State Cattlemen's Associations Request Investigation into Cattle Markets

On Monday, April 20, 2020, 23 state cattlemen’s associations signed a letter requesting an investigation of beef pricing margins by the Department of Justice (DOJ) which resulted from two recent extreme market shifts due to a packing plant fire in Holcomb, Kansas, in August 2019, and more recently due to COVID-19.

The organizations believe determining evidence of any fraudulent business practices within the meatpacking industry is vital to our producer’s continuity of business and needs to be identified quickly and rectified immediately.

The extreme market degradation to the producer segment, followed by sharp increases and unseasonal profitability of the packing segment through boxed beef prices, is reason for tremendous concern. These market reactions absolutely emphasize how the production sector of the industry is exposed to the highest potential for risk with little-to-no leverage to change that risk position.

The letter explains both the packing plant fire and COVID-19 situations, and how they have impacted the market and negatively affected the producer. Both situations saw average cash fed cattle prices drop while packing plants maintained harvest capacity and boxed beef values increased significantly. Only now, COVID-19 includes logistical stressors on the nation’s food production and distribution system.

The organizations will continue to address this issue on behalf of ranching families. We believe the DOJ is the appropriate agency to open an investigation and can also support the USDA in its investigation – allowing this process to be concluded in a timely manner.

This is of vital importance to the future of one of the largest sectors of U.S. agriculture. Both events continue the undue financial burden for all cattle producers within the production side of the beef cattle industry and in turn affect rural America short-term and long-term.

Check out the full letter at www.mtbeef.org/market-investigation.