Concentration in agriculture : a report of the USDA Advisory Committee on Agricultural Concentration

54 Pages·1996·4.7 MB·English

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Jepartment of
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Agricultural
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Concentration in Agriculture
A Report of the USDA Advisory Committee
on Agricultural Concentration
June 1996
United States
Department of
Agriculture
vy
National Agricultural Library
LETTER OF TRANSMITTAL
The Honorable Dan Glickman eT, Rep Ft
Secretary of Agriculture
Mr. Secretary:
Concentration and vertical integration in agriculture generally are associated with positive results,
including more efficient production, risk management, international competitiveness, product quality
improvement, and food safety advantages. At the same time, however, concentration and vertical integration
in agriculture can cause problems and concerns, including distorted price discovery, unequal access to vital
market information, environmental degradation, and, perhaps most disturbing, dysfunctional interactions
between producers, handlers, packing plants, and retailers and distributors.
The process for dealing with these problems historically has involved occasional investigations and,
sometimes, government intervention to address a crisis situation. We believe it is possible to prevent most of
these problems. Major policy efforts should be directed to creating an atmosphere of open disclosure of
basic operating facts, including many aspects of price discovery, earnings levels of packers and feeders,
environmental management concerns, and contract terms between integrators and producers. In this
atmosphere of more and better information, markets will work better, fewer problems will occur, and any
problems that do occur will be more successfully and convincingly investigated and resolved.
It has been a pleasure to work with you on these important issues. The outstanding committee you
appointed has worked very hard. Attendance and participation have been extraordinary, as have the civility
and respect among members for individual viewpoints. The USDA staff have given first class support. We
have benefited from much detailed work, performed at many levels of the food industry and by USDA’s
supporting agencies.
We have seen our role more as developing a policy direction rather than redoing detailed economic
studies. We have tried to connect the many factors relating to the trends of agricultural industry restructuring
and to develop a comprehensive basis for policy. We are honored to have been asked to serve in this regard.
On behalf of the full committee, I want to express our appreciation for the opportunity to consider these
issues. We hope this report will be useful to you in carrying out your responsibilities.
Respectfully submitted,
ere a ae
Daniel I. Padberg
Professor Emeritus and
Chairman
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Respectfully signed and submitted by:
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Marty Strange, Vice Chair, Nebraska
Herman Schumacher, Vice Chair, South Dakota
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Michael Boehlje, Indiana
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Graham Boyd, North Carolina
Kenneth Bull, Kansas
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Dale Cochran, Iowa
Rebecca Edington, Georgia
Gary Evans, Missouri
Tim Hammonds, Washington, D.C.
John Hardin, Indiana
Karl Johnson, Minnesota
Edward Laur, Texas
Tyrone Moos, South Dakota
C. Eddie Nichols, Nebraska
Brent Porteus, Ohio
Steve Raftopoulos, Colorado
Don Smith, Kansas
Paul Strandberg, Minnesota
Lois Wales, Texas
Phil Weaver, Texas

Contents Page
Members of the Advisory Committee
USDA Advisory Committee Staff
Duties and Responsibilities of the Committee
I. Executive Summary
Il. Background
III. Findings of the Committee: Livestock, Poultry, and Meat Sectors
IV. Recommendations: Livestock and Poultry Sectors 15
V. Findings and Recommendations on Rail Transport 3)
VI. Minority Views 29
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