States Ask U.S. Department Of Justice To Investigate Meat Packing Companies

May 6, 2020

Montana Attorney General Tim Fox and attorneys general from other ranching states are asking the U.S. Department of Justice to launch an antitrust investigation of the beef processing industry.

In a letter to U.S. Attorney General William Barr, the states request a investigation to determine if the companies have entered into agreements that deprive consumers and cattle ranchers of a competitive market.

The letter was also signed by Attorneys General from North Dakota, South Dakota, Wyoming, Colorado, Missouri, Arizona, Idaho, Iowa, Minnesota, and Nebraska.

“Consolidation in the meat packing industry has certainly benefited those companies, but has brought no benefit to ranchers and consumers,” Attorney General Fox said. “The nationwide cattle market is sending signals of manipulation and artificial distortion, and so we are asking Attorney General Barr to investigate possible violations of federal antitrust laws.”

Excerpts from the letter:

“The U.S. beef processing market is highly concentrated, with the four largest beef processors controlling 80 percent of U.S. beef processing. In this highly concentrated industry, meat packers have achieved sizeable profit margins. Cattle ranchers, however, who for generations have supplied our nation’s beef, are squeezed and often struggle to survive. Consumers, moreover, do not realize the benefits from a competitive market.”

“…The disparity between the price of live weight cattle and the retail cost of boxed beef sold to consumers is a sign of a market that lacks full and fair competition. Consider, for example, that live cattle futures recently hit 18-year lows, while both the price of boxed beef and consumer demand remain healthy, especially as consumers navigate these unprecedented times.”

Montana Stockgrowers Association President Fred Wacker welcomed the action.

“Determining evidence of any fraudulent business practices within the meatpacking industry is vital to our producers’ continuity of business and needs to be identified quickly and rectified immediately,” said Wacker. “MSGA would like to thank Montana Attorney General Tim Fox for his involvement in this issue.”

Montana Farm Bureau President Hans McPherson also appreciated the request.

“Montana Farm Bureau appreciates Attorney General Fox elevating this conversation,” McPherson said. “It is important that Montana ranchers have transparency in the markets in order to receive a fair price for their cattle.”

The letter is available online here.

Source: Montana Department of Justice