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NCBA, Sen. Deb Fischer call for investigation

Updated: Trump administration will investigate potential anticompetitive behavior in beef packing industry.

Compiled by staff

April 9, 2020

3 Min Read

Updated 7:08 a.m. April 9

The Trump administration responded quickly to letters from the National Cattlemen's Beef Association and Sen. Deb Fischer to look into potential anticompetitive behavior in the beef packing industry.

“I would like to thank President Donald Trump and Agriculture Secretary Sonny Perdue for their quick response to NCBA’s request to expand the agency’s investigation into cattle markets," said NCBA President Marty Smith. "Secretary Perdue’s decision to examine market reactions surrounding the Holcomb fire and the spread of COVID-19 in the United States will help restore the confidence of cattle producers in the market. We also look forward to the agency’s recommendations about improvements the industry can make to its markets, improvements that will ensure we have the fair and functioning markets that are so vital to cattle producers.”

NCBA President Marty Smith sent a letter to President Donald Trump, requesting the government investigate the disparity between boxed beef prices and cattle prices in the futures and cash markets during the COVID-19 pandemic and following the packing plant fire in Holcomb, Kan., last August. 

In his letter, Smith requests President Trump to direct USDA to expand the ongoing investigation into market activity after the Holcomb fire to include current market volatility, “in the hope of identifying whether inappropriate influence occurred in the markets, and to provide our industry with recommendations on how we can update cattle markets to ensure they are equipped to function within today’s market realities.”

The letter also requests the Commodity Futures Trading Commission to study the influence of speculators on live and feeder cattle futures contracts to determine whether these contracts remain a useful risk-management tool for cattle producers. 

“Fair and functioning cattle markets are vital to the sustainability of our industry,” Smith wrote.  He also pointed out the importance of keeping the beef supply chain moving during this time of volatility and instability. 

“The market woes for cattle producers will only grow if packing plants shut down or slow down for an extended period,” Smith stated. “As cattle producers, we are the beginning of the beef supply chain, and we need continued vigilance and oversight of all cattle market participants – for the benefit of America’s cattle producers and all Americans.”

Fischer, Nebraska's senior senator, said she's heard concerns from constituents about the impact COVID-19 is having on their cattle operations.

"Americans are purchasing more beef products at grocery stores, which is resulting in another round of windfall profits for meatpackers," said Fischer, a Republican. "Meanwhile, producers are taking price losses that threaten the viability of their businesses."

In response, Fischer wrote a letter to Senate Judiciary Antitrust Subcommittee leaders calling for a public hearing to examine claims of price manipulation, collusion, restriction of competition, price gouging or other unfair practices within the current beef meatpacking industry structure.

Fischer also wrote to Agriculture Secretary Sonny Perdue, requesting USDA expand its investigation of beef pricing margins to include recent market impacts as a result of COVID-19. The investigation was launched following the Holcomb, Kansas, beef processing facility fire.

Beef futures prices have declined more than 30% since the beginning of the year, according to the American Farm Bureau Federation.

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