The Government Is Reportedly Conducting An Investigation Into Rising Beef Prices
The United States Department of Agriculture and the Department of Justice are both investigating the source of rising beef prices and shortages amid the COVID-19 pandemic, Politico reported.
The DOJ is reportedly looking into the so-called "Big Four" of meat packing plants—Tyson Foods, JBS, National Beef, and Cargill—none of whom responded to Politico's request for comment. Agriculture Secretary Sonny Perdue confirmed to the outlet that the USDA was investigating beef prices.
The piece detailed the complications that the industry as a whole is facing, as farmers say they have lowered prices and have an influx of cattle ready for slaughter, meat processing plants are closing or open with reduced workers, and grocery stores say they are preparing for, or have already seen the effects of, a meat shortage and increased prices.
“It’s evidence that something isn’t right in the industry,” said Senator Chuck Grassley, (R-IA) who, along with other lawmakers, has called for federal investigations into "market manipulation and unfair practices within the cattle industry."
The piece detailed how the beef industry is a delicate ecosystem. Cattle need to be sold within two weeks of reaching their optimal weight and if they aren't, farmers may soon be forced to kill them or sell them for a lower price. But if there aren't that many plants around (many states only have one or two plants at their disposal) and they are running at lower capacities because of the pandemic, they won't be able to process as much, and consumers will see higher prices and shortages.
In the piece, experts also discuss how mergers have condensed the meat market since an antitrust settlement 100 years ago, when the industry was largely controlled by five different plants. Today it's dominated by those aforementioned four, something experts in the Politico article pointed out could also be discussed in any investigation.
“This is 100 percent a symptom of consolidation,” said Christopher Leonard, author of The Meat Racket, told Bloomberg in a previous report. “We don’t have a crisis of supply right now. We have a crisis in processing. And the virus is exposing the profound fragility that comes with this kind of consolidation.”
You Might Also Like
