How Beef Packers Weaseled Their Testimony Into the Cattle Market Senate Hearings

Mark Gardiner giving his Senate testimony.

By Jim Mundorf

On Wednesday the U.S. Senate held a hearing, “Examining Markets, Transparency, and Prices from Cattle Producer to Consumer.” During the hearing the Senate heard the testimony of two cattle ranchers, two college professors, and a banker. I’ve never cared much about what college professors or bankers thought. I tuned in to see the Ranchers speak, and one of them had a pretty eye opening testimony.

The first testimony was given by Justin Tupper, a Rancher and Auctioneer from St. Onge South Dakota. He knocked it out of the park, explaining the issues facing all cattle producers, “Producers see huge losses in equity while the packer reaps all the rewards despite having the least amount of risk and owning the product the least amount of time, while exploiting producers and ultimately the consumer. American cattle producers do not want, nor are we looking for a handout, we just want a fair an equitable playing field.”

The second testimony was given by Mark Gardiner, who was introduced as a Rancher from Ashland Kansas. Gardiner started his testimony by stating, “I am very pleased to represent beef producers who are committed to the industry to raise the safest and highest quality beef in the world.” He then went on to give what seemed like a completely delusional testimony that describing the cattle market as being, “driven by pure economic market principles.” He gave the typical beef packer lobby excuses of, “a processing plant fire, a pandemic, and a ransomware attack.” He talked about how great, confidential alternative marketing agreements (AMA) are and how wonderful they have worked for the industry. It seemed his main reason for testifying was to tell the Senate how great the current system was working and to warn them not to change it.

So, why would a cattle producer give testimony defending beef packers and the massive profits packers make through market manipulation and the screwing of the American cattle producer? After doing a little checking, I found the answer was pretty straightforward. Mark Gardiner profits directly from massive beef packer profits.

U.S Premium Beef

For his testimony Mark Gardiner is introduced as a Rancher, but during his introduction it was also mentioned that he was a founder and board member of U.S. Premium Beef(USPB.) What was conveniently left out of that introduction is that USPB currently owns 15% of National Beef Packing. National Beef is one of the four beef packing corporations that control 85% of the cattle market in the U.S. and between 2003 and 2011 USPB was the majority owner of National Beef. Gardiner is Chairman of the board of USPB and his CEO is on the board of National Beef. So while Mr. Gardiner is a Rancher, he is also a partner and part owner of one of the companies that is accused of manipulating the cattle market. This is a massive conflict of interest. One that definitely should have kept him from testifying, or at least, one that Senators should have been made aware of. I have a feeling he may have gotten a lot more questions had Senators known that he was so intimately connected to the packing industry.

What U.S. Premium Beef does, is they are a company that sells memberships to cattle producers to allow them to deliver directly to National Beef Packing plants and get in on those confidential, Alternative Marketing Agreements, that pay premiums over the actual market price. So not only should Gardiner’s connections to packers have disqualified him from testifying, but also the fact that as a cattle producer he never really participates in the cattle market. From what I understand from the USPB website their cattle are simply delivered to National Beef packing plants where they receive a confidential, AMA contract. He is actually probably the last person alive that should have been giving testimony in a hearing on market transparency. There are probably very few people who have ever gained more from both beef packer concentration and confidential cattle marketing agreements than Mark Gardiner.

Why him?

I have no problem with Mark Gardiner making smart and shrewd business decisions that he has no doubt profited from. The problem is that he was paraded in front of the Senate as just another Kansas Cattle Rancher, when there is so much more to the story.

So how does this happen? How does the last person who should ever be giving testimony end up being asked to give testimony? Well it just so happens that the President of the largest beef packing lobbyist organization, NCBA, is the Secretary of the Board at USPB. So, both Gardiner and NCBA President Jerry Bohn are board members of a company that owns 15% of National Beef. I have no doubt that the NCBA lobbied their buddies Senator Marshall from Kansas, and Senator Boozman from Arkansas (home of Tyson Foods) to get Gardiner up there to speak for the beef packers, and begin his testimony with, “I am very pleased to represent beef producers.” All the while on his USPB website it states, “With ownership interest in National Beef Packing Co., LLC, USPB members share in the success of one of the nation's largest beef processors.” So while the rest of the cattle industry has been suffering over the last couple years, Mark Gardiner, NCBA President Jerry Bohn, and their company have been proudly sharing in the successes of the beef packing industry.

A Good Day for Cattle Producers

The good news was that most Senators didn’t seem to take much stock in Gardiner’s testimony. Surprisingly most that participated seemed educated enough on the topic to see through the BS that Gardiner and a couple of the others were pedaling. What the hearing showed is that powerful corporate lobbyists will always be able to get their voices heard, but because there has been an outpouring of calls and emails from actual citizens who care about the future of the cattle industry the real cattle producers voice has already been heard by many Senators. While I hate to put much hope in politicians, Senators Grassley, Thune, Hyde-Smith and a number of others seemed motivated and excited to push for solutions to protect the independent American cattle producer. Time will tell.

P.S. Feel free to share this with your Senators to let them know whose testimony they were really listening to.

Find them here: https://www.usa.gov/elected-officials

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Jim Mundorf- Owner of Lonesome Lands and The Drover House. He also works on his families farm and cattle ranch in Iowa