Leaders of the nation’s largest beef packers denied accusations Wednesday that they had any agreement in place to suppress prices or competition for beef cattle throughout the country.
The statements came at a Wednesday hearing of the House Ag Committee, where CEOs of the so-called “big four” meatpackers, Cargill, JBS, National Beef and Tyson, provided testimony. The answers also followed a reminder from House Ag Committee Chair David Scott, D-Ga., that the CEOs were under oath, an unusual step for the panel.
Instead, the leaders attributed the price disparities between packers and producers to market factors like inflation and the swings of cattle inventory against a stagnant amount of processing capacity. But Scott was unimpressed by the explanations and presented data showing an increase in the margin of prices paid to processors compared to prices paid to ranchers.
“Each of you have said no, and you all deny that you acted improperly or illegally, but none of you have been able to explain this meat margin chart and why your shares kept rising since 2015,” Scott said.
Scott later closed the hearing by saying he was working on legislation “to correct these market imbalances, reduce the overconcentration of consolidation and anticompetitive market behavior, and determine where there is any antitrust behavior … to help you all erase this blot off your record."
“You said it’s not true, we need to be sure we have the public’s confidence that it’s not true,” Scott said.
The CEOs also pushed back against accusations that the ownership structure of the nation’s beef packers was to blame for rises in food prices, a claim the White House has reiterated in several public forums including President Joe Biden’s State of the Union address.
“Experts, policymakers, government regulators agree; the combination of supply, consumer demand, pandemic disruptions and geopolitical unrest is reason enough for the inflation,” Tyson CEO Donnie King said.
The CEO panel followed another panel of rancher voices on the matter which underscored the disparate views of many cattle producers across the country on the subject.
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Coy Young, a cow-calf producer from Missouri, was the most pointed in his comments and called for stronger oversight over the nation’s packers.
“American cattle farmers and ranchers are tired. Tired of being taken advantage of and losing money year after year while watching the big four post record profits every single quarter,” he said.
Coy labeled alternative marketing agreements “legalized market manipulation practices that should not be allowed” and said there’s “blood on the hands of the packers and leaders in Washington” due to an increase in producer suicides and a failure to enforce the existing language of the Packers and Stockyards Act.
But Don Schiefelbein, president of the National Cattlemen’s Beef Association, urged Congress to hold off on any legislative changes under consideration until the conclusion of a Department of Justice investigation reportedly looking into the practices of the nation’s packing sector.
“Before attempting to fix a problem, we must know if things went awry, if so then whether or not it was illegal, and if it was unlawful, how to prevent it from happening again,” he said in his written testimony. “It is essential that DOJ conclude their investigation and report their findings to the public in order to ascertain this information.”
Schiefelbein argued inflation, input costs and other market factors are “the true immediate needs of cattle producers” and urged Congress not to forget about those concerns as it studied broader cattle pricing issues.
The hearing followed a Senate gathering Tuesday to explore legislation that would mandate certain amounts of cash trade for cattle in different regions throughout the country. NCBA has expressed opposition to that legislation, citing its concern with government mandates and their role in the marketplace. The National Farmers Union and U.S. Cattlemen’s Association support the bill.
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