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AMI Guest Editorial: GIPSA Rule Would Set Back Meat Industry

Thursday, October 7, 2010

(American Meat Institute)

“In a time of economic uncertainty, where real jobs are on the line and unemployment is an unfortunate reality, it doesn't make a lot of sense to reformulate the business model for a highly successful industry without any solid justification for doing so,” says AMI President and CEO J. Patrick Boyle in a guest editorial in the Traverse City Record-Eagle.

Boyle notes that meat and poultry is the largest sector of the American agricultural economy, employing more than 6 million workers and generating a total economic output of more than $830 billion — nearly 6 percent of the GDP. In addition, Americans spend less disposable income on food than any other country, and only 1.5 percent of that income on meat and poultry products.

“This success story is why cattlemen, hog farmers, meatpackers and processors were dumbfounded when the United States Department of Agriculture’s Grain Inspection, Packers and Stockyards Administration (GIPSA) published a proposed rule in June that effectively will dismantle the business models of many producers and packers and set the industry back 20 to 30 years,” Boyle writes.

Boyle says the rule would effectively end the use of marketing agreements, which have emerged as one of the most effective ways to enhance product safety, ensure product consistency and manage risks in a still-volatile industry. In addition, the rule would forbid packers who own livestock from selling their livestock to another packer. Thus, for example, a packer with only one plant in Michigan would be forced to transport cattle that it owns in Missouri or Nebraska more than 1,000 miles to the Michigan plant. This type of needless inefficiency not only endangers the welfare of the animals, it could eventually drive the Michigan packer out of business.

“It's not often the USDA completely misses the mark, but this rule is that exception. It's time to pull the rule and go back to the drawing board,” Boyle concludes.

To view a copy of the op-ed in its entirety, click here: http://www.meatinstitute.org/ht/a/GetDocumentAction/i/63296

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