12—Lancaster Farming, Saturday, June 23. 1973
Policy Reminder Issued
Meat Packer Practices
Meat packers who feed
livestock on a custom basis and
those who sell livestock to other
packers may face charges of
violating the Packers and
Stockyards Act, the U. S.
Department of Agriculture
(USDA) said
Marvin L. McLain, Ad
ministrator of USDA’s Packers
and Stockyards Administration
(P&SA), said this public
reminder is being given so all
packers will fully understand the
applicability of the P&S Act to
such operations.
Custom feeding is the feeding
and finishing for market of
livestock owned by others, either
on a fee basis or by charges for
services and feed. Custom
feedlots may also purchase
feeder cattle for the actual
owners, and then sell the
livestock for the owner when they
are finished and ready for
market
Packers are not prohibited
from feeding their own livestock
for their own slaughter purposes.
“The historical position of our
agency,” McLain said, “has been
to regard the practice by packers
of feeding livestock on a custom
basis, and the selling of livestock
to another packer or another
buyer, as violations of the P&S
Act.
“If we find that any packer
operates or controls a custom
feedlot, or sells livestock to
others, we will consider formal
administrative action charging
violation of the P&S Act ”
McLain pointed out there has
been a major change in the
marketing of fed cattle
throughout the United States in
recent years In the past, finished
1 - ”
, MA Jk «* - •* v «. .i -
cattle were marketed primarily
through terminal stockyards,
auction markets, or directly by
an independent feeder of cattle.
Recently, however, large
numbers of cattle are being
finished in large commercial
feedlots on a custom-feeding
basis, and sold directly to
packers. This has made feedlots
a major marketing channel for
finished cattle.
McLain said his agency is
concerned that if packers gain
control of custom feedlots, they
would control the marketing
facilities for a major share of
slaughter livestock, as well as
control of selling and buying
functions and other marketing
services. The elimination of such
packer control of stockyards and
marketing facilities was one of
the primary objectives of the
Packers and Stockyards Act,
enacted in 1921.
Also noted has been a trend for
packers to buy feeder cattle,
have them fed under contract or
in their own facilities, and then
sell the fmished cattle to com
petitor packers or other buyers.
The potential for manipulation of
markets and restriction of
competition in such a situation is
great, McLain said.
The Packers and Stockyards
Administration, which ad
ministers the P&S Act, reported
there have been no serious
problems so far, but said the
reminder is considered
necessary m view of growing
trends. The restatement of P&SA
policy is intended to allow
packers to voluntarily comply
with provisions of the P&S Act,
and eliminate the need for formal
action.
*A~ -
The P&S Act regulates
business practices of those in
livestock and live poultry
marketing and meat and poultry
packing to foster free and open
competition in the marketplace.
The Act is intended to
safeguard farmers and ranchers
from marketing practices which
would deprive them of true
market value for their livestock
and poultry; protect members of
the industry from unfair,
deceptive, unjustly
discriminatory or monopolistic
practices of competitors; , and
protect consumers against unfair
business practices in the
marketing of meats and poultry.
0L
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