05.17.21

Hoeven Continues Efforts to Improve Pricing and Transparency for Cattle Producers

Senator Joins Bicameral Group in Urging DOJ to Continue Investigating Suspected Price Manipulation in the Cattle Market

WASHINGTON – Senator John Hoeven, Ranking Member of the Senate Agriculture Appropriations Committee and a member of the Senate Agriculture Committee, today joined Senators John Thune (R-S.D.) and Representative Dusty Johnson (R-S.D.) in urging Attorney General Merrick Garland to continue the U.S. Department of Justice (DOJ) investigation into the nation’s four biggest meatpackers. The DOJ began its inquiry into meatpacking companies last year, after Hoeven and his colleagues made the case to DOJ to investigate alleged price manipulation and anticompetitive behavior in the cattle industry.

“We pressed for this investigation to help improve transparency and competition in the cattle market,” said Hoeven. “The Biden administration should keep advancing this important effort. At the same time, we will continue working to prevent anticompetitive behavior and ensure our ranchers are treated fairly.”

Today’s letter comes as part of Hoeven’s ongoing efforts to increase market transparency and competition among meat packers. To this end, the senator recently helped introduce bipartisan legislation sponsored by Senators Chuck Grassley (R-Iowa) and Jon Tester (D-Mont.) that would require a minimum of 50 percent of a meat packer’s weekly volume of beef slaughter be purchased on the open or spot market.

In addition to Hoeven, Thune and Johnson, the letter sent today was signed by Senators John Barrasso (R-Wyo.), Kevin Cramer (R-N.D.), Steve Daines (R-Mont.), Joni Ernst (R-Iowa), Chuck Grassley (R-Iowa) and Cynthia Lummis (R-Wyo.), as well as Representatives Kelly Armstrong (R-N.D.), Randy Feenstra (R-Iowa), and Matt Rosendale (R-Mont.). The full text of the letter can be found below:

The Honorable Merrick Garland

Attorney General

U.S. Department of Justice

950 Pennsylvania Avenue, NW

Washington, DC 20250

Dear Attorney General Garland:

We want to bring to your attention our concerns with potential instances of improper and anticompetitive activities in the live cattle and beef industry. Nearly a year ago, on May 22, 2020, the U.S. Department of Justice (DOJ) Antitrust Division sent civil investigative demands (CIDs) to the nation’s four biggest meatpackers. Since that time, the American people have seen no public results from the investigation. In fact, there is no information to even suggest whether the investigation has concluded or is still ongoing. Due to the change in leadership at DOJ since these CIDs were issued and the new allegations of anticompetitive activities since that time, we encourage the Antitrust Division to continue its civil investigation of these entities. Additionally, to the extent allowed by statute, we request that DOJ provide Congress updates on any investigations or ongoing vigilance.

Cattle producers have faced significant challenges over the last few years. In 2019, a fire at a single beef plant in Kansas, a facility that accounted for approximately 6 percent of our nation’s beef processing capacity at the time, created significant market disruptions.  In 2020, the COVID-19 pandemic-related plant closures led to additional processing capacity shortfalls and supply chain disruptions throughout the country. It appears plant labor shortfalls remain an issue today. While black swan events do not always prove wrongdoing, additional attention can reinforce confidence in the system.

Cattle producers, especially small feeders, are again experiencing difficult conditions that are threatening their ability to stay in business. With a tight supply chain, any changes in processing capacity can have a dramatic impact on cattle prices, preventing producers from capturing margin from boxed beef rallies.

It is critically important that producers have fair and transparent markets for the commodities they produce. We urge the DOJ Antitrust Division to continue vigilance and where possible, provide updates of findings. 

Thank you for your prompt attention to this request.

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