By Rita Jane Gabbett on 11/14/2012
Eight U.S. Senators are asking Agriculture Secretary Tom Vilsack to look into a steep decline in lamb prices out of concern that meat processors might be violating the Packers and Stockyards Act.
In a letter dated Oct. 17, Sen. John Barrasso (R-Wyo.) and seven others pointed to a year over year live lamb price drop they said could not be explained by normal price fluctuations. Auction market reports show lambs sales at $86 per hundredweight on Sept. 22, compared to sales at $201 per hundredweight on Sept. 20, 2012 at the same sales barn. At the same time, they noted the cutout to live price spread for slaughter lambs which was more than $90 per hundredweight in July 2012, compared to less than $20 per hundredweight in July 2011.
“We respectfully request that the Grain, Inspection and Packers and Stockyards Administration (GIPSA) fully investigate this drastic change in price spread to ensure that no packers or meat processors are violating the Packers and Stockyards Act by manipulating on-the-shelf lamb and other sheep product supplies and prices in such a manner that would drive down live prices for sheep producers,” the letter asked.
“We are especially concerned about and request investigation of practices whereby packers last year, out of concern that they may not have enough lambs to keep their plants producing at levels to ensure profitability, purchased lambs and placed them in feedlots. This action appears to be in violation of Packers and Stockyards Act that prohibits price manipulation.
“Further, it appears that packer ownership of an excessive number of feeder lambs resulted in a market manipulation because privately owned feeder lambs were unable to be marketed and delivered to packing plants because the packers were killing only the lambs they owned and had contracted to be fed out,” the letter charged.
The letter was also signed by Senators John Thune (R-S.D.), Max Baucus (D-Mont.), John Hoeven (R-N.D.), Tim Johnson (D-S.D.), Mike Enzi (R-Wyo.), Jon Tester (D-Mont.) and Kent Conrad (D-N.D.).