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published: June 12th 2020

Department of Justice subpoenas the “Big 4” beef packers
Compiled from media sources by
Southern Livestock Staff

The Department of Justice (DOJ)on June 4th formally demanded information from America’s “Big 4” U.S. beef packers regarding potential anti-trust violations, according to Bloomberg, who quotes unnamed sources close to the investigation.
    Tyson Foods, JBS SA, Cargill, Inc., and National Beef Inc., were sent investigative demands, which are similar to subpoenas by the DOJ antitrust division.
    Tyson Foods, JBS SA, Cargill and National Beef are known to control more than 80 percent of the beef processing in this country.
    Attorneys general from North Dakota, Nebraska, Iowa, Minnesota, Mon-tana, Wyoming, Colorado, Missouri, Idaho, Arizona and South Dakota asked U.S. Attorney General William Barr to look into the pricing activity of the four big meatpackers in recent months to determine whether or not anti-trust activity occurred. The three major cattle organizations, R-CALF USA, U.S. Cattlemen’s Associa-tion and the National Cattlemen’s Beef Associa-tion also requested DOJ scrutiny.
    During the COVID-19 crisis, the influence of the big four packers over cattle prices has become more obvious, say some cattlemen’s groups. Many packing plants have closed, fully or in part, mostly due to sick workers, leaving cattle feeders no options for their slaughter-ready cattle. Boxed beef prices have more than doubled in recent months, while live cattle prices dropped by 20 percent or more, and many feeders were unable to obtain bids, forcing them to feed cattle past their optimum point — lessening the value of the cattle and in-creasing the feeders’ costs.
    Disruptions at beef packing plants reduced slaughter of cattle and left many standing in feedyards, increasing producer costs and further disrupting feeder cattle and calf markets across the country. Industry analysts estimate the backlog of cattle could be near 1 million head before processing levels return to pre-COVID-19 levels.
    The Justice Department subpoenas to the meatpackers follow criminal charges June 3rd against four current and former executives of chicken processing companies, including the chief executive of Pilgrim’s Pride Corp., America’s second-biggest chicken producer. Prosecu-tors say the executives conspired with one another to fix prices for chicken sold to grocery stores and fast-food chains
    In early May, President Donald Trump said he asked the Justice Depart-ment to look into allegations   that  U.S.  meat  packers broke antitrust law because the prices paid to farmers and ranchers has declined even as meat prices rose.
    USDA reportedly laun-ched an investigation into packer buying practices after a fire in a large Kansas meatpacking plant in August of 2019 resulted in a significant cattle price drop.
    No results from that investigation have been made public.
SLS

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