Wyoming senator seeks investigation into meat packers

Published on April 11, 2020

Sen. Ogden Driskill (R-WY) of Devil’s Tower is seeking a federal investigation into the four major meat packers as the packers appear to be violating laws set out by the Packers and Stockyards Act. 

            “It is pretty clear there is a pattern of the packers taking advantage of market crisis to create windfalls for themselves,” Driskill says. “The first evident case was following the 2019 fire at a Tyson Fresh Meats plant in Kansas.” 

            He continues, “We instantly saw spikes in the futures and cash markets, yet plants decreased prices on cattle and didn’t cut any actual slaughter numbers. Packer profits went from $150 per head to nearly $600 per head and the exact same thing is happening with the COVID-19 pandemic.” 

            “As this pandemic continues, we are seeing the highest retail beef prices in history,” Driskill notes. “At the same time, the packers have reduced bids for cattle coming off the feedlot. They have the money, the demand for beef is there, and yet, they haven’t moved any profits back down the supply chain to producers and feed yards.” 

            “The Packers and Stockyards Act was created to protect producers from this very scenario. The federal government didn’t want the entire market to be controlled by a handful of large companies,” he explains. “We now have four large conglomerates controlling 80 percent of the slaughter capacity in the U.S., two of which are foreign owned.”

            “It is clear the Packers and Stockyards Act hasn’t been taken seriously by those in leadership as large segments of the beef industry are controlled by conglomerates,” he stresses.

Goals 

            “I think the end game, if this investigation is done and done correctly, is these monopolies will be broken up,” he says. “The federal government has broken up monopolies in the past in other industries, one of the largest being AT&T.” 

            “We believe in free enterprise until it becomes abusive to suppliers and consumers,” Driskill says. 

            Driskill notes another big concern with only a handful of packers controlling a majority of the beef supply is food security. 

            “Something we haven’t really talked about much is the threat of disease in these plants,” he explains. “What happens if even one of these massive kill plants goes offline due to a food safety issue? It would absolutely kill the supply chain for beef.” 

            “The price gouging is clear,” Driskill says. “When we look back at 2015 – when beef prices were as high as they’ve ever been for cow/calf producers – we were getting up to $1,600 per head for a 600-pound steer. Right now, the packers are paying 50 percent less.” 

            Driskill continues, “We are in a hostage situation because there are only four buyers for our products and those four have managed to keep prices paid to beef producers at or below cost of production.”

            “This has been a major issue for nearly a decade and we are in dire danger of losing the cow/calf sector on the family farm,” Driskill stresses. “The manner in which the U.S. produces beef is critical to our food safety.” 

            He continues, “It is imperative for consumers and sellers to maintain a system where the entire supply chain sees fair pricing.” 

            “The strangest part of this entire system is cow/calf producers retain ownership of these cattle the longest, assume a majority of the risk and all of the death loss,” he explains. “Then they go to the feed yard for 180 days or so and the feed yard assumes the risk.”

            “Within 72 hours of the cattle being slaughtered they are on a store shelf unless the product is aged,” he says. “The only risk packers and retailers assume is a recall, yet they have significantly higher margins than producers and feed yard operators.” 

            “Packers continue to collect their profits with little to no flow back down the supply chain,” he says. “Just last week, JBS gave their employees over $60 million in bonuses with no thought to how much money their suppliers were losing. The profit per head for packers is up to $600 while feed yards and producers are losing up to $400 per head and struggling to stay afloat.” 

            Callie Hanson is the managing editor of the Wyoming Livestock Roundup. Send comments on this article to roundup@wylr.net.