Assessment of the Cattle and Hog Industries Calendar Year 2000

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normally the largest and most complex investigations conducted by the Agency. During FY 2000, 17 decisions and orders were issued against 25 entities for violating the P&S Act. The decisions included 13 administrative decisions against 21 entities, and 4 decisions and orders obtained through the Department of Justice. The orders included more than $117,000 in civil penalties and 24 cease-and-desist provisions involving unfair trade practices or anti-competitive activities. P&SP will address the concerns discussed in this report by monitoring changes in industry structure and behavior, and examining practices that appear to be unlawful under the P&S Act. In addition to monitoring, P&SP’s actions may include formal investigations, regulatory initiatives, or research and other analyses to assess the economic, competitive, and/or trade practice implications of the structural and behavioral changes. 10
Introduction This report describes the general economic state of the cattle and hog industries, changing business practices in those industries, and activities in those industries that appear to raise concerns under the Packers and Stockyards Act of 1921 (P&S Act). The report is in response to a requirement in the Grain Standards and Warehouse Improvement Act of 2000 (Pub. L. No. 106-472), enacted on November 9, 2000, which amended the Packers and Stockyards Act of 1921. Specifically, the Grain Standards and Warehouse Improvement Act of 2000 states: “Not later than March 1 of each year, the Secretary shall submit to Congress and make publicly available a report that – (1) assesses the general economic state of the cattle and hog industries; (2) describes changing business practices in those industries; and (3) identifies market operations or activities in those industries that appear to raise concerns under this [P&S] Act.” The purpose of the P&S Act, which has been amended to keep pace with changes in the industry, is to promote fair competition and fair trade practices, safeguard farmers and ranchers, and protect consumers and members of the livestock, meat, and poultry industries from unfair business practices that can unduly affect meat and poultry distribution and prices. The Secretary of Agriculture has statutory authority to enforce the P&S Act, and has delegated that responsibility to the Administrator of the Grain Inspection, Packers and Stockyards Administration (GIPSA). The U. S. Department of Agriculture’s Packers and Stockyards Program (P&SP), part of GIPSA, has monitored economic and trade practice developments in the cattle and hog industries since 1921. 1
Page 1 and 2: Assessment of the Cattle and Hog In
Page 3 and 4: Contents Executive Summary.........
Page 5 and 6: Packers are purchasing larger numbe
Page 7 and 8: concentration, in and of itself, is
Page 9: Concerns about Fair Trade and Finan
Page 13 and 14: The liquidation phase may be slowin
Page 15 and 16: so, there likely would be pressures
Page 17 and 18: Changing Business Practices in the
Page 19 and 20: Slaughter plant size has also incre
Page 21 and 22: cooperatives help their members imp
Page 23 and 24: non-spot market procurement methods
Page 25 and 26: Lot-average pricing is the traditio
Page 27 and 28: Branded product lines include value
Page 29 and 30: The size of the typical hog product
Page 31 and 32: under production contracts availabl
Page 33 and 34: When packers purchase hogs through
Page 35 and 36: Contractors entering production con
Page 37 and 38: feeding programs may be required. P
Page 39 and 40: Operations or Activities Raising Co
Page 41 and 42: Pricing Methods-Cattle and hog buye
Page 43 and 44: packers that are required to report
Page 45 and 46: Market Access and Price Differences
Page 47 and 48: P&SP has found in the course of its
Page 49: Conclusions Substantial changes are

Assessment of the Cattle and Hog Industries Calendar Year 2000

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