IMPORTANCE
The U.S. pork industry has thrived because of the diversity of production operations and marketing options. Restricting or limiting buying and selling arrangements between producers and packers could adversely affect the more than 36 consecutive months of profits the industry has enjoyed.
BACKGROUND
Various legislative proposals have been put forward that attempt to require a mandatory percentage of hogs slaughtered each day in each plant be purchased through spot transactions. However, neither economic theory nor empirical research show that a market will work more efficiently if a certain legislated percentage of the product is sold in spot or negotiated trades, and will work less efficiently if a smaller percentage is sold in those trades. There is no “magic number” at which spot markets are better or worse in arriving at the true value of a product.
NPPC POSITION
NPPC supports the right of all producers of any size or type of production system to market access. The U.S. pork industry opposes legislation that would dictate the type of marketing arrangements pork producers may enter with packers.
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