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Fairness in cattle markets will be a top priority, says Hipp

Four senators raised the cattle marketing issue during the mostly friendly, hourlong hearing by the Senate Agriculture Committee.

Agricultural law expert Janie Hipp promised on Thursday to be “a big voice at the interdepartmental table” in dealing with cattle prices and biofuels if she is confirmed by the Senate to lead the USDA’s legal shop. “I commit to you that I will get on this [cattle price transparency] as one of my very, very top priorities,” said Hipp at a confirmation hearing, adding, “My phone is blowing up as well” with complaints from producers.

Ranch and farm groups have complained repeatedly during the pandemic that high beef prices at the grocery store have not translated into higher prices for fed cattle. Last week, six farm groups called on the Justice Department to investigate the highly consolidated meatpacking industry, where four companies slaughter more than 80% of all beef cattle and only a fraction of cattle are sold on the spot market.

Four senators raised the cattle marketing issue during the mostly friendly, hourlong hearing by the Senate Agriculture Committee. The senior Republican on the committee, John Boozman of Arkansas, said, “This is an important issue that warrants review by the committee.” Efforts are underway to set up a Senate Judiciary Committee hearing on the issue as well.

“We will be a strong voice, and we will sit down with DOJ regularly,” Hipp replied when Sen. Deb Fischer of Nebraska asked how the USDA and Justice Department would work together in overseeing meatpackers. Hipp also said she would communicate regularly with the Senate on cattle marketing issues and would rigorously enforce the 1921 Packers and Stockyards Act to assure producers are paid promptly for livestock and to prevent anti-competitive practices.

“I promise to you to be a big voice at the interdepartmental table,” said Hipp, who began practicing law during the agricultural recession of the mid-1980s. “Sometimes the voices of farmers and ranchers in agriculture get drowned out by other voices, but they have not heard my voice yet.” She was responding to a query from Sen. Amy Klobuchar of Minnesota about the Renewable Fuel Standard, where the EPA is supposed to consult with the USDA over ethanol targets, but the statement exemplified the approach she would take if confirmed as USDA general counsel.

Last July, a USDA report said the likely causes of the disparity between retail beef prices and slaughter cattle prices were an August 2019 fire that shut down a Kansas plant that processed 6% of U.S. fed cattle and COVID-19 outbreaks in spring 2020 that slowed or stopped production at large meatpacking plants. Allegations of anti-competitive practices remained under investigation, the report said. It listed several ways to improve price transparency in the cattle market. Some lawmakers say packers should be required to buy a larger portion of cattle on the cash market to assure a fair price for independent producers; most cattle are raised under contract or sold through price formulas.

“Cattle prices are where they are because they follow supply and demand,” said the North American Meat Institute, speaking for meatpackers. The industry says the July 2020 USDA report exonerated it of any wrongdoing. “The disruption in the beef markets was due to devastating and unprecedented events.”

The USDA has “very powerful authorities” to aid agriculture through the Commodity Credit Corp., which can spend up to $30 billion at a time before asking Congress for a replenishment, said Hipp. She declined to say, pending research, if the CCC could be used to support a “carbon bank,” often mentioned as a way to help farmers, ranchers, and foresters adopt climate-smart practices to reduce greenhouse gas emissions and lock carbon in the soil and trees.

“Any time we move into an arena where we’re considering new issues that could be addressed through the CCC, we need to work very closely with you all on these issues,” she said.

Boozman and Sen. John Hoeven of North Dakota, a senior member of the Senate Appropriations Committee, say the USDA lacks the authority to create a carbon bank under the CCC.

Hipp, a member of the Chickasaw Nation, grew up in a small town in southeastern Oklahoma and was involved in agriculture from an early age. “I did the payroll every Saturday and the books every month” for the small tractor dealership run by her grandfather before building a career in agricultural law. “I will never forget where I grew up,” she said in her opening statement. “I will always keep our nation’s farmers and ranchers, no matter who they are, as my guiding light and my North Star.”

“You have my full support,” said Senate Agriculture chair Debbie Stabenow at the end of the hearing. A committee vote on the nomination is expected in June.

To watch a video of the hearing or to read Hipp’s written testimony, click here.

Produced with FERN, non-profit reporting on food, agriculture, and environmental health.
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