Agriculture Secretary Tom Vilsack weighed in this week on a bill to create a Packers and Stockyards Act (PSA) investigator at USDA to boost price discovery and transparency in the highly concentrated livestock sector. He says a Packers and Stockyards Act investigator could be part of broader USDA action to deal with unfair market practices harming small independent producers.
“I think it is part of what needs to be done. Clearly, Packers and Stockyards, the lines need to be very specifically strengthened and drawn, so that it’s clear what is an undue preference, clear what is unfair practices, clear what the scope of work ought to be, clear what competition standard we have to reach, in order to be able to have enforcement—I think that’s part of it.”
The other part is expanding processing capacity to boost market competition, now concentrated among just a handful of major packers. Vilsack promises a creative solution in the months ahead, possibly using COVID-19 relief or other funds to spur new meat processing plants.
“I think, this summer, we’re going to begin the process of identifying how much we think we can commit from resources that we have, Senator, it’s going to be a fairly significant amount.”
A sponsor of the Packers Act inspector bill, Jon Tester of Montana, suggested the possibility state inspected plants that wouldd be able to sell across state lines. But Vilsack noted the challenge to that idea.
“The challenge is basically, getting them to make sure that they have the equivalency, in terms of inspection. And the reason this is important, is because we don’t want to basically create chaos in the export market. If we have different levels of inspection with product crossing state lines, then we may have difficulty selling our beef and so forth, overseas.”
Tester also suggested a revolving low-interest loan fund to help finance new packing plants. Vilsack is looking at that idea, as the Senate Ag Committee looks at various bills in coming weeks to help small producers hurt by unfair and discriminatory market pricing.