The meat industry is disappointed in the United States Court of Appeals' ruling in Hampton Feedlot v. Nixon. We are currently reviewing additional legal options available to us.
However, assuming the law stands, we are concerned that the practical impact of Missouri’s “price discrimination” will be to hinder severely the cash market for livestock in the state. Given the manner in which the law is written, it is unclear how a company that purchases livestock could ensure compliance with the law and avoid its severe penalties for violations.
For example, the law says that the packers must notify livestock sellers of any premiums paid. Yet the law does not specify a time period for that notification. Is it any premiums paid in a day, a week, a month? In addition, the law does not specify how a company must notify a livestock producer. Is it via computer? By posting a notice on a wall? By placing a notice in a newspaper?
The law also fails to consider how rapidly market conditions can change due to government reports about livestock supplies, weather changes and even political events. Instead the law can be read to force the buyer to pay the highest possible price regardless of changes in market conditions. That simply isn’t fair.
In practical terms, companies will be forced to buy Missouri livestock only on a grade and yield basis in an effort to avoid penalties. The only other option would be to source livestock from other states - a scenario that is likely to become reality. It is our contention that this law ultimately will harm the very people it was intended to help.
AMI represents the interests of packers and processors of beef, pork, lamb, veal and turkey products and their suppliers throughout North America. Headquartered in Washington, DC, the Institute provides legislative, regulatory and public relations services, conducts scientific and economic research, offers marketing and technical assistance and sponsors education programs.