DRA Press Release

RANCHERS SEND MESSAGE TO SENATOR THUNE - WE NEED MARKET REFORM
SD PRODUCERS SUBMIT 135 LETTERS

Rapid City, SD – Members of Dakota Rural Action delivered 135 letters to Senator John Thune’s office on Monday, July 9th. Ranchers from across the state sent the letters urging the Senator to support critical market reforms, including Senate Bill 1017, known as the Captive Supply Reform Act, in the 2007 Farm Bill. As a member of the Senate Ag and Natural Resources Committee, Senator Thune will cast his vote on these market reforms including S. 1017, the Captive Supply Reform Act. So far, the Senator has not taken a position on this bill.

“Without market reform like the Captive Supply Reform Act, the future of family farms like ours is in jeopardy,” said Mike Maher, a rancher from Isabel, SD, “Family farmers and ranchers depend on this because of the power that the packing companies have to manipulate prices in their favor.”

“Hopefully, Senator Thune has now heard from enough producers and ranchers in this state to feel comfortable taking a position on this legislation,” said Karen Engelhart, a rancher from Bison and a member of Dakota Rural Action. “These 135, personal letters represent a significant number of concerned South Dakota cattle producers and should be enough to convince him that this is important to South Dakota.”

The Captive Supply Reform Act, if passed, will become part of the 2007 Farm Bill, a package of legislation which is renegotiated every five years by congress to address the farm and food programs for the country and funding is always a large part of the debate. However, proposed livestock market reforms like the Captive Supply Reform Act do not require additional funding, and can be passed regardless of budgetary shortfalls.

“This is a no-cost reform that will stop the price manipulation that we are currently seeing in the livestock industry, and create a level playing field for everyone in the cattle industry,” Maher explained. “I can not understand why our Senator is not supporting this reform that is so important to us in the rural communities.”

The Captive Supply Reform Act is an amendment to the current Packers and Stockyard Act and seeks to eliminate the ability of packers to manipulate cattle prices by creating requirements for base pricing on forward contracts for fat cattle and requires those prices to be traded on an open market.

By calling on captive supplies, which packers control through forward contracts to fill their slaughter needs, packers do not have to bid for cattle in an open, public manner. This creates a false appearance of low demand, and drives down cattle prices to benefit the packing companies, but low prices are devastating to the future of South Dakota’s independent cattle producers.

“Despite the fact that ranchers and cattle producers have been asking Senator Thune for his support on this bill for as long as he has served us in Washington, and he has been given more than enough information about why the Captive Supply Reform Act is so critical to the ranching families of our state, he still hasn’t taken a position,” said Englehart.

The reform in Senate Bill 1017 does not prohibit forward contracts and because it is an amendment to the Packers and Stockyards Act, it only impacts fat cattle contracts, not feeder cattle or cattle in other stages of production.

“Our message to Senator Thune is simple but clear – we, the ranchers of this state need our Senator to vote for the Captive Supply Reform Act. His public support of this bill is critical as the Senate votes on the 2007 Farm Bill,” said Englehart. “At the very least, we deserve a straightforward answer about how he intends to vote when the bill is brought before the committee.”

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Photo Attachment:

Dakota Rural Action member, Karen Englehart of Bison, discusses the Captive Supply Reform Act with Wesley G. Roth of Senator John Thune’s Rapid City staff. Other DRA members not pictured but present on Monday were Corinne Erickson, Bison and Holly Waddell, Shadehill.