Earlier this week, the Department of Agriculture and Industries (ADAI) Commissioner Rick Pate explained the counterintuitiveness of low cattle prices as high retail beef prices are in effect.
Pate has been pushing for Alabama’s two U.S. Senators to back a proposal of a Department of Justice investigation into allegations of domestic meat-packing companies manipulating beef prices.
On Wednesday, U.S. Sen. Doug Jones (D-Mountain Brook) answered Pate’s call with a letter that was co-signed by Jones and a bipartisan group of 18 of his colleagues requesting U.S. Attorney General William Barr open an investigation into reports of potential anti-competitive activities in the highly concentrated beef-packing sector.
“The lack of competition in the meatpacking industry has resulted in a vulnerable beef supply chain, which the current national emergency has destabilized further,” the senators wrote. “Recent pricing discrepancies between fed cattle and boxed beef are pushing cattle producers and feeders to the brink, adding to the longstanding concerns stemming from the state of competition among beef packers. Since February, we have seen live cattle prices slump by more than 18 percent, while wholesale beef prices have increased by as much as 115 percent during the same period.”
Letter as follows:
Earlier this month, U.S. Rep. Robert Aderholt (R-Haleyville) and 24 of his congressional colleagues penned a letter to U.S. Secretary of Agriculture Sonny Perdue calling for similar scrutiny of the price imbalance.
“Beginning in the first few weeks of the crisis, cattlemen have seen prices drastically decline, with cattle futures falling 29% between the month of January and April, all-the-while beef prices increased on market shelves,” the letter said. “While we do recognize the complexity of the beef markets generally, the devastating effect this has had on many of our constituents in the last few weeks is clear. This is of great concern to us for a variety of reasons but chief among them being the doubt it casts on our markets as a whole. When market participants begin to believe that markets are not competitive or transparent that suspicion has a dangerous industry-wide ripple effect.”
Letter as follows:
Jones had made earlier gestures regarding the price discrepancy. Back in April, Jones also joined a letter to Perdue with three of his Democratic U.S. Senate colleagues asking for an investigation, and adding the issues were not new nor a result of the coronavirus pandemic.
“Evidence of price fixing is now even clearer as the nation reacts to the COVID-19 pandemic,” the April 23 letter said. “Yet again, as the demand for beef increases nationwide, live cattle futures are sinking. We are hearing from ranchers that it is not feasible to sell their cattle at such low futures and still hope to break even. In a time when Americans are consuming more beef than ever before, it is confounding that ranchers are struggling, while meat packers take home record profits.”
“Although allegations of pricing fixing in the cattle industry are reaching national prominence as a result of recent crises, these are not new issues. The industry is highly concentrated, as four meatpacking firms control 80 percent of the market,” it continued.
Letter as follows:
@Jeff_Poor is a graduate of Auburn University and the University of South Alabama, the editor of Breitbart TV, a columnist for Mobile’s Lagniappe Weekly and host of Huntsville’s “The Jeff Poor Show” from 2-5 p.m. on WVNN.
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