DOJ Subpoenas Big 4 Beef Packers

DOJ Subpoenas Big 4 Beef Packers

The Department of Justice has formally demanded information from America’s Big 4 U.S. beef packers regarding potential antitrust violations, Bloomberg reported Thursday, citing a source familiar with the matter.

The DOJ antitrust division sent investigative demands, similar to subpoenas, to Tyson Foods, JBS SA, Cargill, Inc., and National Beef Inc., and has contacted state attorneys general about the probe after a group of states called for an investigation, said the source, who declined to be named because the inquiry is confidential.

The DOJ request comes at a time of intense scrutiny on beef packers who have struggled with shutdowns and reduced plant outputs due to the coronavirus. Cattle markets have seen increased volatility which reduced prices paid to producers while supply shortages dramatically increased the price of wholesale beef, increasing packer revenues per animal processed.

While the coronavirus produced a massive industry-wide impact on cattle and beef markets, it was the second black swan event creating disruptions in less than a year. Last August a fire at Tyson Foods’ Finney County facility closed operations for several months, with similar abbreviated impacts on both live cattle and wholesale beef prices. The Big 4 beef packers control about 80% of the beef processed for U.S. consumption, and their market dominance has spurred longstanding concerns over their market leverage over cattle producers.

In early May, President Donald Trump said he 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.

“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.

That statement came at the height of coronavirus slow downs as many beef, pork and poultry plants had either closed temporarily or significantly reduced production. Both beef and pork processing capacity had been reduced by nearly 40%, though both industries have seen slaughter capacity steadily increase in recent weeks.

Prior to asking the DOJ to investigate, Trump issued an executive order labeling meatpacking plants “critical infrastructure” that must stay open. The order came at a time when packers struggled to keep plants open while coronavirus cases among workers were spiking. The slow downs revealed how even small disruptions in processing could ripple through supply chains and create product shortages at retail outlets.

Disruptions at beef packing plants reduced slaughter of cattle and left many standing in feedyards, increasing producer costs and further disrupting feeder cattle and calf markets across the country. Industry analysts estimate the backlog of cattle could be near 1 million head before processing levels return to pre-COVID-19 levels.

Related stories:

Trump Asks DOJ To Investiagate Meat Packers

 

Latest News

Biden Administration Restores Wildlife Protections
Biden Administration Restores Wildlife Protections

The U.S. Fish and Wildlife Service plans to reinstate rules protecting endangered plants and animals, action that would reverse changes made during the Trump Administration that weakened the Endangered Species Act.

Across Breed EPD Adjustment Factors
Across Breed EPD Adjustment Factors

EPDs from multiple breeds can be compared by adding/subtracting the appropriate adjustment factors to the EPDs resulting from the most recent genetic evaluations for each of 18 breeds.

APHIS Now Thinks Wild Birds Are to Blame for Highly Pathogenic Avian Influenza's Arrival on Four U.S. Dairies
APHIS Now Thinks Wild Birds Are to Blame for Highly Pathogenic Avian Influenza's Arrival on Four U.S. Dairies

The livestock industry continues to grapple with the first confirmed cases of HPAI in cattle, while federal and state agencies continue to assure consumers there's no concern about the safety of the U.S. milk supply.

Skills Survey Reveals U.S. Agriculture & Food Industry Workforce Needs and Gaps
Skills Survey Reveals U.S. Agriculture & Food Industry Workforce Needs and Gaps

U.S. employers report challenges in finding suitable job candidates with work-ready skills to fill open roles in ag. The AgCareers.com U.S. Skills Survey offers insights, data and trends to address skill development.

USDA Authorizes CRP Graze and Hay Donations to Wildfire Victims
USDA Authorizes CRP Graze and Hay Donations to Wildfire Victims

Conservation Reserve Program (CRP) participants can donate emergency grazing authority to ranchers in Nebraska, Oklahoma and Texas impacted by recent wildfires.

New Guide Helps Producers Maximize Values of Cull Cows
New Guide Helps Producers Maximize Values of Cull Cows

A new resource developed by the National Cattlemen’s Beef Association and CattleFax helps cattle producers maximize profitability from their culling decisions.