Current Cattle Market Daily Headlines for Monday, June 8, 2020

by | Jun 8, 2020 | 0 comments

 

Meat-Pricing Probe Expands to Beef, Pork

Wall Street Journal, Saturday edition

  • The Justice Department is deepening its probe into federal antitrust scrutiny of the $213 billion U.S. meat industry.
  • The DOJ has issued subpoenas to the four biggest beef processors; JBS USA Holdings Inc., Tyson Foods Inc., Cargill Inc., and National Beef Packing Co.
  • Besides having their beef processing investigated, JBS and Tyson are also having their pork processing activities looked into.
  • Last Thursday, a call was held with DOJ officials and several state attorneys general to discuss their shared concerns about competition in the meat processing industry.
  • Cattle producers made their concerns heard regarding price fixing after the Tyson plant fire last fall. This event caused a sharp drop in cattle prices while wholesale beef prices for meatpackers increased. USDA claimed to have launched an investigation into this price disparity, however nothing has come from that investigation.
  • When Covid-19 began to spread across America in March, consumers stocked up on beef, packing plants were forced to shut down due to coronavirus outbreaks among workers, and cattle prices tumbled while prices for processed beef sky rocketed.
  • From March to the end of May, the value of processed beef carcasses jumped 76% according to the USDA.
  • In response to these allegations, meat processors claim economic forces are driving beef prices higher and cattle futures lower.

 

Department of Justice issues subpoenas to big four meatpackers

https://www.tsln.com/news/asking-the-right-questions/

  • Hermosa, SD rancher Rick Fox is cautiously optimistic that this DOJ investigation will produce something worthwhile.
  • “We get our hopes up so many times. I really hope something happens this time,” said Fox.
  • He went on to explain that ranchers and feeders may be losing their trust in government agencies after the investigation into the Holcomb, KS Tyson plant fire back in August of 2019 didn’t yield any results.
  • The anti-trust activity among the four big packers that control about 80% of the processing in the beef industry is blatant, according to Fox. The packers need to be broken up so as to limit their influence over the market.
  • Boxed beef prices have more than doubled in the past two months, while live cattle prices dropped by 20% or more. Even worse, many feeders weren’t able to obtain bids on their cattle, forcing them to feed cattle past their optimum point. Due to this, cattle have lost value while feeders’ costs have increased.
  • While the cattle industry awaits more news about the DOJ investigation, the R-Calf lawsuit alleging packer anti-trust behavior will have a hearing today, June 8th. The purpose of this hearing is for the judge to meet with both the defendants and the plaintiffs to determine whether or not to grant the packers their “motion to dismiss.”

 

Nebraska has funds for livestock producers

https://www.tsln.com/news/nebraska-has-100-million-for-livestock-producers/

  • On May 27th, Nebraska Governor Pete Ricketts declared that small grants would be available for livestock producers through the CARES act passed by Congress earlier this year.
  • These funds will be available for beef, pork, poultry, dairy and sheep/goat producers with between one and ten employees “that have closed or sustained a loss of revenue or employment since March 13, 2020.
  • Each producer is eligible for $12,000.
  • The grant, which will not be required to be repaid, can be used as working capital to pay for operating expenses, with the goal of helping producers through the rough economic times.
  • Signup for the grant begins on June 15th.

 

Boxed beef continues to fall

www.nationalbeefwire.com

  • Choice boxed beef: $261.48 (-10.78)
  • Select boxed beef: $246.42 (-13.39)
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From the Holcomb Tyson fire to COVID-19;
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