The Missouri Livestock Price Discrimination Law enacted in 1999 requires meatpackers to pay the same price for animals of the same quality, regardless of who the sellers are. "This law was a reasonable attempt to eliminate pricing discrimination that has hurt … family farmers," said Attorney General Jay Nixon.
Despite the fact that the Court "has little doubt that discrimination exists between the price that packers are willing to pay to a large producer and the price paid to a small producer", the Federal District Court ruled in March 2000 that the law violated the Commerce Clause of the U.S. Constitution. The law had been challenged by a group of feedlot operators, the American Meat Institute and the Missouri Cattlemens Association. The groups had obtained a temporary restraining order in August to prevent the state from enforcing the law. Nixon appealed the ruling. In May 2001, the 8th Circuit Court of Appeals overturned the Federal District Court’s decision. Missouri’s Livestock Price Discrimination Law was reinstated.
More Information:
- Decision of United States Court of Appeals in Hampton Feedlot, et. al. v. Jeremiah W. Nixon, Attorney General of the State of Missouri – issued May 14, 2001
- Missouri Revised Statutes Chapter 277 – Missouri Livestock Marketing Law
- Missouri Department of Agriculture
1999 Missouri Senate Bill 310 (Relevant sections.)
This bill was enacted by the 90th General Assembly and codified as §277.200,.209, .212, .203
Section 2. A packer purchasing or soliciting livestock in this state for slaughter shall not discriminate in prices paid or offered to be paid to sellers of that livestock. The provisions of this section shall not be construed to mean that a price or payment method must remain fixed throughout any marketing period. The provisions of this section shall not apply to the sale and purchase of livestock if the following requirements are met:
(1) The price differential is based on the quality of the livestock, if the packer purchases or solicits the livestock based upon a payment method specifying prices paid for criteria relating to carcass merit; actual and quantifiable costs related to transporting and acquiring the livestock by the packer; or an agreement for the delivery of livestock at a specified date or time; and
(2) After making a differential payment to a seller, the packer publishes information relating to the differential pricing, including the payment method for carcass merit, transportation and acquisition pricing, and an offer to enter into an agreement for the delivery of livestock at a specified date or time according to the same terms and conditions offered to other sellers.
Section 3. A packer shall provide to the agricultural market service livestock market news branch of the United States Department of Agriculture and to the Missouri department of agriculture all prices paid for livestock, both contract and direct purchase, by 9:00 a.m. the following business day.
Section 4.
1. Any agreement made by a packer in violation of sections 1 to 6 of this act is voidable.
2. Any packer acting in violation of sections 1 to 6 of this act is guilty of a class A misdemeanor.
Section 5.
1. The attorney general shall enforce the provisions of sections 1 to 6 of this act. The department of agriculture shall refer violations of the provisions of sections 1 to 6 of this act to the attorney general. The attorney general or any person injured by a violation of the provisions of sections 1 to 6 of this act may bring an action pursuant to the provisions of chapter 407, RSMo, for any remedy allowed for unlawful merchandising practices.
2. A seller who receives a discriminatory price or who is offered only a discriminatory price in violation of the provisions of sections 1 to 6 of this act may receive treble damages, costs and a reasonable attorney’s fee.
Section 6.
1. Each packer shall make available for publication and to the department of agriculture a daily report setting forth information regarding prices paid for livestock under each contract in force in Missouri in which the packer and a Missouri resident are parties for the purchase of livestock by the packer and which sets a date for delivery more than fourteen days after the making of the contract.
2. The report shall be completed on forms prepared by the department for comparison with cash market prices for livestock and livestock carcasses according to procedures required by the department. The report shall not include information regarding the identity of a seller.
3. Any packer who fails to report as required by this section is guilty of a class A misdemeanor.
4. The department shall adopt rules to implement the provisions of sections 1 to 6 of this act.
5. No rule or portion of a rule promulgated pursuant to the authority of this section shall become effective unless it has been promulgated pursuant to the provisions of chapter 536, RSMo.
6. In the event a federal law regarding livestock price reporting becomes effective, the department of agriculture shall immediately adopt such rules as are necessary to permit Missouri producers and packers to remain economically competitive with producers and packers in other states.