Beef Packers Need to be Held Accountable

By Mackenzie Johnston

On Wednesday President Trump asked the Department of Justice to investigate the beef packers. In all of history, beef packers have never made such ridiculous profits. At the same time, live cattle are being sold at record lows and many cattle feeders aren’t able to get bids on their cattle that need to be slaughtered. There are folks in the cattle industry who are currently dusting off Foot and Mouth Disease protocols to dispose of cattle.

I’ve heard people say the packers have just set themselves up well and it’s their turn to make a profit. I understand that we all need to make a profit, even the packers. We need the packers to make this industry function and I’m not here to bash the packers. We’ve let our processing sector become a consolidated monster, and they run a cutthroat business. But they aren’t just making a profit; last week beef packer margins were currently hovering around $1,500/hd, this week they are even higher, while the producers lose more money with every passing day. The monopoly between the four big packers has made price fixing pretty darn easy, and with this comes exceedingly fat margins.

I believe the only way to stop the abusive powers within our processing sector is to have a fair investigation by the Department of Justice. We need a real investigation, not one like the Holcomb plant fire where we never received any answers. The packers need to be held accountable for what they’re doing to the industry. I’m not just talking about a slap on the wrist; they need negative publicity about what they have done to the cattle industry and the American consumer, severe penalties, jail time, and any other repercussions that are fitting for the crimes they are committing.

We don’t have generational cattle producers questioning if they’ll make it another year because of a poor management decision they’ve made. They’re questioning their survival because the packer is choking a profit out of the production side of our industry.

Antitrust laws need to be enforced to keep these companies honest. The purpose of the Packers and Stockyards Act according to Congress is, “to assure fair competition and fair trade practices, to safeguard farmers and ranchers . . . to protect consumers . . . and to protect members of the livestock, meat, and poultry industries from unfair, deceptive, unjustly discriminatory and monopolistic practices.” Imagine how different our industry would look if this act was enforced.

If there was this kind of price gouging on any other product, all hell would break loose. What about those consumers who want to buy beef for their families, but can’t afford it because ground beef is over $6.00/lb in the grocery store? When packers work together their is no competition. Without competition there is no limit to what they can charge. Talk about a pitiful thing that is happening to the American consumer. America’s cattle producers can only lose money for so long. This isn’t just about our cattle producers; it’s about rural America as a whole. When we lose our independent producers, we’ll lose our small communities right alongside.