USDA suggests changes to beef market as investigation continues - Food Dive

meat.indah.link

Dive Brief:

• A USDA investigation report found the pandemic disrupted the market, production and sale of U.S. beef, but didn't detail any violations of federal law. The agency began the probe after a fire at a Tyson plant in Kansas and then expanded the investigation looking at anti-competitive accusations during the outbreaks as meatpacking plant closures led meat prices to rise while cattle prices dropped. 
• The report highlighted some ways to increase cattle prices and transparency in the market. The USDA said smaller producers could better negotiate sales with packers and compete with bigger producers if they had more access to risk management training and grants. 
• The USDA also said legislation giving the agency more investigative and enforcement powers, including the ability to issue civil investigative demands, could be helpful in these probes. 

Dive Insight:

Although this report didn't detail any violations by the meat industry, the investigation is ongoing. In fact, as the Department of Justice and the USDA continue their probes, the agriculture agency is suggesting more reporting requirements for meatpacking companies and additional enforcement power for itself. 

In the report, USDA made suggestions for more transparency with pricing, including reshuffling reporting regions to expand the market data released to the public, which is a change that could be made without legislative action. However, there has yet to be industry consensus for that. The agency also said that amendments to the Packers & Stockyards Act, which assure fair competition, to give USDA the power to require written reports and answers to questions could be beneficial, but requires legislative action. 

In June, the DOJ's antitrust division sent subpoenas to Tyson Foods, JBS SA, Cargill and National Beef following anti-competitive accusations. The four companies are some of the biggest meatpackers in the country, controlling more than 80% of beef processing. The DOJ probe came after several senators, 11 state attorneys general and cattle associations pushed for the Justice Department to get involved even though USDA was already looking into it. The DOJ is still investigating those allegations and USDA said in this new report that the two have been engaged in discussions about these claims. 

"If any unfair practices are detected, we will take quick enforcement action," USDA Secretary Sonny Perdue said in a statement. 

When coronavirus started to spread across the U.S., meat sales increased and beef prices surged as consumers stockpiled and outbreaks spread within processing plants, but didn't translate into producer profits. The USDA report says the largest gap between beef prices and cattle prices during the pandemic reached about $2.79 a pound, which was the biggest gap since this tracking began in 2001. 

American Farm Bureau Federation President Zippy Duvall said in a statement it is reviewing the policy recommendations in the report, but it's important to understand the scrutiny into the market is not over.

"There’s little doubt that something is wrong when consumers are paying higher prices for meat and at the same time America’s farmers and ranchers are being paid less," Duvall said.

Although USDA said the investigation is ongoing, the North American Meat Institute had a different interpretation of the report. NAMI CEO Julie Anna Potts said in a statement it "found no wrong-doing and confirms the disruption in the beef markets was due to devastating and unprecedented events."

Antitrust and price-fixing accusations and investigations have escalated across the food industry in recent years involving dairy, tuna, chicken and pork with some of these cases ending with guilty executives and large settlements. 

Since the report confirmed the pandemic pushed the difference between livestock prices and wholesale beef prices to a record level, more legislation to address beef market concerns could be coming soon. Sen. Deb Fischer (R-Neb.) said in a statement that USDA’s investigation shows the need to immediately reform and strengthen the cattle industry. She said the report confirms her "serious misgivings about the many factors that are working to destabilize the marketplace."

"In light of these events and this report, I will be introducing legislation soon in the Senate aimed at providing equity and transparency for all market participants," Fischer said. 

The Link Lonk


July 23, 2020 at 08:56PM
https://ift.tt/2ZQaCaO

USDA suggests changes to beef market as investigation continues - Food Dive

https://ift.tt/2RxTDX4
Beef