Rounds, Smith Launch Nationwide Effort to Protect Consumers and Cattlemen

WASHINGTON – U.S. Senators Mike Rounds (R-S.D.) and Tina Smith (D-Minn.) today launched a nationwide effort to protect consumers and cattlemen from anticompetitive practices in the beef processing market.

The senators are inviting Members of Congress to join their open letter requesting the Department of Justice (DOJ) examine whether the control large meatpackers have over the beef processing market violates U.S. antitrust laws and principles of fair competition. They are also requesting state leaders and organizations join them in supporting this effort.

“We’re calling on all Members of Congress to join our letter asking the DOJ to investigate the packer oligopoly for anticompetitive behavior,” Rounds said. “This issue doesn’t just impact cattle ranchers. It impacts every single American family who purchases beef at the grocery store. We must get to the bottom of this before it drives beef prices higher and forces more independent cattle producers out of business.”

"Cattle producers and consumers in Minnesota and across the country have been hurt by the increasing concentration of market power and anti-competitive actions by just a few meat packing companies,” Smith said. "I'm urging Attorney General Garland to investigate anti-competition issues in beef processing because this consolidation has pushed many producers financially underwater. At the same time, it's also forcing consumers to pay an over-inflated premium on beef. This is an important issue for producers and consumers alike."

The letter addressed to Attorney General Merrick Garland states:

“Exactly 100 years ago, the United States saw fit to break up the packing industry because of concentration and market manipulation. Since that time, packer concentration and foreign influence has significantly grown and until the question of whether consolidation of power in the meatpacking industry has amounted to violations of our antitrust laws is fully answered, this market will continue to suffer for both the consumer and the producer.”

Currently, four large companies – two of which are foreign-owned – control over 80% of the processing market in today’s economy and operate 18 of the top 20 beef slaughter facilities in the country. This control, the letter states, allows meatpackers to seemingly control prices at their will, or even defy expectations of market fundamentals.

“In the last several years, the price of live cattle in the United States market has plummeted, while the price of boxed beef has significantly increased, raising consumer prices at the grocery store,” the letter said. “Concurrently, the major packing companies realized significant profits, while both U.S. beef consumers and independent cattle producers paid the price. These large price disparities are leading independent cattle producers to go broke and causing consumers to pay an unnecessary, over-inflated premium on beef.”

“If we do not take action, current U.S. policies will be identified as the cause for the demise of the American rancher and American consumers will be forced to pay a higher price for a much lower quality product. The time has come to either enforce or examine our anti-trust laws to restore fairness to the marketplace. American consumers and producers depend on us,” the letter concluded.

Full text of their letter can be found HERE.

Background:

Since he was elected to the Senate, Sen. Rounds has worked to address the negative impacts of meatpacker concentration. Most recently, he:

• Reintroduced legislation with Sen. Angus King (I-Maine) to allow meat and poultry products inspected by state Meat and Poultry Inspection (MPI) programs to be sold across state lines.
• Introduced bipartisan legislation to foster more competitive cattle markets by requiring that a minimum of 50 percent of a meatpacker’s weekly volume of cattle purchases take place on the open or spot market.
• Introduced legislation which would outlaw foreign beef from being labeled as a “Product of the U.S.A.” and make certain that label only goes on beef and beef products exclusively derived from animals born, raised and slaughtered here in the United States.

###