A bipartisan cast of lawmakers raised the possibility that major meatpacking companies are engaged in price-fixing and are calling on the Justice Department to investigate.
More than two dozen Republicans and Democrats in the House and Senate signed a letter to Attorney General Merrick Garland that asked his department to take “decisive action.” They contend that “the anticompetitive practices occurring in the industry today are unambiguous.”
The letter, which was led by Republican Sen. Mike Rounds of South Dakota and Democratic Sen. Tina Smith of Minnesota, points out that four large companies, two of which are foreign-owned, control 80% of the meatpacking industry “and are seemingly able to control prices at their will, or even defy expectations of market fundamentals.”
The lawmakers said that over the past several years, the price of live cattle in the U.S. market has fallen while the price of boxed beef has greatly increased, a disconnect that has resulted in higher costs at the grocery store for consumers. They said that the meatpacking companies reaped the rewards of the price difference while independent cattle producers and consumers were hurt.
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“These persistent irregularities reveal an unfairness in the producer-meatpacker relationship and possibly anticompetitive behavior in the beef industry,” the lawmakers told the Justice Department.
The letter invokes the Packers and Stockyards Act of 1921, which was designed to ensure fair practices and to rein in and regulate the industry. The lawmakers said that exactly a century later, the meatpacking industry is more consolidated than back when the act was signed into law. The four largest companies now operate 18 of the country’s 20 largest slaughter facilities, constituting 94% of its capacity, according to the letter.
“In our opinion, that concentration has caused a market disconnect, resulting in tangible market manipulation that has economically disadvantaged American ranchers and ultimately, American consumers who want to buy U.S. beef at an affordable price,” the letter reads.
They told Garland that arguably every single piece of legislation related to beef passed by Congress has been an attempt to remedy the real issue at hand, which they claim is meatpacker concentration. They conclude that either Congress’s antitrust laws are not being enforced or they are not capable of dealing with “the apparent oligopoly that so plainly exists.”
“Our American ranchers work hard every day to produce the best beef in the world. They battle the wind, the rain, the snow and the sun. They shouldn’t have to battle a problem their government has an obligation to fix,” they wrote. “The time has come to either enforce or examine our antitrust laws to restore fairness to the marketplace. American producers and consumers depend on us.”
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In addition to Rounds and Smith, other signatories include GOP Sens. Chuck Grassley of Iowa, Cynthia Lummis of Wyoming, Josh Hawley of Missouri, and Democratic Sens. Ron Wyden of Oregon, Cory Booker of New Jersey, and Mark Kelly of Arizona. Several other Republican and Democratic senators and representatives also joined the missive.
