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As Beef Prices Stay Low, Small Ranchers Cry Foul

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As Beef Prices Stay Low, Small Ranchers Cry Foul

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As Beef Prices Stay Low, Small Ranchers Cry Foul

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American agricultural officials have announced they will do more to protect meet producers from meat packers. You might think the price of beef is high now, but for years most of the ranchers who raise cattle have been barely getting by. They've been going out of business by the thousands. Some say meat packers manipulate the prices that cattle producers get.

Frank Morris has more from member station KCUR in Kansas City.

FRANK MORRIS: Im standing beside a big grassy lot, just outside downtown Kansas City. Ninety year ago, Id likely be ankle deep in cow poop here, because this was one of the worlds largest stockyards.

Mr. BILL BULLARD (CEO, R-CALF USA): Decades ago, stockyards like this were the gathering point of cattle that were ready for slaughter.

MORRIS: Bill Bullard runs R-CALF USA, a cattle producers' trade organization. Hes out here too in his big white hat.

Mr. BULLARD: And the packers would send their buyers here to bid aggressively to get all the cattles that they needed.

MORRIS: But the packing houses manipulated prices to the extent that Congress passed the Packers and Stock Yards Act of 1921. Bullard can quote it line and verse.

Mr. BULLARD: Packers are prohibited from engaging in any unfair, unjustly discriminatory or deceptive practice. That portion of the act has never been implemented.

MORRIS: And Bullard says that lax oversight is putting ranchers like Randy Stevenson out of business. Stevenson used to sell his cattle at a local auction market in eastern Wyoming, but no more.

Mr. RANDY STEVENSON (Rancher): The bids became take it or leave it. It wasnt a bid. It was a price.

MORRIS: The beef industry is now dominated by four huge packing companies. They buy most of their animals through confidential contracts. Stevenson says those agreements tend to favor high-volume producers and punish guys like him.

Mr. STEVENSON: It and other things have been devastating. I filed for bankruptcy this year.

MORRIS: More than half a million cattle operations have gone under in the last three decades. And Mississippi cattleman Fred Stokes has a word for whats happening.

Mr. FRED STOKES (Cattleman): We call it chickenization.

MORRIS: You see, the kind of contract buying some cattle ranchers hate took over the poultry industry decades ago.

Mike Weaver heads Contract Poultry Growers of the Virginias, and says survivors barely hang on.

Mr. MIKE WEAVER (Contract Poultry Growers Association of the Virginias): Its like us being slaves to the corporations. They keep us in debt so that we have to keep raising our chicken. Its kind of like the old company store mentality. As long as they keep us in debt, we have to keep digging their coal.

MORRIS: The USDA wants force packers to justify any preferential pricing they give one rancher over another. But some farmers whove flourished working closely with packers say theyre not interested in a big government solution.

Mr. DOUG WOLF (National Pork Producers Council): This is a disastrous bureaucratic overreach that's bad for farmers and ranchers, bad for consumers, and bad for rural America.

MORRIS: Thats Doug Wolf, with the National Pork Producers Council. He says the current system rewards quality and consistency.

Kansas mega-rancher Bill Haw says changing the rules to prop up less efficient producers is sentimentality run amok.

Mr. BILL HAW (Rancher): There is what I call the Little House on the Prairie Syndrome. Somehow were all obliged to subsidize and provide favorable conditions for the smallest of producers in agriculture.

MORRIS: The rule change could be expensive. The meat industry cites studies it sponsored, highlighting new costs in the billions of dollars.

Bill Donald, president-elect of the National Cattlemans Beef Association, says the rule changes are too vague to make an exact damage estimate, but he thinks they do harm.

Mr. BILL DONALD (National Cattlemans Beef Association): Because I think its going to disrupt the cattle markets to the point that therell be a lot of producers that end up going broke.

MORRIS: So ranchers on both sides of the debate over the proposed Packers and Stockyards Act changes predict more pain in the industry if things dont go their way. Could be theyre both right. When asked about it at a press conference in Kansas City yesterday, U.S. Agricultural Secretary Tom Vilsack cited grim statistics: Nine out of 10 hog farmers operating in 1980 are gone.

Secretary TOM VILSACK (U.S. Department of Agriculture): Everybody satisfied with those trends? Everybody think that's a good idea?

MORRIS: Question is: Is it the market or is it something else?

Sec. VILSACK: That's a good question. And how do you ask that question? You propose rules, and then you get comments, and you have a conversation about it.

MORRIS: Its a conversation thats likely to go on a while, so as long as farmers, who get pennies on the dollar for the food they produce, feel theyre being ripped off by the big corporations they supply and those corporations continue to push relentlessly for greater efficiency on the farm.

For NPR News, I'm Frank Morris in Kansas City.

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