As Cattle Groups Making Unprecedented Move to Fight Market Monopoly, U.S. Lawmakers Also Push DOJ for Answers

An unprecedented meeting held early this month among major cattle industry representatives has now produced plans for change. The goal of the group is to not only discuss the current price imbalance between the packer, the feedlot and the ranch, but create change they argue is needed to address a price imbalance in the cattle markets today. 

As Drovers and AgDay first reported last week, six groups, including  NCBA, R-CALF, U-S Cattlemen's Association, American Farm Bureau, National Farmers Union and Livestock Marketing Association, sent representatives to meeting in Phoenix last week. 

The groups, typically at odds, working together they say with the ultimate goal of bringing about a more financially sustainable situation for cattle feeders and cow-calf producers.

A news release from the Livestock Marketing Association stated the group focused on six main issues: 

• Packer concentration
• Price transparency and discovery
• Packer oversight
•  Packers and Stockyard Act enforcement
•  Level of captive supply
• and Packer capacity.

Brooke Miller of the United States Cattlemen's Association told AgDay something drastic needs to be done, first focusing in on packer concentration.

"We had four major multi-national packers' that control well over 80% to 85% of the market," says Brooke Miller, president of U.S. Cattlemen's Association. "It's obvious through the market fundamentals where they're making currently and they're making profits of up to $1,000 a head on these animals and feedlot operators, feeders, cattle producers, backgrounders stockers and all going out of business because it's not profitable. We don't have a free capitalistic market. We have a monopolized market."

The group also agreed to talk to people in their organizations about speeding up the renewal of USDA's Livestock Mandatory reporting, and encouraged the development of local and independent packers. The six groups also agreed to demand the Department of Justice supply an update on its investigation into possible anticompetitive practices in the meatpacking industry.

While the cattle industry is on the same page, several lawmakers are also pushing to get some answers from the Department of Justice about that investigation.

Senators and Representatives sent a letter this week to Attorney General Merrick Garland.

In May of last year, the DOJ's Antitrust Division sent civil investigative demands to the nation's four biggest meatpackers. But the legislators say since that time, the American people have seen no public results from that investigation. In fact, they say there is no information to even suggest whether the investigation has ended or is still ongoing.

Our producers must be able to count on fair & transparent commodity markets. We're urging @TheJusticeDept to continue their investigation into the beef industry. https://t.co/vsMZPoEezr — Senator John Thune (@SenJohnThune) May 17, 2021

AgDay's Clinton Griffiths spoke with Republican Senator John Thune of South Dakota who is helping lead the charge.

"I know there are a lot of producers across South Dakota, and I met with some last week in Rapid City, who are very concerned that what's happening in the marketplace today is a result of manipulation," says Sen. John Thune (R) South Dakota. "The fact that there is a concentration of market power in the hands of a very few packers and whether or not there might be some monopoly, some antitrust issues there that need to be addressed. And i think the justice department, in fairness, needs to take a look at this issue. I mean, this has been building for a long time. It's not a new issue. And we were we asked them to do this a year ago. We still haven't seen anything, any report from them about that. And we think they need to renew this investigation and get some answers." 

I joined Senator Thune + others incl IA republicans Ernst Hinson Miller-Meeks Feenstra in a letter to Attorney General Garland about the need for a swift investigation of the big four cattle packers We urge Dept of Justice Antitrust div 2b MORE VIGILANT + uphold the law — ChuckGrassley (@ChuckGrassley) May 17, 2021

Senator Thune is also asking for a Congressional hearing on the matter. NCBA says it's in the best interests of both producers and consumers for the DOJ to get to the bottom of the current market dynamics. The groups says DOJ should asses why they seemingly always result in producers getting the short end of the deal.