Few remember Bert Bandstra. As a fellow Iowan and supporter of bans on packer ownership of cattle, though, Sen. Charles Grassley (R-Iowa) will recall the name.
Bandstra, who died in 1995, was a one-term Democratic Iowa congressman who introduced a bill in 1966 (HR-12115) that, had it passed, would have prohibited packer feeding of livestock. And he had the backing of the USDA to try to get it done.
Grassley last year included an amendment into the farm bill that would make it unlawful for a packer to own or feed livestock intended for slaughter. On the surface, it’s a great idea for cattlemen. And so it seemed more than 40 years ago.
Bandstra and others were concerned that the cattle industry would go the way of the poultry industry, which at the time was about 95 percent vertically integrated. “Experience has shown that vertical integration in any particular industry must be stopped in its early stages or it will not be stopped at all,” he said in a statement inserted in the Congressional Record, Oct. 7, 1966. “Fortunately, insofar as the livestock industry is concerned, it is not too late.”
No one knew more about vertical integration in the cattle industry at the time than Ken Monfort. Monfort, of Greeley, Colo., had with his father, Warren, attempted in the 1950s to coax a packer to put a plant near their huge feedlot. They were unhappy with the selection of packing plants in Denver, and had for years believed shipping live cattle to the terminal markets “back East” was a waste of energy and not economical for Colorado cattle feeders.
So in 1960, they did what they thought they had to do: They partnered with a Denver firm to build a plant near their feedlot in Greeley. After their partners got cold feet and baled following an economically challenging first six months, the Monforts were full-fledged packers.
The legislation made Ken and Warren Monfort — who considered themselves feeder-packers, not packer-feeders — plenty nervous. “It is rather obvious what HR-12115 would do to us,” Ken Monfort told the House Agriculture Subcomittee in testimony on Oct. 6, 1966. “It would force us to either sell our packing plant to someone else or to shut the plant down.”
He was equally concerned about the effect the bill would have on the rest of the industry. What would have happened had it been in place prior to 1960? At the very least, it would have delayed the long-needed changes that were made possible through expansion.
As a result of the Monfort plant, “other packers have been forced to modernize and improve both their facilities and their buying techniques,” Monfort told the subcommittee. “New packing plants have now opened in Fort Morgan and Sterling (Colo.), financed and operated by cattle feeders. Very simply, the trend in Colorado is not packer-feeding but, conversely, feeder-packing.” At the time about 65 percent of the production at the Monfort packing plant was supplied by the company’s own feedlots — meaning there was also a new, significant outlet for about 85,000 cattle yearly from other feeders in the area.
It wasn’t that Ken Monfort was unsympathetic to the legislation. He recognized that in Iowa cattle weren’t raised the same way they were in Colorado. And, in fact, he liked the idea of limiting his competition, either as a feeder or a packer.
But a feeder or group of feeders should have the “freedom to improve their economic position by further processing of their production,” he testified. “If I believe this, it then follows that I must believe that the packer should have the right to assure himself a supply of livestock of a proper quality by feeding some of them himself, if necessary, as it is in many areas of our country.”
It was Monfort’s belief that such a law would actually have been supported by the packers of the day because it would have disallowed feeders into the packing business.
He also pointed out that then-USDA suggestions that packer ownership had a harmful effect on cattle prices had no basis in the real world. “I am sure that a larger percentage of the cattle slaughtered in Colorado are packer owned than in any other large feeding state in the nation,” Monfort testified. “I am even more sure that our live cattle market is higher, considering freight differentials, than any other live cattle market in the country.”
Packers — especially packers who own cattle — certainly don’t want low prices, he said. “Can any of you possibly believe that in our operation, where we have 10 times as much money invested in inventory of cattle in our feedlots as we have invested in our packing business, we are interested in low prices?” he asked. “We are interested in a higher market. A healthy market.”
After the October 1966 hearings on the bill, Bert Bandstra was quoted as saying: “I am now more convinced than ever that passage of this legislation is needed, and needed soon, to protect our family farm system and to avert destruction of an open, competitive livestock market.”
According to Grassley late last year, “packer ownership of livestock frustrates and compromises the marketplace so the farmer doesn’t get a fair price.”
Even though his legislation failed to pass and subsequent industry events proved his warnings premature at best, Bandstra may have been right in 1966. Maybe Grassley is right now, and he and his cohorts have fixed problems in Bandstra’s earlier efforts.
Ken Monfort believed any legislation that would interfere with a marketing avenue allowing feeders to slaughter their own animals was bad legislation. More than that, though, he believed it was a bad idea to allow government to tell you how to run your business.
Walt Barnhart is a freelance writer and communications consultant based in Littleton, Colo. He is currently writing a biography of Ken Monfort. He can be reached at firstname.lastname@example.org.