President Trump to Department of Justice: Investigate meatpackers

President Donald Trump signing the five-year farm bill on Dec. 20.

President Trump asked the Department of Justice, on May 6, 2020 to investigate meatpacker pricing activity, according to AgWeb.

“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, reported AgWeb.

All three national cattle and beef organizations along with 23 state cattle organizations, many senators and others have asked that the Department of Justice help the USDA with the investigation they were already planning to conduct.

11 state Attorneys General, two days ago, sent a letter to AG William Barr asking for a DOJ investigation.

“Competition issues arising from agricultural markets existed long before the COVID-19 pandemic and will persist long after we defeat the current crisis. The US beef processing market is highly concentrated, with the four largest beef processors controlling 80 percent of the U.S. beef processing. In this highly concentrated industry, meatpackers have achieved sizeable profit margins. Cattle rancher, however, who for generations have supplied our nation’s beef, are squeezed and often struggle to survive.  Consumers, moreover, do not realize the benefits from a competitive market,” said the attorneys, in their letter.

USDA has been investigating meatpacker pricing activity since last fall, following the live cattle price dive stemming from the Holcomb, Kansas, Tyson meat plant fire in August of 2019. USDA more recently said it would also investigate the big four packers’ buying and selling activities in the wake of COVID-19. Boxed beef prices have more than doubled, while live cattle prices have dropped about 20 percent. Several meatpacking facilities have closed or are running at less than capacity because of COVID-19 infected workers or concerns over social distancing.

“The widening gap between cattle producer and packer profit margins raise serious concerns about potential instances of price manipulation and other unfair practices within the beef industry, especially considering that four meat packing companies control more than 80 percent of the beef supply in the United States,” write South Dakota Senator John Thune on April 9.

“With these concerns in mind, I respectfully request that the DOJ Antitrust Division investigate the cattle market volatility following the Tyson plant fire and during the COVID-19 pandemic to determine if any anticompetitive behavior has occurred,” said Thune.

The industry impatiently awaits results from the first investigation.