Belgrade resident and U.S. Republican Sen. Steve Daines has asked the U.S. Department of Justice to look into the nation’s meatpacking industry for violations of antitrust laws and restraint of trade.
In this bipartisan complaint, Daines was joined by Montana’s other senator, Democrat Jon Tester.
“This investigation had started before the last election,” Daines told the Belgrade News. “We had been working with (U.S. Attorney General William) Barr. We’ve asked (U.S. Attorney General) Merrick Garland to continue it., to pick up where Barr left off.”
“The time has come for the government to determine whether the stranglehold large meatpackers have over the beef processing market violate our anti-trust laws and principles of fair competition,” it said.
Some four meat packinghouses control 80 percent of the industry, Daines stated.
Tyson Foods, JBS SA, Cargill and National Beef/Marfrig are known to control more than 80 percent of the beef processing in this country.
According to South Dakota ag newspaper The Tri-State Livestock News, “During the COVID crisis, the influence of the big four packers over cattle prices has become more obvious, say some cattlemen’s groups. Many packing houses have closed, fully or in part, mostly due to sick workers, leaving cattle feeders no options for their slaughter-ready cattle. Boxed beef prices have more than doubled in recent months, while live cattle prices have dropped by 20 percent or more, and many feeders were unable to obtain bids, forcing them to feed cattle past their optimum point – lessening the value of the cattle and increasing the feeders’ costs.”
Daines said the U.S. Department of Agriculture had previously investigated the same charges but lacked the legal authority to subpoena and force the meatpackers to comply.
“The DOJ has that power and can fully investigate price-fixing and market manipulation,” he said.
“Montana families are paying more for meat at the grocery store, and Montana ranchers are making less on their cattle. Big meatpackers are profiting at the expenses of Montana families.”
Exactly a century ago, the U.S. broke up the meatpackers’ monopoly with the 1921 Packers and Stockyards Act. Now it’s time to bring that legislation up to date, Daines said.
According to the senators’ letter, the industry is now more consolidated than it was in 1921. In 2021, four companies operate 18 of the top 20 beef slaughter facilities in this country, which equals 94 percent of the capacity.
“Ironically, two of the four giant domestic processors are foreign owned,” their letter said. “In our opinion, that concentration has caused a market disconnect, resulting in tangible market manipulation.” the letter continued.
The letter continued, “Every piece of beef legislation introduced before Congress is the direct result of our attempts to put a band-aid on the real issue: packer concentration.
“One hundred years ago the United States saw fit to break up the packing industry because of concentration and market manipulation. Since that time, packer concentration and foreign influence has significantly grown and until the question of whether consolidation of power in the meatpacking industry has amounted to violations of our antitrust laws is fully answered, this market will continue to suffer for both the consumer and the producer.”
Ranchers “shouldn’t have to battle a problem their government has an obligation to fix.”
Earlier reporting by the Des Moines Register in Iowa stated that a level of 48 percent of packer ownership concentration was the “break-even point” for antitrust concentration and market manipulation.
One reason for the disparity between what ranchers are paid for their animals and what the meat industry charges is probably the ability of meatpackers to import beef from foreign countries, the letter continued. It included graphs showing that as cattle prices increased, so did the packing houses’ imports of their foreign-owned animals. The graphs also show that plummeting prices in the live cattle market correspond exactly with the repeal of COOL (Mandatory Country of Origin Labeling) legislation.
Daines said he supports the reinstatement of COO, and also supports changes in meat inspection statutes, with state inspection standards being accepted by the USDA.
As for the DOJ letter, Bloomberg News recently reported that DOJ already has contacted the big four meatpackers asking for information related to possible anti-trust violations. That “request” was essentially a subpoena.
According the Tri-State Livestock News, those DOJ subpoenas to the meatpackers follow criminal charges two weeks ago against four current and former owners of chicken processing companies, including the CEO of Pilgrim’s Pride Corp., America’s second biggest chicken producer. They were accused of conspiracy to fix prices for chickens sold to grocery stores and fast-food chains.
Daines and Tester were joined in signing that DOJ letter by other members of Congress from farm states.
“When the Senate held its confirmation hearings for Merrick Garland, I voted for him. I asked him if he would investigate this, and he said he’d look into it,” Daines concluded.