Senators introduce resolution to investigate meatpacking plants

Sens. Mike Rounds (R-S.D.) and Elizabeth Warren (D-MA) introduced a bipartisan resolution on May 19, “Directing the Federal Trade Commission (FTC) to investigate and report on anti-competitive practices and violations of antitrust law in the beef packing industry.”

There is concern over the hold the big four meatpackers – Cargill, Tyson Foods, JBS Foods and National Beef – have on prices, and the resolution brings this issue to light.

“The bipartisan resolution introduced directs the FTC to examine the extent of anticompetitive practices and violations of antitrust law in the beef packing industry, and it sets a date for when the report is due,” says U.S. Cattlemen’s Association (USCA) Vice President Justin Tupper.

FTC Act of 1914

Senators are calling on the FTC Act of 1914 to investigate the meatpacking industry.

According to the USCA’s summary of the resolution, “The FTC Act of 1914 authorizes either the president or Congress to investigate and report the facts relating to any alleged violations of antitrust laws.”

President Biden utilized this law in November 2021, in order to investigate an oil-and-gas issue, but the last time Congress used the act to request an investigation was during the Great Depression era.

The summary states, “In the 1920s, Congress directed the FTC to investigate specific companies like American Tobacco, as well as entire markets such as the flour industry. In light of inflation and the corporate practices crushing American consumers, workers and small businesses, it’s time for Congress to get back in the game and use every tool to promote competition.” 

It continues to say, FTC will investigate “the extent of anticompetitive practices and violations of antitrust law in the beef packing industry, including price fixing, anticompetitive acquisitions, dominance of supply chains and monopolization; the monetary and other harms of anticompetitive practices and violations of antitrust law in the beef packing industry on consumers, ranchers, farmers, plant workers and small businesses; and recommendations for legislation or other remedial actions.”

FTC will be given one year to investigate the industry and report back to Congress with their findings, according to the resolution.

Financial hardships

The ranching community is facing record high inflation and input costs, along with possible price fixing and monopolization in the meatpacking industry. This is creating hardships for ranchers across the U.S., causing many to sell their ranches.

The resolution states, “Ranchers in the U.S. receive approximately 39 cents of every dollar a consumer spends on beef, compared to the 60 cents of every dollar they received 50 years ago. Each year since 1980, an average of nearly 17,000 cattle ranchers have gone out of business.”

While ranchers struggle, the big four meatpackers seem to continue benefiting.

The resolution says, “The top four beef packers increased their market share from 32 percent to 85 percent in the past three decades. The top four beef packers control roughly 85 percent of the beef supply to the wholesale market in the U.S.”

The gap in profit between ranchers and packers increased dramatically within only a few years.

According to the resolution, “Between 2015 and 2018, the difference between the cost of wholesale beef and the price paid to ranchers increased by 60 percent, while the top beef packers enjoyed record profits.”

Exposing issues

The resolution mentions, “Increased multinational agribusiness consolidation has put foreign firms in dominant positions within the U.S. beef packing industry. Increased consolidation in the beef packing industry has exposed vulnerabilities in the food supply system of the U.S.”

Consolidated lawsuits have been filed against the beef packing plants multiple times, “including that of a 10-year quality assurance officer at a top four beef packer who witnessed the cutback on slaughter numbers when fed cattle prices rose above a specific threshold,” states the resolution.

“Beef packing companies have paid millions of dollars to settle beef price-fixing claims in recent years,” according to the resolution.

Tupper is disappointed with previous investigations into the industry and feels this resolution is needed.

“We have not yet received the results of the Department of Justice’s investigation into the beef industry directed by former Secretary of Agriculture Sonny Perdue. This is completely unacceptable,” he says.

Tupper applauds the resolution, saying, “Sen. Rounds continues to be a champion for competition in the U.S. Senate.”

Kaitlyn Root is an editor for the Wyoming Livestock Roundup. Send comments on this article to roundup@wylr.net.