now, for some operations, the advantage to producing above-average carcasses may disappear if the rule goes into effect, Foglesong contends.

Foglesong told the group that in today’s business climate and with all of the action in Washington D.C., cattlemen have to work to get the story of agriculture out in the open.


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