Attorneys general urge federal investigation into meatpackers
Top law enforcement officials from 11 states asked U.S. Attorney General William Barr to investigate potential anticompetitive practices.
Attorneys general from 11 states have joined the chorus of officials urging the federal Department of Justice to investigate "market concentration and potential anticompetitive practices by the meat packers in the cattle industry."
In a May 5 letter to Attorney General William Bar, attorneys general from North Dakota, Colorado, Missouri, Montana, Arizona, Idaho, Iowa, Minnesota, Nebraska, South Dakota and Wyoming, asked the DOJ to "lead a thorough examination of the competitive dynamics of this industry."
"Consider, for example, that live cattle futures recently hit 18-year lows, while the price of boxed beef and consumer demand remain healthy, especially as consumers navigate these unprecedented times," the letter said.
Companies found guilty of violating antitrust laws could face massive fines.
The attorneys general join members of Congress and farm groups from across the country in asking for investigations into the practices of meat packers who have been accused of national price fixing. Sen. John Thune, R-S.D., Sen. Jon Tester, D-Mont., Sen. Chuck Grassley, R-Iowa, and others have made similar requests. State cattle organizations from Iowa, South Dakota, North Dakota, Minnesota and Montana sent a letter to Barr on April 20.
In their letter to Barr, the attorneys general pointed out that the four largest meat packing companies — Tyson Foods, JBS, Cargill and National Beef — control more than 80% of the beef processing in the United States. Consumer prices for beef during the coronavirus pandemic have been exceptionally high while cattle prices continue to decline. The attorneys general say the pricing margins are signs that meat packers are taking advantage of the situation in a way that could violate the federal antitrust law.
While cattle producers have raised concerns about potential harm, the attorneys general say consumers also may be being hurt by the alleged price fixing.
“We are specifically asking the Department of Justice to lead a thorough examination of the competitive dynamics of this industry. Now, more than ever, we need to dedicate our collective resources to promote competition and protect consumers," said North Dakota Attorney General Wayne Stenehjem in a statement.
The letter said that even if, after an investigation, no enforcement actions are warranted, the attorneys general would suggest that "regulatory strategies should be explored to promote competition, address market manipulation, and protect consumers."
This is not the first time the cattle industry has raised concerns about market manipulation by meat packers. An Aug. 9, 2019, fire at the Tyson plant in Holcomb, Kan., which also tanked cattle prices while sending beef prices higher, led to the U.S. Department of Agriculture starting an investigation, which has been expanded to include investigation of the market conditions during the pandemic. Secretary of Agriculture Sonny Perdue, during an April call with reporters, said that while he could not update progress on the investigation, he remained concerned about the situation and was considering starting a task force on the matter.