AMI Study Says GIPSA Regulations Will Cost Jobs
R-CALF is skeptical about the study results.
Compiled by staff
Published: Oct 25, 2010
A study commissioned by the American Meat Institute indicates that an estimated 104,000 Americans could lose their jobs if USDA's Grain Inspection, Packers and Stockyards Administration's new regulatory proposal is finalized. The regulations attempt to change dramatically the way livestock are procured and marketed in the United States. The study highlights the vast potential damage that could be done to livestock producers, meat packers and American consumers and workers.
The study found that the disruption and resulting inefficiencies in the market should the rule be implemented would increase retail meat prices by 3.33% at a national level, causing a 1.68% decrease in consumer demand for potentially lower quality meat and poultry products. Therefore, not only will there be fewer opportunities for meat packers, wholesalers and retailers, but livestock and poultry producers and their suppliers will also see a reduction in demand and economic opportunities.
American Meat Institute President and CEO J. Patrick Boyle, says at a time of record unemployment, slow economic recovery and rising poverty levels, it is unfathomable that the administration would propose a rule that could cost one American job. As the analysis shows, these are not just jobs in meat packing or livestock production, but in nearly every sector of the American economy.
However, R-CALF USA is critical of the study, saying it is not an economic study at all, but rather a direct political threat by the monopolistic meatpackers to exact financial harm on producers and consumers as a retaliatory measure if GIPSA proceeds to prohibit them from exerting abusive market power to lower cattle prices to producers and increase beef prices to consumers.
"The entire study is based on the outrageous threat that packers likely will collude to destroy certain marketing arrangements that benefit everyone in the marketing chain – from consumers to retailers to packers to cattle producers – by providing high quality beef for consumers," said R-CALF USA President/Region VI Director Max Thornsberry. "This threat would be laughable if it weren't coming from one of the most economically and politically powerful trade associations known in Washington, D.C."
Thornsberry says they think the U.S. Department of Justice should step up its antitrust investigation of the packing industry given AMI's admission that the concentrated meatpackers likely possess, and likely intend to exercise, their abusive market power to coordinate actions to increase food prices for consumers.
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Tagged: usda, livestock producers, poultry producers
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