Current Cattle Market Daily Headlines for Wednesday, October 21, 2020

by | Oct 21, 2020 | 0 comments

Federal judge won’t dismiss pork price-fixing suit

  • Judge John R. Tunheim of the U.S. District Court of Minnesota has denied a request by pork processors to dismiss a lawsuit accusing them of fixing prices.
    • Judge Tunheim ruled that amended complaints by the plaintiffs “adequately pleaded a continuing violation” of price manipulation. These amended complaints were enough for Judge Tunheim to deny the defendants request for dismissal.
  • The defendants include: Agri Stats, Celemens, Hormel, JBS USA, Seaboard, Smithfield Foods, Triumph and Tyson Foods in a consolidation of three class-action filings alleging illegal price fixing of pork since at least 2009.
  • The plaintiff’s first complaint was dismissed without prejudice in August 2019. They then filed a second amended complaint last year.
  • When the pandemic hit, the plaintiffs argued that President Trump’s executive order to keep meat plants open supported their claim that small changes in production output often result in a severe disruption of protein supplies throughout the market.


Trump’s payments to farmers hit all-time high ahead of election

  • Government subsidies are expected to make up more than a third of farm income this year. Those aid programs may be key to President Trump’s success in swing states such as Wisconsin, Ohio, Iowa and Minnesota.
    • In 2016, farmers overwhelming voted for President Trump.
  • Since Trump took office, government payments ranging from crop insurance payments to new programs compensating farmers for lost sales during the U.S.-China trade war have risen every year.
  • In 2018, farmers pleaded with Trump for “trade not aid,” but have since received repeated bailouts while millions of other Americans continue to wait for their Covid-19 stimulus that has stalled out in Congress.
  • Just this year, federal payments are expected to reach a record $51.2 billion. The government will make up 39.7 percent of farmers’ net cash income this year, the largest percentage seen in 20 years.
  • According to the Environmental Working Group, a health and environmental advocacy group, the Covid-19 relief program put together for farmers and ranchers was “old-fashioned vote buying.” The group claims the relief funds were not sent to groups truly at risk.
    • But according to Secretary Sonny Perdue, the USDA talked to farmers and ranchers when designing the relief program to best accommodate their losses.


Representative Hartzler introduces Cattle Market Transparency Act

  • Last week, Representative Vicky Hartzler (R., Mo.) introduced the Cattle Market Transparency Act of 2020; a bill that will serve as a companion bill to Senator Fischer’s (R., NE) bill that she recently introduced to improve price discovery and transparency within the cattle market.
  • This legislation includes the same details as Fischer’s bill:
    • Directs the USDA to create and maintain a library of marketing contracts between packers and producers.
    • Mandates that a packer report the number of cattle scheduled to be delivered for slaughter each day for the next 14 days.
    • Bolsters the public availability of data collected through the Livestock Mandatory Price Reporting Act.
    • Requires the Secretary of Agriculture to establish regionally sufficient levels of negotiated cash trade and to consider stakeholder input through a public comment period.
  • According to Missouri Cattlemen’s Association President, Marvin Dieckman, Hartzler’s legislation will work to achieve robust price discovery and market transparency through a methodical approach, rather than a one-size fits all, heavy handed approach.


Boxed beef prices

  • Choice boxed beef: $210.60 (+0.86)
  • Select boxed beef: $191.67 (-0.17)


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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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