Current Cattle Markets Daily Headlines: Friday, May 8, 2020

Mackenzie Johnston

6 years ago

President Trump to Department of Justice: Investigate Meatpackers

Yesterday, President Trump asked the Department of Justice to investigate meatpacker pricing activity.
“I’ve asked the Justice Department to look into it. … I’ve asked them to take a very serious look into it, because it shouldn’t be happening that way and we want to protect our farmers,” the president said at a White House event.
All three national cattle and beef organizations, along with 23 state cattle organizations, many senators and others have asked that the DOJ help the USDA with the investigation they were already planning to conduct.
USDA has been investigating meatpacker pricing activity since last fall when the cattle markets took a nose dive following the Holcomb, KS Tyson meat plant fire in August.
Since Covid-19 has hit, boxed beef prices have more than doubled, while live cattle prices have fallen about 20%. These two instances have caused a massive gap between cattle producer and packer profit margins. This large gap has raised concern about possible price manipulations and other unfair practices within the beef industry.
The cattle industry is in dire need of some answers in a time when cattle markets are threatening to take many producers out of the industry.

Smithfield Foods will take a phased approach to resume its operations. The harvest floor will reopen on May 11^th and if everything goes as planned, the facility will be fully operational by late May.
The facility has been closed for three weeks now. It is one of the largest pork processing facilities in the country, representing 4%-5% of the US pork production. The plant employs 3,700 people.
The State of South Dakota is offering testing for the Coronavirus to all employees before returning back to work.

“Right now, we are seeing great prices for the packers. I understand that markets cycle up and down but when you have such a discrepancy in prices compared to the family farmer working on his ranch to produce that critter which is going to end up as a good steak, that needs to be looked into…We want to make sure we have a supply chain that works well for all participants—and we also want to make sure we have good protein on our shelves,” said Senator Fischer during the interview.
Senator Fischer was then asked, “Where do you think this investigation will end up? And what do we face as a country as far as the availability of meat on our shelves?” “The supply chain is working, we don’t want to see beef turn into a situation like toilet paper faced earlier during this pandemic,” said Senator Fischer.
Senator Fischer went on to say that we need some transparency within our processing sector and we need answers to know what is truly happening for the packer margins to be through the roof and at the same time, cattle producers are facing record lows.