Two major South Dakota cattle groups differ on at least a couple of provisions dealing with livestock in the farm bill approved Thursday by the Senate Agriculture Committee.

The bill includes mandatory country of origin labeling for meat and a ban on meatpacking companies owning cattle for more than 14 days before slaughter.

The South Dakota Stockgrowers Association has long favored both measures. The South Dakota Cattlemen's Association has reservations about both.

The ban on packer ownership of livestock will help protect small ranchers and feeders from being caught in price squeezes orchestrated by the meatpackers, according to Margaret Nachtigall, Stockgrowers executive director.

Currently, when there is a shortage of cattle in the country that drives up prices, the meatpacking companies can slaughter their own cattle instead and push prices down, Nachtigall said.

"They basically can close out the market whenever they want," she said. "This will sure help the producers at least have a better chance at the market."

The South Dakota Cattlemen's Association is cool toward the packer ban because of concerns that it could limit producers' flexibility in marketing their cattle, SDCA executive director Jodie Hickman said Friday.

Among the techniques ranchers use are "forward contracts" in which ranchers agree to provide cattle to meatpackers at a later date for a set price.

Sen. John Thune, R-S.D., a member of the Senate Ag Committee, said the bill would not prohibit forward contracts. He favors the packer ban but also wants to preserve the ability of producers to form forward contracts. Sen. Tim Johnson, D-S.D., also has long supported a ban on packer ownership of livestock.

Hickman said some producers also form alliances to market their cattle, including producer-owned U.S. Premium Beef, which owns a packing plant.

"We don't want to see some of the producer-initiated marketing programs become illegal," she said.

Thune's office told the SDCA that the marketing alliances would not be affected by the packer ban, she said.

But Hickman said SDCA is still concerned about how the language could be interpreted by the U.S. Department of Agriculture. SDCA is worried that the ban could effectively outlaw value-added livestock marketing programs because most are coordinated through the packing stage.

The farm bill passed by the House last summer doesn't include a packer ban.

"Overall, we don't like the Senate bill near as much as we did the House farm bill," Hickman said.

On mandatory country of origin labeling, the Stockgrowers Association says it will benefit consumers and livestock producers, who would be able to differentiate their products from those of foreign beef producers. It is especially important because of the problems that Canada has had with mad cow disease, according to the Stockgrowers Association.

The SDCA doesn't find the current labeling language as objectionable as the COOL provision enacted in the 2002 farm bill because this year's version would put much less of a record-keeping burden on producers, Hickman said.

But she said the Senate and House labeling provisions this year still do not meet the SDCA's labeling policy because they don't contain an individual animal identification program and they exempt some meat from the labeling requirement. All poultry is exempted, as is any meat sold through food service outlets such as restaurants, Hickman said.

The farm bill is the best way to get needed market reforms, according to Shane Kolb of Meadow, the Stockgrowers Marketing Committee chairman who lobbied in Washington last week on the farm bill. "Although we may not be getting all we want, this is very promising, and I feel positive that we will be seeing good results," Kolb said in a news release.

Hickman said SDCA officials are still studying details of the 700-page Senate farm bill.

The Stockgrowers and the SDCA have differed for the past few years on some livestock issues.

The SDCA has members statewide, but it has more East River members with more diversified farm and ranch operations.

The Stockgrowers Association also has members statewide, but it has more West River members and is focused more on representing independent cow-calf ranchers and cattle feeders.

Another provision in the Senate bill backed by the Stockgrowers Association would set up an office of special counsel to enforce federal laws against anti-competitive practices in the livestock industry.

The SDCA doesn't have an official position on the special counsel, but Hickman said many people believe the USDA already has the ability to do what the special counsel would do.

The SDCA said overall conservation funding in the Senate farm bill increased. However, that increase went mostly to the Conservation Stewardship Program (formerly known as the Conservation Security Program) and the Wetland Reserve Program.

Funding for the Environmental Quality Incentives Program was held to baseline funding with no increase, and the Grasslands Reserve Program was funded at $240 million over the life of the farm bill.

Many western South Dakota ranchers have used EQIP money to help build pipelines and tanks to get water to their livestock during the drought.

Contact Steve Miller at 394-8417 or steve.miller@rapidcityjournal.com