NCBA, Sen. Fischer Ask Trump To Investigate Cattle Markets
The National Cattlemen’s Beef Association and Nebraska Senator Deb Fischer are asking President Donald Trump to investigate possible irregularities in the cattle markets the past several weeks.
NCBA asked Trump to act quickly to investigate what it calls a “striking disparity between boxed beef prices and cattle prices in the futures and cash markets during the current COVID-19 crisis and following the packing plant fire in Holcomb, Kan., last August.”
Update: In a tweet Wednesday afternoon, Sen. Fischer said USDA is expanding the investigation.
"I spoke with the @USDA who confirmed that the agency will be expanding its Holcomb fire plant investigation to include COVID-19 market disruption," she tweeted. "This is what I called for in my letter to USDA yesterday. This is a good decision to address potentially unfair practices."
In a statement issued Wednesday (April 8), the group said NCBA president Marty Smith sent a letter to Trump asking him to direct USDA to expand the ongoing investigation into market activity after the Holcomb fire to include current market volatility, “in the hope of identifying whether inappropriate influence occurred in the markets, and to provide our industry with recommendations on how we can update cattle markets to ensure they are equipped to function within today’s market realities.”
Many cattlemen have raised concerns over the cattle market’s volatility that was on full display in March as the COVID-19 crisis rapidly escalated. Consumers emptied grocery store meat cases in a panic buying spree which quickly produced a spike in wholesale beef prices of about $50 per cwt. within 10 days as retailers aggressively placed orders to replenish inventories. At the same time, cattle prices across all classes fell 10% to 15% compared to January highs.
Feedyards saw mid-March closeouts fall from $100-plus per head profits to $100-plus per head losses within a week. During the same period, beef packer profits rose from $150 per head to over $550 per head the week ending March 27, according to the Sterling Beef Profit Tracker.
Smith’s letter also requests the Commodity Futures Trading Commission to study the influence of speculators on live and feeder cattle futures contracts to determine whether these contracts remain a useful risk-management tool for cattle producers.
“Fair and functioning cattle markets are vital to the sustainability of our industry,” Smith wrote. He also pointed out the importance of keeping the beef supply chain moving during this time of volatility and instability.
“The market woes for cattle producers will only grow if packing plants shut down or slow down for an extended period,” Smith stated. “As cattle producers, we are the beginning of the beef supply chain, and we need continued vigilance and oversight of all cattle market participants – for the benefit of America’s cattle producers and all Americans.”
Fischer said she’s hearing from constituents about the impact the COVID-19 crisis is having on cattle operations.
"Americans are purchasing more beef products at grocery stores, which is resulting in another round of windfall profits for meatpackers," Fischer said. "Meanwhile, producers are taking price losses that threaten the viability of their businesses."
Fischer wrote a letter to Senate Judiciary Antitrust Subcommittee leaders calling for a public hearing to examine claims of price manipulation, collusion, restriction of competition, price gouging or other unfair practices within the current beef meatpacking industry structure.
Fischer also wrote to Agriculture Secretary Sonny Perdue, requesting USDA expand its investigation of beef pricing margins to include recent market impacts as a result of COVID-19. The investigation was launched following the Holcomb, Kansas, beef processing facility fire.