D.C. Wants to Beef Up Competition in Livestock Markets

Jul 30, 2021  | 3 min  | Ep4650

Accusations of collusive behavior and price fixing leveled against U.S. meat packers have lead to more than one investigation in the past 6-months. The potential remedies have included introduction of a bill in Congress to increase price transparency.

This week, meatpackers and producers were called to Capitol Hill to shed more light on the subject.

Josh Buettner has more.

In the wake of recent ransomware attacks, the coronavirus and ongoing consolidation issues impacting the livestock industry, this week the Senate Judiciary Committee brought together lawmakers and corporate leaders.

Sen. Dick Durbin/R – Illinois, Chair – Senate Judiciary Committee:  “The COVID-19 pandemic, whether it's been problems with supplies, wasted crops and shifts in consumer spending - have shown a bright light on the cracks in our food system that need to be addressed.”

Tim Schellpeper/President of USA Fed Beef/JBS USA/Greeley, Colorado:  “The most significant challenge facing our industry today is labor availability.”

Proponents of independent cattle production said with just 4 major corporations wielding control of about 80 percent of the domestic meat supply, monopolistic practices are top of mind - and black swan events have been misconstrued as the root causes of current financial disparities.

Jon Schaben/Owner – Dunlap Livestock Auction/Dunlap, Iowa:  “I think it's unfair to say that they're causing the problems that we have, which is this great big discrepancy between what our cattle are worth, alive, when we sell them, and what they end up worth as retail beef.”

Farm state lawmakers argued better regulated fiscal structures regarding meat processing would level the playing field via robust price discovery at the sale barn, as opposed to contractual alternative marketing agreements, or AMAs, which favor large packers.

Sen. Chuck Grassley/R – Iowa:  “How do you justify making such low bids when you're turning such a significant profit?”

Shane Miller/Group President of Fresh Meats – Tyson Foods/Dakota Dunes, South Dakota:  “In the Upper Midwest, a larger percentage of cattle feeders prefer to use cash basis as a method to sell their livestock.  And as you go further into the south, they prefer the AMAs.  So, the AMAs guarantee a market for these specialized cattle, but they also ensure that the producer is compensated for the value that they add to the market.”

Cascading effects on grocers, workers and consumers also dominated the conversation, along with ways to tweak existing legislation and align with President Biden’s recent executive order promoting competition across all American markets.

Sen. Amy Klobuchar/D - Minnesota:  “As we forge ahead here and look at some of these specific industries, we also should try to find common ground on some of these changes we can make in general to the laws.  Because then it’s going to be another industry, and then it’s going to be online travel, and then it’s going to be something else…”

For Market to Market, I’m Josh Buettner.

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