Beef prices rise and fall for the same unglamorous reasons they always have: supply cycles, plant utilization and downstream demand. That story doesn’t fit in a headline, so the search for villains keeps returning — secret control, foreign dominance and collusion.
This article addresses three claims head-on:
- Packers colluded to raise prices
- The BIG 4 and foreign-owned firms control U.S. beef
- Packers set cattle and retail prices at will.
The truth is less thrilling than a press conference or soundbite, but it is, well... the truth!
Debunk No. 1: Packers colluded to raise prices
Many have said the BIG 4’s decisions to settle price fixing claims out of court is an admission of guilt. However, through many industry contacts, the true nature of the price fixing settlements came from each firm deciding it was far cheaper to settle than to continue paying legal fees. While this was understandably logical, it created more scrutiny as it made the packers look guilty — even if they were innocent.
If collusion were the driver, you wouldn’t see a continued increase in the spread between wholesale and retail prices, nor would you see packer spreads expand and contract with plant utilization bottlenecks.
- Herd cycles drive the baseline. When the national herd tightens, prices lift. When the herd rebuilds, they ease.
- Margins behave within supply constraints, operational efficiencies and consumer preferences — not conspiracies. Spreads widen when plants can’t run (labor, downtime, COVID, etc.), and compress when chain speeds normalize.
- The “spike” periods line up with observable shocks, not back-room meetings.
Exhibit A - Ground Beef - Who Should the Consumer Blame for Higher Prices?
- 2011 to 2013: Ground beef spread between retail and wholesale = $1.64/lb.
- 2023 to 2025: Ground beef spread between retail and wholesale = $3.22/lb.
- Spikes in wholesale price, away from the dressed cattle price, are reflective of COVID and the lingering effects of the glut of cattle in 2021 and 2022.
- The price reflected in retail does not translate to the packer.
So what? Collusion isn’t required to explain any of the big moves. The cattle cycle and plant utilization do the heavy lifting.
Debunk No. 2: The BIG 4 and foreign-owned packers control U.S. beef
This talking point usually leans on fed-cattle concentration and then generalizes to the entire beef market. That’s a category error. While the BIG 4 have between 80% to 85% of the fed production capacity, they only have about 50% of the non-fed beef production.
- Counting all federally inspected beef (fed and non-fed) changes the picture. Non-fed volume (cows/bulls) is material and not monopolized by any single group.
- Concentration is variable — not a one-way march. The BIG 4 share has moved with investment cycles, openings/closures and permitting/labor constraints.
- Profit data doesn’t match the control story: persistent, outsize returns would be the tell. Outside of shock windows, long-run segment margins in public filings sit in the low single digits (see the Tyson graph below).
What portion is foreign-owned? Using total FI production (fed + non-fed) rather than fed-only stats, the combined share held by foreign-owned firms JBS and National Beef is meaningfully lower than headlines.
A reasonable, plant-by-plant roll-up over the last decade typically places their combined share in the low–to–mid 30% range of total FI beef, varying by year as capacity and throughput shift. The exact value depends on which year you pick and whether you measure capacity or actual production. But in either case, it is well below “control of the whole industry.”
While it is important for the country to keep tabs on foreign-owned interests, especially in our food supply chain, we should be careful about miss-characterizing their actual influence on the market.
So what? Ownership headlines make noise; capacity and throughput make prices. The practical chokepoint for ranchers, feeders, and consumers is capacity resilience; labor, downtime, logistics, permitting, not the nationality of owners.
Debunk No. 3: Packers control cattle and retail prices
Prices move because the chain is… a chain. Live cattle trade into the wholesale cutout, and wholesale gets translated into retail categories with delays, packaging, labor and merchandising layered on top.
Key points:
- Live ↔ wholesale co-movement is structural. Cattle supply and plant speed determine how quickly shocks pass through and how wide spreads get.
- Retail is sticky by design. Grocers price to categories and promotions — not to a daily cattle quote. That’s why your ground beef figure shows wholesale and cattle tracking while retail moves on a different cadence.
- And if packers truly “set” prices, they wouldn’t periodically lose money for more than year at a time. Yet, they do.
Exhibit B - Profit Margin by Segment
- Sterling publishes a Beef Profit Tracker that outlines expected returns by segment in the industry.
- Adapting this information and overlaying Dressed Cattle Price and the Choice Cutout, it becomes clear that market control is clearly not in the hands of the packer (or anyone).
- The accelerated rise in cattle prices, due to supply, has outpaced the cutout and led to major packer losses.
Exhibit C - Tyson vs S&P
- Tyson Beef versus S&P: ~4% average segment operating margin across 17 years. Only the COVID dislocation produced standout highs. That’s not a price-setting juggernaut. That’s a cyclical, asset-intensive business struggling to survive.
So what? Why would the beef packers, with all the alleged control over prices and markets, lose money some years, and underperform equity markets by more than 50%?
Notes for policy staffers (pragmatic, data-first)
- Country-of-Origin Labeling (beef): Don’t sell mandatory labels as a price-lowering tool. Past scanner data didn’t produce a durable retail demand lift. Keep origin claims voluntary and program-based for customers who will pay.
- Imports: Incremental flows are predominantly lean trim, offsetting non-fed shortages and keeping grinds available. Blunt Section 232 quotas/tariffs raise consumer prices without fixing structural supply.
- Grazing/public lands: Additional acreage helps over time, but herd rebuilds are multi-year and capital-intensive. Anchor expectations in timelines, not headlines.
- Transparency: Back consistent monthly reporting on capacity utilization and live↔cutout spreads, plus better outage reporting. Reducing rumor gaps lowers volatility without picking winners.
Brief Rebuttal FAQ
“If there’s no control, why did packer margins spike in 2020?”
Because capacity collapsed. When dozens of shifts vanish, wholesale outruns live supply. Spreads narrowed as chain speeds recovered.
“Don’t foreign owners dominate U.S. beef?”
Not really. On total FI beef, JBS + National Beef generally sit in the low–to–mid 30% combined share, moving with capacity and production each year; not domination.
“Would mandatory origin labels fix retail prices?”
No. They add cost and didn’t produce a durable demand bump last time. Voluntary, auditable programs capture premiums without taxing everyone.
“Retail doesn’t track cattle, doesn’t that prove manipulation?”
Retail is category-managed and sticky. Labor, packaging and promotions add inertia. That’s why wholesale/cattle co-move while retail moves on a different cadence.
Conclusion
The U.S. beef complex doesn’t need a boogeyman to explain price behavior. It needs sober arithmetic and better throughput. When you measure the right things — herd size, utilization, spreads and the composition of imports — 25 years of history line up. The truth may be boring. It’s also what helps ranchers, feeders, packers, retailers and consumers make better decisions.
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— Hyrum Egbert authors the biweekly “The Big Bad Beef Packer” newsletter, which takes a look at packinghouse truths, trends and tough questions.
