“If you’re not outraged, you’re not paying attention.”

As you may already know, GIPSA has been keeping me up at night. One aspect I think deserves special attention is the particular affect the proposed GIPSA regulations could have on young producers.

Even though the proposed rule doesn’t directly ban the use of alternative marketing agreements (AMAs), the unintended consequences of the rule will restrict or eliminate them. This takes away cattlemen’s ability to manage risk, finance production and compete with one another to negotiate premiums. This is especially devastating for young people looking to enter the cattle industry as producers for the first time. Financing is particularly hard to obtain in that position, and may be impossible without the financial guarantees AMAs provide.

Additionally, if the definition of competitive injury is changed, the door would be opened to frivolous lawsuits from trial attorneys. Packers will manage this law-suit risk by simply offering a one-price-fits-all bid for cattle. This type of pricing does not recognize variation between animals can result in value differences of up to $300.00 per head. One way many young producers I know have been able to break into the cattle business is by focusing on producing high-quality cattle that garner premiums. Under the proposed rule, producers would no longer be compensated for added quality.

Looking at the future of our industry as a whole, I have concerns that we lose our incentive to progress and provide better cattle if everyone is paid the same.
So, what can you do? First, write a letter commenting on the proposed rule. A form letter is available here. Additionally, the Department of Justice is having a hearing on competition in the livestock industry on August 27. I’ll be there and think you should be to. We need people to show up by the masses to demonstrate that producers oppose the proposed regulations. If you’re looking for a little added incentive Ft. Collins is famous for its Rio Margaritas. I may even buy your first round if that’s what it takes to get you in town for the hearing.

For more information on the GIPSA proposal click here.