"I don't intend to allow the corn and soybean markets to be consumed by the multi-nationals the same way vertical integration has happened with the large meat packers. We aren't going to play catch-up through regulation on Iowa's crops like we have to with cattle and pork production," Grassley said. "Agriculture can't afford to have the same thing happen to our corn and soybean producers.
Grassley requested the study to identify possible market influences and to get a better understanding of what row crop producers are experiencing.
The Department of Agriculture's NASS found that during the 2001 crop year, 10.4 percent of domestic corn production, 8.6 percent of soybeans, and 4.8 percent of wheat was sold through marketing contracts. Cooperatives and elevators were the largest contractor group representing 71 percent of contracts for corn, soybeans and wheat. Processors, seed companies and feed mills provided for 20 percent of corn contracts, 30 percent of soybeans contracts, and 18 percent of wheat contracts.
Grassley has long been fighting to stop concentration in agriculture, particularly with livestock. During his work on livestock concentration, Grassley heard from many family farmers interested in protection for corn and soybean production.
Grassley has introduced legislation to ban packer ownership of livestock 7 business days before slaughter. Similar legislation was passed twice in the Senate during debate of the 2002 Farm Bill, but the amendment was dropped in conference negotiations.
Grassley has also introduced a bill that requires 25 percent of a packer's daily kill come from the spot market. By requiring a 25 percent spot market purchase, the Mandatory Livestock Reporting system would be able to provide consistent, reliable numbers about what is being purchased from the spot market and, thereby, improve the accuracy and transparency of daily prices. In addition, independent producers would be assured a competitive position due to the packers need to fill the daily 25 percent spot market requirement.