The report is based on interviews with hog farmers from Minnesota, Iowa and South Dakota, as well as an extensive review of the economic literature. LSP was assisted in the interviews by Dakota Rural Action and Iowa Citizens for Community Improvement. The report also includes a legal analysis of the Packers and Stockyards Act. Fewer than 30 percent of U.S. hogs are marketed on the open cash market. With fewer buyers and more captive supply, there is less competition for independent farmers' hogs and insufficient market information regarding price.
Lower prices result.
Packer control of the market is pervasive. Farmers reported facing daily what they call a mind game, which they describe as pressure from agricultural leaders to conform to the new factory farm system of hog production. Despite some recent indications of growing interest in addressing the impact of packer concentration and vertical coordination in the livestock markets, the USDA has taken no significant action to reform its trade practices regulations. For almost three-quarters of a century, the USDA's Grain Inspection and Packers and Stockyards Administration, as well as the U.S. Department of Justice, have had the authority to prevent industries like pork from becoming controlled by a handful of packers, she said. We don't need new laws on the books.