Rep. Dusty Johnson and Sen. Mike Rounds recently secured legislative wins for ranchers against large meatpacking companies that dominate the beef industry.
Johnson’s bill is intended to expand domestic meat processing capacity. Rounds’ bill is intended to strengthen enforcement of laws regulating anti-competitive behavior.
The price of consumer meat products has risen in recent years, but the prices ranchers get for their cattle has not kept pace. Meanwhile, large processors say labor shortages and the coronavirus pandemic have made it difficult to operate at full capacity, restricting the nationwide supply of meat.
But politicians and ranchers say those issues are exacerbated by heavy consolidation in the industry. Four companies — JBS, Tyson, National Beef and Cargill —currently control over 80% of the domestic beef processing market.
Johnson’s bill, the Butcher Block Act, passed the House of Representatives last week. The bill will go to the Senate for consideration. It would allow the Department of Agriculture to provide loans or grants, up to $50 million, for the construction, refurbishment or expansion of small meat processing plants. The bill, introduced last June, is designed to exclude large and foreign-owned companies.
“It’s going to build new capacity outside of the big four meatpackers,” Johnson said. “If you believe in the laws of supply and demand, that’s going to have a big impact.”
Rounds’ bill, the Meat Packing Special Investigator Act, passed the Senate Agriculture Committee. It would create an office at the Department of Agriculture to investigate violations of the 1920 Packers and Stockyards Act. That law is intended to prevent price fixing and monopolistic behavior in meat markets, but ranchers say it’s underenforced.
Rapid City-area rancher Matt Kammerer said the big four meatpackers are self-interested.
“It doesn't matter whether they break us or not or whether it makes us money or not, it’s as long as they make money,” Kammerer said. “They inflate the price going to the consumer, so our consumer’s getting stuck in the backside too. And it’s all because it’s way too concentrated, there’s not enough buyers.”
The office created by Rounds' bill would coordinate with the Department of Justice and the Federal Trade Commission to investigate suspected anticompetitive behavior.
“Unfortunately, packer concentration in the beef industry is more consolidated today than it was when the Packers and Stockyards Act was first signed into law over 100 years ago,” Rounds said in a press release. “It’s long past time to address this problem.”
Members of Congress and the Biden administration have billed meatpacking reform as a way to curb high food costs amidst rising inflation.