Idaho rancher and cattle feeder Eric Davis, President-elect of the National Cattlemen's Beef Association (NCBA), told the Senate Agriculture, Nutrition and Forestry Committee today there should be thoughtful deliberation of the impact of any legislation on packer ownership of livestock before such legislation becomes law. Davis was appearing on behalf of nearly 250,000 NCBA and state affiliate members across the country.

The hearing addressed a potential ban on packer ownership of livestock and changes to the Packers and Stockyards enforcement authority. It was brought about in large part by depressed market prices.

Industry analysts estimate that more than $2.5 billion of equity has been drained from the industry since 1999. Record supplies of beef and competing proteins, reduced business travel following Sept. 11, limited confidence in futures markets, and reduced exports to key countries like Japan have all combined to pressure markets lower.

"Now is a difficult time to be in the cattle business," said Davis. "During times like these, we all want to know the cause. We all want to know the solution." In response to the frustration many producers feel, some legislators are asking for laws that would significantly change the regulations affecting the way producers market livestock.

NCBA has strongly supported a thoughtful deliberation and prudent consideration of the impact of any legislation, including possible unintended consequences, prior to legislation becoming the law of the land. NCBA's analysis of the ban on packer ownership shows that such an action would be financially devastating to the industry, costing as much as $10 billion to producers and the industry.

"We recognize that there are competing visions in the beef industry," Davis said. "The other vision sees beef producers as simply selling cattle to the next link in the chain. To be clear, the value for cattle is established by what the customer is willing to pay for the beef in that animal. This other vision would rely upon increased regulation, and hence increased cost, on an industry already beset by costly regulations without any monetary benefit to producers." ©