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Study: Proposed GIPSA Rule Would Cost Broiler Chicken Industry More than $1 Billion

Tuesday, November 16, 2010

(American Meat Institute)

The livestock marketing rule proposed by USDA’s Grain Inspection, Packers and Stockyards Administration (GIPSA) will cost the broiler chicken industry more than $1 billion over five years in reduced efficiency, higher costs for feed and housing and increased administrative expenses, according to a study released today by the National Chicken Council.

This estimate does not include potential costs of litigation, lost export sales and increased consumer prices, according to the study by FarmEcon LLC, an agricultural economics consulting firm. 

“This study confirms what AMI’s economic impact analysis concluded recently: that this rule’s impact would be significant and that USDA erred in concluding that its impact was below the $100 million threshold that triggers additional government economic impact assessments,” said AMI Senior Vice President of Regulatory Affairs and General Counsel Mark D. Dopp.  “Couple the studies’ findings with the recent letter from 115 members of the U.S. House who noted the absence of a thorough economic analysis and asked Agriculture Secretary Tom Vilsack to conduct such a study and it seems to me that the Department’s marching orders are clear.” 

The cost burden from all identified sources increases over time, Elam wrote, reaching about $337 million per year in 2015.  The total identified cost over the first five years is about $1.03 billion.  

To view the FarmEcon study, click here: http://www.meatinstitute.org/ht/a/GetDocumentAction/i/64286

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