News
Why do four large companies control the US beef and meat industry?
21 June 2021US lawmakers are seeking increased oversight of the beef sector as concerns about anticompetitive behavior increase after the pandemic and a cyberattack on a major meat company, JBS USA.
An in-depth article from Reuters explains that agriculture officials are simultaneously pushing for more processing capacity and ranchers are opening new slaughterhouses after plant shutdowns highlighted the industry's reliance on large facilities run by four main processors.
How concentrated is the US beef sector?
Four companies slaughtered about 85% of U.S. grain-fattened cattle that are made into steaks, beef roasts and other cuts of meat for consumers in 2018, according to the most recent data from the US Department of Agriculture (USDA).
When factoring in other cows used to make hamburger meat, the companies comprise about 70% of total US beef production, according to the North American Meat Institute, an industry group.
Which companies control the sector?
The big four processors in the US beef sector are: Cargill, a global commodity trader based in Minnesota; Tyson Foods Inc, the chicken producer that is the biggest US meat company by sales; Brazil-based JBS SA, the world's biggest meatpacker; and National Beef Packing Co , which is controlled by Brazilian beef producer Marfrig Global Foods SA.
When did these companies gain control of the sector?
The amount of cattle slaughtered by the four firms rose from 25% in 1977 to 71% in 1992, according to USDA data. Increases were also posted for other animal proteins like chicken and pork. A shift toward larger processing plants led to sharply increased concentration in cattle slaughtering, the USDA said in a 2000 report.
Why did plants get bigger?
Meatpackers are able to lower the cost of processing each animal by running bigger operations instead of smaller facilities.
In 1977, 84% of US steers and heifers were slaughtered in plants that killed fewer than half a million cattle a year, according to the USDA. By 1997, plants in that category saw their share drop to 20%.
Why is industry consolidation in the spotlight?
Three separate events in 2019, 2020 and 2021 highlighted the country's reliance on large beef plants run by the four biggest processors.
First, a large Tyson Foods plant in Holcomb, Kansas, closed for four months following a fire on 9 August 2019, that reduced US beef production and removed a market where farmers could sell their cattle.
The second disruption occurred as COVID-19 spread last year, causing slaughterhouses nationwide to close to contain outbreaks of the virus among workers.
On 30 May 2021, JBS detected a ransomware attack on its systems that temporarily closed its US beef and pork plants.
What are cattle ranchers worried about?
Ranchers are frustrated that cattle prices drop when major plants close, while meat companies still benefit from rising meat prices. After the Tyson plant fire and the start of the pandemic, the difference between prices for cattle and beef rose to record levels, according to the USDA.
Plant shutdowns remove markets for ranchers to sell their animals and tighten meat supplies by reducing production. Ranchers say there is too little competition among beef processors to buy cattle.
What is being proposed?
Lawmakers have proposed legislation to create an office for a special investigator within USDA to address concerns about anticompetitive practices in the meat and poultry industries.
USDA has said it plans to strengthen enforcement of a 100-year-old federal act intended to protect farmers and ranchers from unfair trade practices. The agency pledged to support increased processing capacity as part of a $4 billion initiative to strengthen the country's food system.
A group of US governors is pushing the Justice Department to continue an investigation into anti-competitive practices in the meatpacking industry.
The North American Meat Institute, which represents meatpackers, said processors and ranchers "benefit from a fair and competitive market."
Read more about this story here.
Source: Reuters
The Link LonkJune 21, 2021 at 07:05AM
https://ift.tt/3xC8PUZ
Why do four large companies control the US beef and meat industry? - www.thecattlesite.com
https://ift.tt/2RxTDX4
Beef
No comments:
Post a Comment