SD Sale Barn Owner Tells Congress To Investigate ‘Anti-Competitive’ Packer Activity
Some South Dakota ranchers and feed lot operators are asking a U.S. Senate committee to investigate anti-competitive practicing in the meat industry.
Their goal is to break up the control of large meat packers.
However, there is concern increased government regulation could roll back quality standards.
Four corporate meat packers control 85 percent of the United States cattle market. Some say that’s led to price setting and huge profits for those companies – while edging out competition in the marketplace.
Justin Tupper is the vice president of the U-S Cattleman’s Association and owner of the St. Onge livestock sale barn.
He says packers’ control so much of the market that there’s little competitive bidding.
“You talk to any of these small or medium size feed lots that do not have already an arrangement with a packer, they do not get a second bidder and they can’t get one,” Tupper says. “They tell them that you have to take this bid because otherwise there isn’t a chain or a shackle space for you.”
One rancher who testified before the Senate Ag committee, says recent challenges in the beef markets have been the result of forces that do not require increased government regulation.
Mark Gardiner owns a ranch in Kansas. He says imposing new restrictions could have unintended consequences.
“The challenge for everybody is—whether you’re a cow/calf producer, or a processor—is how are you profitable? If you look back in history 100 years ago we had lots more processors,” Gardiner says. “The blunt truth of the matter is that they were not profitable.”
Ranking Republican and South Dakota U.S. Senator John Thune says the Senate Ag committee should draft legislation or work with the Department of Justice to address the lack of competition.
“And the fact that there is an oligopoly and that price setting and market powers is being used in a way that disadvantages the very people that are out there trying to make a living on the land,” Thune says.
Thune says he wants answers for ranchers. He says the beef marketplace should act fairly and transparently.