Posted February 16, 2016

Per, Nebraska meatpackers can now own hogs.

Under LB176, passed February 5, a person who owns, leases or holds a legal interest in a swine production operation can enter into a contract to produce swine for a packer. The producer, or contract grower, will own the land and facilities used to raise the livestock while the packer owns the swine.

State Senator Ken Schilz said Nebraska was the only state that prohibited packers from directly or indirectly owning hogs. Because packers in other states are not subject to that restriction, packers who process Nebraska hogs could move to neighboring states.

In an editorial in the Schuyler Sun, Senator Jerry Johnson observed, “Supporters of LB176 argued that passage of this measure would give the Nebraska farmer another tool to compete in today’s economy. It was said that young farmers would be helped by this bill as providing a source of income in an otherwise volatile industry with less risk. It was also said Nebraska farmers contract now with big corporations like Smithfield or Tyson, but ship their animals out of state for processing. Under this bill, processing will take place in the state. Jobs will be created and economic advantages will result.”

Opponents of the bill argued it would negatively impact family farms. Senator Al Davis of Hyannis told Fortune magazine that contract farming has become more prevalent in livestock states where packer bans have been overturned and that the contract model can be dangerous for farmers. Davis contends that many farmers who sign such contracts take on huge loans to pay for the infrastructure required to meet packers’ demands for large herds, leaving them unable to negotiate higher prices.

A copy of the approved bill may be viewed here.