VIDEO: Trey Wasserburger, “The DOJ’s investigation into the big four beef packers is the industry’s only hope.”

by | Oct 14, 2020 | 0 comments

Photo Credit: TD Ranch at Rishel Angus, https://www.facebook.com/RishelAngus

Interview Part 2 of 2


Click here to listen to Part 1 of this interview


 

Q: What are your thoughts regarding the DOJ investigation into the four big beef processors? 

The DOJ’s investigation is the only hope we have to fix the issues in the cattle industry. They have the power to indict antitrust, price fixing and collusion and they’ll do it if they find applicable evidence. We’ve never had a full-fledged investigation of the packers until now. Consumers and producers need to get behind this investigation, along with the organizations that represent the cattle industry. 

 

Q: Do you think the organizations that represent the cattle industry have the ability to get on the same page and fight for similar goals? 

As an industry, we’re facing an unprecedented situation where we can’t get fat cattle killed, and our own organizations can’t get behind a common goal of protecting the producer. For some reason we can’t share ideas amongst each other and get along.  

 

Q: We continue to see packers make generous profits while feeders continue to experience substantial losses. What are your thoughts on this equation? 

The current scoreboard in the cattle industry is incredibly lopsided. Packers are killing as many cattle as possible making $200-$400/hd. Keep in mind, this is the number they’re reporting, there is a good chance they’re actually making more but not reporting it accurately. While the packers are making these profits, cattle feeders are selling in a ten-year low; it’s clear that there is something fundamentally wrong within the industry. 

 

Q: Agri Stats, Inc. is a data-sharing firm tied up in lawsuits in both the pork and poultry industries. Can you elaborate on this situation and how it relates to the DOJ investigation in the cattle industry? 

Agri Stats is a tiny office in the middle of Illinois where data scientists are collecting data in real time from all over the country in both the swine and poultry industries. The major packers are paying Agri Stats for this information. This is the first time I’ve found that there is actual collusion on paper that can be proven. 

Ranchers across America would never provide information to a third party company that detailed their operations because they believe in competition. Cattle feeders are the same way, they rarely work together because of that strong sense of competition. The hog and chicken industries are completely different with very little competition because all this information is being shared. 

The most difficult thing with the DOJ investigation into the four big beef packers is finding feeders willing to come forward with evidence of collusion or price fixing; cattle feeders are scared of packer retaliation. The DOJ is looking for these instances of price fixing and collusion and they’re offering anonymity to those who are willing to come forward, but packers have raw power to black ball cattle feeders overnight and that keeps them silent.  

 

Q: What do you see happening to the American cattle producer if substantial changes aren’t made to achieve fair cattle markets? 

Do I want my son to join a monopolistic industry where we can’t get a fair market? I don’t, and that’s why we’re having this discussion today. If you backtrack forty years, this has been a snowball affect of more packer concentration, little to no competition, more formula and captive supply cattle, eroding cash cattle trade and its only going to get worse unless we do something.  

The plant fire and covid-19 pandemic highlighted the already existing problem. We as an industry need to come together and get behind a common goal; the time is now to do something. 

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How did we get here?

From the Holcomb Tyson fire to COVID-19;
Click to see a timeline of events that have brought to light the profit and pricing disparity in cattle markets.

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