Sens. Mike Rounds (R-SD) and Elizabeth Warren (D-MA) have introduced a resolution that would direct the Federal Trade Commission (FTC) to report to Congress within one year regarding anti-competitive practices and violations of antitrust laws in the beef packing industry. This would include price fixing, anti-competitive acquisitions, supply chain dominance and monopolization.
“For the past two years, I have been calling on the Department of Justice to investigate allegations of price-fixing, collusion and other unfair practices in the beef packing industry,” Rounds said. “Unfortunately, the Department of Justice has seemingly not made these concerns a priority, and both consumers and cattle producers in South Dakota continue to suffer as a result.”
The joint resolution would require the FTC to report within one year to Congress on the following:
• The extent of anti-competitive practices and violations of antitrust laws in the beef packing industry.
• The monetary and other harms of anti-competitive practices and violations of antitrust laws in the sector on consumers, ranchers, farmers, plant workers and small businesses.
• Recommendations for legislation or other actions.
“Only four billionaire corporations control 85 percent of the market for beef—and these giant corporations have been using their market power to raise prices for consumers and have reduced pay for ranchers, farmers and plant workers, all while padding their bottom lines,” Warren said.
“It’s time for Congress to get back in the game and use every tool to promote competition in our markets so we can lower costs for families, and I’m glad to be leading this bipartisan effort with Senator Rounds.”
Upon the resolution announcement, the North American Meat Institute (NAMI) released a myth-fact sheet “debunking the mischaracterizations about beef and cattle markets” in the resolution. The resource defends the beef companies and several of the assertions in the resolution.
The resolution contends that an average of nearly 17,000 cattle ranchers have gone out of business each year since 1980. NAMI refuted that, saying according to USDA Census of Agriculture 1982 data, there were 671,702 cattle operations, and “losing 17,000 cattle farms and ranches per year for the 39 years since 1982 would have resulted in losing 663,000—or 99 percent—of those farms and ranches marketing cattle in 1982. Obviously, that is not the case.”
NAMI also noted the resolution claims the cost of wholesale beef and the costs for ranchers increased by 60 percent while packers saw record profits. The organization also refuted this, saying there are different supply and demand forces on cow-calf producers, feeders, packers and retailers, which is why each sector can experience different market effects.
“No sector—cow-calf, feedlot, nor packer—has realized positive margins every year. However, the cow-calf sector suffered negative margins the fewest number of years of the three (sectors), and the packing sector has experienced the most,” NAMI said.
The group also discredited the resolution’s assertion that the top four beef packers control 85 percent of the beef supply to the wholesale market, calling it a “misleading exaggeration.” NAMI asserted that fed cattle make up 79 percent of total cattle slaughter, and cows and other non-fed cattle make up the remainder to mostly be made into hamburger meat.
“This distinction is important because up to 50 percent of all beef in the U.S. is consumed as hamburger,” NAMI said. “Even factoring in the non-fed cattle slaughter plants they own, the four largest beef packers represent about 70 percent of total U.S. beef production.”
The resolution is endorsed by the U.S. Cattlemen’s Association (USCA), Ranchers-Cattlemen Actional Legal Fund, United Stockgrowers of America (R-CALF USA), South Dakota Farmers Union, South Dakota Stockgrowers Association, Groundwork Collaborative and Farm Action Fund.
“We have not yet received the results of the Department of Justice’s investigation into the beef industry directed by former Secretary of Agriculture Sonny Perdue. This is completely unacceptable,” said USCA Vice President Justin Tupper.
Bill Bullard, CEO of R-CALF USA, said “Cattle producers and consumers are both being harmed by the unprecedented concentration of the beef packing industry, and we applaud Sens. Rounds and Warren’s call upon the FTC to determine the extent to which this concentration has facilitated antitrust violations in our industry.” — Anna Miller, WLJ managing editor
