The Department of Agriculture Wednesday released a report on its ongoing boxed beef and fed cattle price spread investigation. Agriculture Secretary Sonny Perdue says the closure of the Tyson beef packing plant following a fire at the facility in Holcomb, Kansas, and the COVID-19 pandemic, “clearly disrupted the markets and processing systems responsible for the production and sale of U.S. beef.”
The report also discusses several policy considerations in light of the desire by many market participants for improved price discovery, reinvigorated competition, and a more transparent relationship between the prices for live cattle and the resulting products. The report does not examine potential violations of the Packers and Stockyards Act.
However, USDA staff have maintained a cooperative relationship with the Department of Justice Antitrust Division staff and have discussed allegations of anticompetitive practices in the meatpacking industry. Should USDA find a violation of the Packers and Stockyards Act, it is authorized to report the violation to DOJ for prosecution.
The National Cattlemen’s Beef Association welcomed the investigation update by the Department of Agriculture into cattle markets. NCBA Vice President of Government Affairs, Ethan Lane, says, “this issue has remained a central topic of conversation for NCBA.”
The report comes days before NCBA will hold its annual summer meeting. Lane says the association still awaits the results of the Department of Justice’s ongoing investigation into the matter as well.
Iowa Republican Senator Chuck Grassley applauded the report, saying, “The cattle market industry is broken.” Grassley says, “Congress has a responsibility to heed the advice of this report and take action to restore cattle price transparency.”
The North American Meat Institute, however, notes the report identifies no wrong-doing, and affirms that two extreme and unforeseen events affected beef markets. NAMI President and CEO Julie Anna Potts stated, “It is difficult to see how the USDA’s recommended legislative proposals would have changed the outcome of the fire or the pandemic.”