The Nebraska Farm Bureau (NEFB) has urged Attorney General William Barr to probe the possibility that meat packers are illegally manipulating prices in U.S. cattle markets amid the CCP virus pandemic.
The largest farm organization in the state asked the Department of Justice (DOJ) to launch a “full investigation” in a letter (pdf) addressed to Barr on April 14. It stated that an investigation would ensure the cattle meat packing industry is in compliance with the federal antitrust laws targeted to maintaining a competitive marketplace.
Stephen Nelson, NEFB president, expressed concerns over the “alarming” price disparities faced by cattle producers in the United States amid the CCP virus outbreak and following the closure of the Tyson Foods plant in Holcomb, Kansas.
“America’s cattle producers have seen sharp declines in market prices and large margin increases for the meat packing sector,” he wrote. “Now is the time for the DOJ to fully examine the situation and fully prosecute any wrongdoing.”
The NEFB said price disparity and volatility is “critically frustrating” for American cattle producers who have seen prices for their produce “falling off a cliff” while store shelves across the United States were less than fully stocked and demand at food banks outpaces supplies.
“We cannot afford to lose confidence in the integrity of the futures market nor the price discovery efforts in cash markets, on top of the many other market disruptions and stresses farmers and ranchers are facing,” he said.
“A full DOJ investigation in partnership with the recently expanded investigation already occurring at the U.S. Department of Agriculture (USDA) would help ensure laws are being followed and help restore confidence in marketing institutions.”
USDA Secretary Sonny Perdue on April 8 announced the department would probe a surge in meatpackers’ margins for beef amid the outbreak of the CCP virus.
It followed calls from U.S. senators for investigations of record profit margins for meat companies like Tyson Food and Cargill that dominate U.S. beef processing, after ranchers complained that surging meat prices due to CCP virus hoarding weren’t translating into higher cattle prices.
Beef is flying off grocery shelves but farmers are seeing prices go down If packers are illegally manipulating markets during crisis we need USDA & DOJ & CFTC to investigate + help farmers. 4 companies control 80% of market &theyre taking advantage
— ChuckGrassley (@ChuckGrassley) March 27, 2020
On March 27, Sen. Charles Grassley (R-Iowa) wrote on Twitter that USDA, DOJ, and Commodity Futures Trading Commission probes may be needed to determine why ranchers didn’t benefit from soaring meat demand.
“Beef is flying off grocery shelves but farmers are seeing prices go down,” Grassley wrote. “If packers are illegally manipulating markets during crisis we need USDA & DOJ & CFTC to investigate + help farmers.” He noted that four companies, which control 80 percent of the market, are taking advantage of the situation.
“During these uncertain times, it is important that our nation’s food producers have confidence in the marketplace knowing that our nation’s laws are being properly followed and enforced,” Nelson said.
Reuters contributed to this report.