Sen. Deb Fischer, a member of the Senate Agriculture Committee, recently commented after U.S. Department of Agriculture (USDA) concluded its investigation this week into market manipulation in the cattle industry following a fire at a Tyson Foods plant in Holcomb, Kan., and the COVID-19 pandemic.
“The report confirms our serious misgivings about the many factors that are working to destabilize the marketplace,” Fischer said. “In light of these events and this report, I will be introducing legislation soon in the Senate aimed at providing equity and transparency for all market participants.”
The report, Fischer said, was prepared by USDA’s Agricultural Marketing Service in coordination with the Office of the Chief Economist, summarizes market conditions, fed cattle prices, boxed beef values and the spread before and after the fire and plant closure at the Tyson Holcomb plant, and before and during the COVID-19 pandemic.
She said it also discusses several policy considerations “in light of the desire by many market participants for improved price discovery, reinvigorated competition, and a more transparent relationship between the prices for live cattle and the resulting products.”
In April, Fischer wrote a letter to USDA requesting that the agency expand the investigation into pricing margins that was launched following the Holcomb, Kan., fire to include potential unfair market practices during the COVID-19 crisis.
In May, Fischer led a bipartisan group of 18 of her Senate colleagues in writing a letter to the U.S. Department of Justice (DoJ) requesting that the department investigate potential anticompetitive activities in the highly concentrated beef packing sector. Following that letter, she said the DoJ subpoenaed the nation’s four largest beef packers as part of its ongoing investigation.
Sen. Ben Sasse said that market transparency and price discovery are important to Nebraska’s cattle, hog and sheep producers.
“It has been tough for these guys,” Sasse said. “The more tools USDA has to quickly and properly respond to market disruptions the more confidence producers can have in the markets. If USDA needs more from Congress, we need to have those discussions.”
In April, Sasse wrote to the Commodity Futures Trading Commission urging them to review market volatility and increasing widening of boxed beef prices to live cattle prices.
National Farmers Union President, Rob Larew, said the report must be accompanied by real and meaningful reforms.
“Price fixing in the meat industry is not a new phenomenon; a century ago, Farmers Union members were contending with similarly high levels of concentration among meatpackers and the anticompetitive practices that kind of market power enables,” Larew said. “Recognizing the immense danger of unchecked corporate consolidation, Congress and the White House worked together to restore competition and shield farmers and ranchers from abusive treatment.”
Larew said NFU appreciates USDA’s efforts to examine this issue and present potential solutions, “but it is clear that this is just the beginning; now, like 100 years ago, radical and immediate action is needed to create a fair and balanced food system.”
“The agency must thoroughly conduct its ongoing investigation, for which we intend to hold them to account,” he said. “Additionally, we urge legislators, USDA, and other federal agencies to strengthen protections for farmers, enforce existing antitrust regulations, and prevent undue market power in the future.”
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