Trump Asks DOJ To Investigate Meat Packers

President Trump ( WH )

President Donald Trump told reporters Wednesday he has asked the Justice Department to look into allegations that U.S. meat packers broke antitrust law because the prices paid to farmers and ranchers has declined even as meat prices rose, Reuters reports.

“I’ve asked the Justice Department to look into it. ... I’ve asked them to take a very serious look into it, because it shouldn’t be happening that way and we want to protect our farmers,” the president said at a  White House event attended by Agriculture Secretary Sonny Perdue and Iowa Governor Kim Reynolds.

“Are they dealing with each other? What’s going on?” the president asked.

Many beef, pork and poultry processing plants have either closed temporarily or significantly slowed their production in recent weeks which has reduced the markets farmers and ranchers have to sell their livestock. Both beef and pork processing capacities have been reduced by as much as 40%.

Trump issued an executive order last week labeling meatpacking plants “critical infrastructure” that must stay open. Yet the supply shortage continues and retailers Costco Wholesale Corp and Kroger Co are limiting meat purchases and Wendy’s Co to announced Wednesday it would focus on marketing chicken, having taken its signature “fresh” hamburgers off the menu at some restaurants.

Perdue told reporters that U.S. meatpacking plants shut down because of coronavirus outbreaks would be fully back in production in a week to 10 days. Perdue also said in April the agency would investigate diverging prices for cattle and beef during the outbreak. He expanded a probe into the market that USDA began last year after wholesale beef prices soared at the same time cash cattle prices declined after the fire at Tyson’s Finney County, Kan., facility.

USDA reported the Choice beef cutout price on Wednesday at $449.18 per cwt., up $20.19 from Tuesday, and up $71.73 per cwt. (+16%) since Friday’s (May 1) close. Meanwhile, cash fed cattle prices were reported at $95.18 on Wednesday (May 6) by USDA.

 

Comments
Submitted by Rick on Thu, 05/07/2020 - 17:49

Unbelievable, everyone understands that the reason the packer margin is so wide and the feeder margin so narrow is simply because the packers got themselves in trouble by operating their processing operations without any coronavirus mitigation measures. Now, they can't process the cattle into beef and cut the price in order to slow the intake while the lack of processed product causes their customers to bid up prices.
The one time in thirty years where there is a rational explanation for the price difference and trump suspects anti-trust action and threatens action.
In a few weeks, DOJ will come back and say, "nothing to see here" and then at the first available opportunity the packers will resume price-fixing.

Submitted by David on Thu, 05/07/2020 - 22:39

The Packers are raping and pillaging the rancher and causing them to go broke