Recently U.S. Senators Mike Rounds (R-SD) and Tina Smith (D-MN) launched a nationwide effort to protect consumers and cattlemen from anticompetitive practices in the beef processing market.
“We’ve been working diligently behind the scenes with Senator Rounds and his staff on this letter and issue for quite some time,” Said SDSGA Executive Director James Halverson. “There has been a tremendous amount of background work done on this, and I believe the data presented here to Attorney General Garland makes a strong case that can no longer be ignored. Producers and consumers each deserve a fair deal, and they haven’t been getting one.”
“This is urgent,” SDSGA President Scott Edoff Said. “Guys are running out of time and more are going completely out of business every day. Cattle producers are taking big losses while the big four packers are laughing all the way to the bank. We will continue to make this issue heard by our D.C. delegation and anyone else who will listen.” He added. “We simply cannot wait for this market to turn around when the packers aren’t playing fair.”
The letter addressed to Attorney General Merrick Garland states:
“Exactly 100 years ago, the United States saw fit to break up the packing industry because of concentration and market manipulation. Since that time, packer concentration and foreign influence has significantly grown and until the question of whether consolidation of power in the meatpacking industry has amounted to violations of our antitrust laws is fully answered, this market will continue to suffer for both the consumer and the producer.”
Currently, four large companies – two of which are foreign-owned – control over 80% of the processing market in today’s economy and operate 18 of the top 20 beef slaughter facilities in the country. This control, the letter states, allows meatpackers to seemingly control prices at their will, or even defy expectations of market fundamentals.
“In the last several years, the price of live cattle in the United States market has plummeted, while the price of boxed beef has significantly increased, raising consumer prices at the grocery store,” the letter said. “Concurrently, the major packing companies realized significant profits, while both U.S. beef consumers and independent cattle producers paid the price. These large price disparities are leading independent cattle producers to go broke and causing consumers to pay an unnecessary, over-inflated premium on beef.”
“If we do not take action, current U.S. policies will be identified as the cause for the demise of the American rancher and American consumers will be forced to pay a higher price for a much lower quality product. The time has come to either enforce or examine our anti-trust laws to restore fairness to the marketplace. American consumers and producers depend on us,” the letter concluded.
“We’re calling on all Members of Congress to join our letter asking the DOJ to investigate the packer oligopoly for anticompetitive behavior,” Senator Rounds said. “This issue doesn’t just impact cattle ranchers. It impacts every single American family who purchases beef at the grocery store. We must get to the bottom of this before it drives beef prices higher and forces more independent cattle producers out of business.”