USDA releases report on meat-packer investigation

U.S. Department of Agriculture’s Agricultural Marketing Service released Wednesday a report on the spread on prices between meat packers buying cattle and what they charge retailers, and it is still continuing to investigate,

The investigation started after multiple agricultural organizations and politicians called for a investigation on the price spread following a fire at Tyson’s Holcomb meat packing plant and during the COVID-19 pandemic.

Tyson is one of four companies that dominate meat packing in the United States and claims have been made for years of price fixing by the companies and violations of the Packers and Stockyards Act that regulates the industry.

“Findings thus far do not preclude the possibility that individual entities or groups of entities violated the Packers and Stockyards Act during the aftermath of the Tyson Holcomb fire and the COVID-19 pandemic,” the report says. “The investigation into potential violations under the Packers and Stockyards Act is continuing. ”

The report also says USDA is discussing with the U.S. Department of Justice allegations of anticompetitive practices in the meat packing.

“Should USDA find a violation of the Packers and Stockyards Act, it is authorized to report the violation to DOJ for prosecution,” the report said.

Both U.S. Sen Jon Tester, D-Mont., and U.S. Sen. Steve Daines, R-Mont., who had called for an investigation, praised the report but, said it is only the beginning.

“USDA’s findings are an important step forward in the ongoing investigation and provides much needed details on the impacts of COVID-19 on cattle markets and beef prices,” Daines said. in a press release “But more works needs to be done and I will continue to push the USDA and the DOJ to actively coordinate and conduct a complete and thorough investigation to ensure our Montana ranchers can compete in a fair marketplace.”

Tester, who in the past has raised cattle on his farm west of Big Sandy, said the report shows the need to take action on a bill he introduced with Sen. Chuck Grassley, R-Iowa.

“The investigation so far clearly shows that Congress needs to take action in order to make sure the market is working and that consumers and folks working in production ag are protected,” he said. “Congress should immediately move to take up my legislation with Senator Grassley that would ensure a proportion of cattle transactions happen on the spot market, so we can level the playing field for Montana ranchers.”

Tester and Grassley’s spot pricing legislation is a plank of Tester’s Rancher Relief Plan, which aims to provide certainty to Montana’s small and medium sized cow calf operators, Tester’s release said. The bill would require large-scale meat packers to increase the proportion of negotiable transactions that are cash, or ‘spot,’ to 50 percent of their total cattle purchases. This would improve accuracy of formula pricing — which currently accounts for a significant portion of transactions — and increase transparency for producers and feeders.

Tester’s release said the bill also includes increasing interstate commerce and diversifying meat production in Montana and neighboring states and the first bipartisan Senate push for mandatory Country of Origin Labeling since Congress repealed it in 2015

Congress repealed the labeling after World Trade Organization ruled the labeling unfairly disadvantages products from outside the United States.

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Online: USDA ARMS Boxed Beef and Fed Cattle Price Spread Investigation Report: https://www.ams.usda.gov/sites/default/files/media/CattleandBeefPriceMarginReport.pdf .