Released Dec. 7, 2007
AMES, Iowa--Throughout history, the livestock industry has been the topic of various types of proposed legislation. Five years ago, during debate about the 2002 Farm Bill, Congress discussed several bills that were aimed at restricting packers’ purchasing practices — including a bill that would have restricted packer ownership and control of livestock.
However, instead of enacting that legislation, Congress decided more research was needed and appropriated funding for a study on the marketing arrangements used in the livestock industry.
The study, called the Livestock and Meat Marketing Study, was completed in early 2007. The key findings regarding the economic aspects of alternative marketing arrangements (AMAs) for livestock and meat are now available online in a series of four reader-friendly fact sheets. They can be accessed through the Livestock Marketing Information Center at http://lmic.info/memberspublic/LMMA/LMMAframe.html .
John Lawrence, an Iowa State University Extension economist and one of the study’s authors, said the U.S. Senate’s current version of the 2007 Farm Bill again addresses competition in livestock markets.
“Hopefully, Congress will consider the results of this study in the debate,” said Lawrence, director of the Iowa Beef Center at Iowa State University.
The study documents the use and impacts of alternative marketing arrangements (AMAs) in cattle, hog and sheep markets based on surveys and transaction data from October 2002 to March 2005.
Many meat packers and livestock producers obtain benefits through the use of AMAs, including management of costs, management of risk (market access and price risk), assurance of quality and consistence of quality, Lawrence said.
“In aggregate, restrictions on the use of AMAs for the sale of livestock to meat packers would have negative economic effects on livestock producers, meat packers and consumers,” Lawrence said of the study’s findings.
The Iowa Beef Center at ISU was established in 1996. Its goal is to support the growth and vitality of the beef cattle industry in the state. As part of Iowa State University Extension, the Beef Center also serves as a central access point for all ISU programs and research related to the beef industry.
For more information about the Iowa Beef Center, visit http://www.iowabeefcenter.org.
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http://www.extension.iastate.edu/news/2007/dec/070602.htm
Contacts: John Lawrence, (515) 294-6290 or jdlaw@iastate.edu
James Robb, robb@lmic.info
Nancy Foster, (515) 294-9124 or nfoster@iastate.edu
