Officials say the meatpacking industry has had problems for years–and it’s problems are only getting worse with coronavirus.
Attorneys general from 11 states are asking the Justice Department to investigate the meatpacking industry’s market control.
In a letter sent to U.S. Attorney General William Barr, the state attorneys general stressed how uncompetitive the beef processing market is: its four largest players control nearly 80% of the market nationwide.
The market’s high concentration, says The Associated Press, has state attorneys general fearful that processors will manipulate prices to profit atop the coronavirus outbreak.
“Give the concentrated market structure of the beef industry, it may be particularly susceptible to market manipulation, particularly during times of food insecurity, such as the current COVID-19 crisis,” the attorneys general wrote.
The letter, says the Associated Press, doesn’t list the processors by name. However, the A.P. notes that the nation’s four largest beef-packers are Tyson Foods, JBS, Cargill, and National Beef.
Some advocates within the industry say they’ve wanted better antitrust enforcement for years. However, coronavirus has only compounded existing problems.
“They’re posting record profits, while ranchers are suffering significant market price losses,” said Mark Watne, president of the North Dakota Farmers Union. “The situation definitely smells rotten, and it not only hurts ranchers, but consumers, too.”
Building off observations like Watne’s, the state attorneys general noted disparities between the price of live cattle and the price of boxed beef sold to U.S. consumers. Live cattle prices, adds The Associated Press, recently hit an 18-year low—yet the price Americans pay for supermarket beef hasn’t dropped in response to lower processing costs.
The stark difference in price, say the attorneys general, is suggestive of market manipulation and a dearth of competition. They’ve asked Barr to collaborate in an intensive investigation that looks at practices outside the duration of the coronavirus pandemic, too.
“Antitrust concerns about the cattle market are nothing new,” the attorneys general wrote. “Competition issues arising from agricultural markets existed long before the COVID-19 pandemic and will persist long after we defeat the current crisis.”
The letter, says The Associated Press, was signed by attorneys general from Arizona, Colorado, Idaho, Iowa, Minnesota, Missouri, Montana, Nebraska, North Dakota, South Dakota, and Wyoming. It was sent several days after several Midwestern lawmakers sent similar prompts to the Federal Trade Commission.
At the end of April, U.S. Sens. Tammy Baldwin (D-WI) and Josh Hawley (R-MO) asked the FTC to open an investigation into pork processors and other meatpacking companies.
“The domination of a select few companies in the American meatpacking industry is cause for serious concern,” they wrote, noting that the United States’ four largest pork processors—Tyson, Cargill, JBS S.A., and Smithfield—control 65% of the nation’s supply.
The senators said coronavirus outbreaks have forced three processing plants to temporarily close down. Alarmingly, the closure of those three plants has resulted “in the shutdown of a staggering 15 percent of America’s pork production.”
“As a result, farmers cannot process their livestock—which are costly to maintain—and consumers risk seeing shortages at grocery stores, exacerbating the food insecurity that all too many Americans are currently experiencing,” the senators wrote. “These harms might have been mitigated if the meatpacking industry was less concentrated. The current COVID-19 crisis has exposed the vulnerabilities of American supply chains and the importance of ensuring that, when disaster strikes, America’s food supplies are not in the hands of a few, mostly foreign-based firms.”