YOUR TEXAS AGRICULTURE MINUTE
Investigating the beef and cattle price spread
By Gary Joiner
The U.S. Department of Agriculture (USDA) is investigating the beef and cattle price spread. Cattle ranchers requested the federal investigation, and Secretary of Agriculture Sonny Perdue agreed.
The USDA’s Agricultural Marketing Service is examining whether any regulated entities violated the Packers and Stockyards Act during recent disruptions. It’s looking to see if entities took advantage through price manipulation, collusion, restrictions of competition or other unfair practices.
USDA released an investigative report on July 22 that outlined the market conditions before, during and after the Kansas packing plant fire and the supply chain issues brought on by COVID-19.
What happened was wholesale beef prices skyrocketed, while the prices ranchers received for their cattle plummeted.
This report goes beyond analyzing the market reaction to these events. It examines other responses, including policy actions proposed by industry groups and steps Congress could take to allow USDA more leverage in conducting investigations and enforcing laws.
Improved price discovery, increased competition and a more transparent relationship between the prices for live cattle and resulting products are needed.
More details about the USDA investigation are forthcoming. The scrutiny of the markets is not concluded.
Should USDA find a violation of the Packers and Stockyards Act, it is authorized to report the violation to Department of Justice for prosecution.
We will see what comes of the investigation. At the end of the day, farmers and ranchers need a stable market for their cattle.
The preceding commentary is brought to you by Texas Farm Bureau, the “Voice of Texas Agriculture.” Called “Your Texas Agriculture Minute,” TFB will issue thought-provoking editorials each week—via print and audio—to spark understanding of agriculture in the Lone Star State and its impact on each and every Texan.
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