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As early as this week, the U.S. Senate may restart debate on a new bill for America's farmers. The Senate version of the farm bill is hundreds of pages long, but buried inside are a few dozen lines that could mean big changes for slaughterhouses. The nation's largest meat packers have lobbied hard to defeat the provision, saying it would take away their ability to control livestock for the sake of quality and efficiency. Proponents say the big packers have too much control already.

	While a federal meat inspector (right) looks on, a worker splits a carcass with a chainsaw. View a slideshow of images from the meat packing process. Note: Slideshow contains some graphic images. (MPR Photo/Jeff Horwich)

Slaughtering happens two or three days a week at Miltona Meats, an independently-owned meat packer in the west-central Minnesota town of Miltona. Owner Greg Johnson and his 12 employees do a lot of specialized work, including much of the processing for a regional organic farming group. On one recent day they had two buffalo, 10 cows, six hogs and even one llama.

Animals move through the process one at a time, and it may take 30 minutes for a cow to move from the rifle shot to the freezer. It's a different world from much larger corporate plants that may process more than 4,000 cows a day.

Johnson believes the scaled-down operation has certain benefits. "We can check every animal at a time versus running one every second, and that's what makes a difference," Johnson said. "We can sit here and when we're done, we can trim everything off that we have to if there is any junk on there. Our inspectors can look every animal over very closely."

Johnson's business is strong, but for at least the past 10 years such small, independent plants like this have accounted for only a tiny portion of the meat produced in the U.S.

In 1999, the 10 largest beef-packing firms accounted for more than 90 percent of all steer and heifer slaughter in the U.S. The top four processors of hogs process more than half of the country's pork.

	Miltona Meats owner Greg Johnson in one of the plant's meat lockers. Johnson has owned the plant for 12 years, and it has been in business at least half a century. (MPR Photo/Jeff Horwich)

Most livestock farmers sell animals to the major meat packers like IBP, ConAgra, Smithfield, or Minnetonka-based Cargill. A small - but growing - number of farmers simply raise hogs or cows already owned by the packing companies. And in some cases packers are raising and feeding livestock themselves.

Sen. Paul Wellstone, D-Minn., backed by groups like the Minnesota Farm Bureau and National Farmers Union, says this concentration is a recipe for monopoly.

"We know what these packers do," Wellstone said. "They buy when prices are low, and then if the prices should go up they sell to keep prices low. It's like a cartel. They're basically jacking the independent producers around and they're basically using their power to pretty much dictate prices. And that's unacceptable."

"It's like you have an auction to go to and you only have two or three people to sell to. You don't get a very decent price." - Sen. Paul Wellstone, D-Minn.

Wellstone's tool is the "packer ownership ban," an amendment sponsored by Sen. Tim Johnson, D-S.D., that slipped by a narrow margin of 51-47 into the Senate farm bill. Wellstone was a cosponsor. The law says packers of beef and hogs may not "own, feed, or control livestock" more than two weeks before their slaughter.

"The problem for our independent (farmers) is that it's like you have an auction to go to and you only have two or three people to sell to. You don't get a very decent price," Wellstone said. "Well, that's what's happening now as these packers are controlling more and more of the market. Our independent producers are put at a severe disadvantage."

Mark Klein of Excel Meats, the meat packing subsidiary of Cargill, says the implications for big meat packing firms -and for many farmers - could be "disastrous." Klein says Excel has been striving for decades to become more involved in all stages of meat production for the sake of efficiency and quality.

	Pigs at a 1,000-hog operation in Grant County. (MPR Photo/Tim Post)

"Livestock producers, meat processors, retailers, and food service operators have made a lot of progress over the last decade in making beef and pork more acceptable to consumers," Klein says, "and a lot of that effort is going to go out the window because of this amendment."

Firms, including ConAgra and Cargill, would almost certainly have to sell off the feedlot businesses they have built up in recent years. Smithfield Foods, the largest pork processor in the world, ran a full-page newspaper ad in Sioux Falls this week, saying it will close its Morrell processing plant if the packer ownership ban is approved. Morrell, one of the top employers in Sioux Falls, relies heavily on hogs already owned by Smithfield.

The big packers say the vaguely-worded amendment will be a slippery slope to even bigger changes. The result they fear most of all is losing the ability to sign binding contracts that move beef swiftly along preset routes from farm to feedlot to slaughterhouse.

	Miltona Meats worker Ralph Schlosser packages sliced ham. The entire packing process, from slaughter to packaging and sales, happens at the facility. (MPR Photo/Jeff Horwich)

The dispute over the effects on beef and pork contracts stems from the interpretation of the word "control" in the amendment. Wellstone says the amendment is intended to refer only to actual packer ownership of livestock, including feedlot operations, and that contracts would not be affected. Nonetheless, the meat packing industry is convinced that contracts are also being targeted.

Klein says both ownership and contract arrangements increase efficiency, and so bring down the price for consumers. He says control of livestock also allows for "branding," and major modern trend in the industry. Branding means putting a label like "Angus Pride" on a particular, quality-controlled route from farm to table. Klein says such quality assurance is part of the reason consumers are finally returning to beef and pork after decades abandoning them for chicken and turkey.

"What is the value of a brand?" Klein said. "How much less beef will consumers eat because all of a sudden you've got an inconsistent product again?"

Farmers who make binding arrangements with packing plants or raise packer-owned animals undoubtedly gain simplicity and security. This is valuable in a business where prices can be highly unstable.

But critics say it can translate into inflexibility and become a devil's bargain when times are bad. In 1998, for instance, the market price for hogs in the big packing companies hit rock bottom at around 10 cents a pound. Many farmers were locked in at that price.

At tiny Miltona Meats, Greg Johnson kept his price at 35 cents, and retained some very grateful customers.

"We had to," Johnson said. "How can you expect a guy that you've been buying hogs from for 15 years, you know, and tell him to sell you a hog for a dime? You can't ask him to do that. I can't help it. I gotta pay this guy a living wage for what he's trying to make."

This is just the type of personal, small-town sensibility many lawmakers hope to preserve. But in the big business world of beef and pork, others say there may be a price to pay.

Cattle Raisers call on industry to address captive supply issue A statement from the Texas and Southwestern Cattle Raisers Association calling for the Johnson amendment to be dropped from the farm bill.