Will the Department of Justice Give Cattle Producers the Fair Markets They Deserve
By Mackenzie Johnston
“You just continue to hope things will get better. A guy has to have a positive outlook or you’ll never survive in the cattle business.” -A few wise words from a rancher that I’m lucky enough to call my dad, Jim Johnston.
Jim Johnston, Johnston Ranch, Milburn NE
On Saturday, June 6th, 2020, The Wall Street Journal featured a front-page article concerning the Justice Department deepening their probe into meat-packer pricing. The department has issued subpoenas to the four biggest beef processors; JBS USA Holdings Inc., Tyson Foods Inc., Cargill Inc., and National Beef Packing Co. These four processors control 73% of cattle slaughter, according to Cattle Buyers Weekly.
This news comes on the heels of federal antitrust enforcers separately conducting a criminal probe into chicken pricing. On June 3rd, four poultry industry executives were indicted on charges of conspiring to rig bids and fix chicken prices.
Before Covid-19 came on the scene and caused the markets to collapse, cattle producers were calling for an investigation into the Tyson Foods plant fire in Holcomb, KS back in August of 2019. This event caused a sharp drop in cattle prices, while wholesale beef prices drastically increased for meatpackers. The USDA claimed to have launched an investigation into this price disparity, however no results have ever been made public. As Covid-19 spread across the U.S. in March, the same price disparity resurfaced. Since then, meatpackers have seen record profits, while cattle producers have not only experienced incredible losses, they’ve also been hit hard with the reality of not being able to get cattle slaughtered due to packing plant closures. Even though the industry is nearing pre-Covid-19 slaughter levels, there are still close to one million cattle backed up at the producer level, according to Corbitt Wall.
Through all of this, meatpackers claim that economic forces are driving wholesale beef prices to increase and cattle futures to weaken. One can only hope that this DOJ investigation will give cattle producers the fair markets they deserve and hold the meat packing industry accountable for not only the damage they have inflicted on American cattle producers, but also the consumers that they continue to gouge.
Yes, the past two months have been rough to say the least for cattle producers, but in all reality, cattle producers have been struggling to break even for years now. Despite these struggles, these folks are still, and will always be a part of the fabric that holds this country together, better known as agriculture. Here’s to those cattlemen and women who put in the long hours day after day to produce the highest quality beef in the world, they are second to none and I’m honored to be part of such a respectable industry.
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Mackenzie Johnston is a fifth generation rancher located in the Sandhills of Nebraska where she ranches with her folks on their red angus cow calf operation.