Changes to the Grain Inspection, Packers and Stockyards Administration rules as they affect livestock marketing contracts were originally written to benefit the poultry industry. But the U.S. pork industry has concerns over the proposed changes as they will have a negative effect on the marketing of pork.
Mark Legan - an Indiana Pork Producer and member of the National Pork Producers Council Board of Directors says the changes hit home in two ways. Legan explains….
“In our farm, here we used, past tense, used production contracts with neighbors, and people to feed livestock with us as a means to help with our risk management practices. We’ve not had to build as many buildings as we would have otherwise, and it’s allowed some of the neighbors, who have fed pigs for us in the past to help with their living standards to create a living and utilize some older buildings.”
Legan says the proposed GIPSA rule also affects him from a marketing standpoint...
“GIPSA’s basically wanting pigs to be sold at the same price, or buyers to pay the same price for all the pigs. Well, not all pigs are created equal, whether it’s on the time they’re delivered into the plant, or the size lots that they’re delivered into, or even the quality differences. I think the rule makes some real concerns in terms of that.”
Legan says the proposal interferes with current pork marking practices and it will impact all producers, both large and independent. What practices will pork producers have to change?...
“When it comes to production contracts we have to be able to show why we’re paying different contractors different rates in terms of the facilities used. In the past we’ve had some barns that were rented or contracted with producers for various lengths of times, there’s a time element to production contracts. And also when it comes to pig purchase agreements with packers, the rule would basically require that all the pigs be purchased at the same price, and there is a difference in the pigs, and the services that the producer can offer to the packer.”
Legan encourages producers to submit their thoughts and concerns during the present comment period on the proposed GIPSA rule. Then plan to visit with their elected lawmakers so they better understand the situation. Legan expects lawmakers will be involved at some point.