Calls again go out for inquiry, action on meatpacking industry

Montana political leaders are again joining others around the country asking the U.S. Department of Justice to take action on allegations that the “stranglehold” large meatpackers have over the beef processing market violate U.S. antritrust laws, although some say that is not enough.

Montana’s Sens. Jon Tester, a Democrat, and Steve Daines, a Republican, and Montana’s Republican U.S. Rep. Matt Rosendale are signing off on a bipartisan letter members of Congress sent to U.S. Attorney General Merrick Garland calling for an investigation.

Montana Gov. Greg Gianforte joined a group of other governors sending a similar letter to Garland last week asking U.S. Department of Justice to continue its investigation into the meatpacking industry started last year.

“Decades of consolidation in meatpacking has significantly limited the options that producers have to market their cattle and has created a situation where one segment of the beef industry has near total control over the entire market,” the governors’ letter reads. “We urge you to continue to investigate this matter with the urgency it calls for.”

The members of Congress made a similar plea.

“In the last several years, the price of live cattle in the United States’ market has plummeted, while the price of boxed beef has significantly increased, raising consumer prices at the grocery store,” their letter reads. “Concurrently, the major packing companies realized significant profits, while both U.S. beef consumers and independent cattle producers paid the price. These large price disparities are leading independent cattle producers to go broke and causing consumers to pay an unnecessary, over-inflated premium on beef.”

The letter says the U.S. meatpacking industry is more consolidated today than when the Packers and Stockyards Act was passed in 1921 “to assure fair competition and fair trade practices, to safeguard farmers and ranchers … to protect consumers … and to protect members of the livestock, meat, and poultry industries from unfair, deceptive, unjustly discriminatory and monopolistic practices.”

The letter says, four companies operate 18 of the top 20 beef slaughter facilities in the country, 94 percent of the country’s capacity.

“Ironically,” the letter adds, “two of the four giant domestic processors are foreign-owned.”

Tester has been pushing on the issue essentially since he was elected to the Senate, co-sponsoring the Captive Supply Reform Act in 2007, and the work has continued since then, with Montana members of Congress repeatedly sending letters to DOJ and U.S. Department of Agriculture asking for investigation and action.

Earlier this year, Tester and Daines joined Sen. Chuck Grassley, R-Iowa, and other senators in introducing a bill that would require a minimum of 50 percent of a meat packer’s weekly volume of beef slaughter be purchased on the open or spot market. That would create price transparency, which critics say meatpackers now can avoid due to loopholes.

Tester and Grassley introduced the bill in 2020, but it did not move in the midst of the COVID-19 pandemic.

Daines also cosponsored a bill introduced by Sens. Deb Fisher, R-Neb., and Ron Wyden, D-Ore., to require the creation and maintenance of a cattle contract library tracking cattle marketing prices.

Bill Bullard, CEO of the Billings-based independent cattle producers organization R-CALF USA, praised the call for more investigation and action.

“Our ranching members greatly appreciate Sen. Testers’ personal commitment, and his willingness to work with all his congressional colleagues, to fix our broken cattle and beef markets in a way that ensures the next generations will have a competitive U.S. ranching industry,” he said.

But Montana Cattlemen Association President Gilles Stockton said, while his organization is grateful they wrote the letter, it is not enough.

  “We are concerned that this is a stalling tactic rather than a prelude to action,” he said. “The cattle market has been studied numerous times and it is totally clear that the beef packers are in flagrant violation of the Packers and Stockyards Act.

“Rather than wait for a lengthy investigation, these senators should immediately reintroduce the Captive Supply Reform Act that Sens. Grassley, Enzi and Tester wrote in 2007,” Stockton said. “This act actually corrects the market dysfunction and will immediately restore competition to cattle markets.”