Feds Highlight Ideas To Fix Cattle Market While Packer Probe Continues

Jul 22, 2020

The cover of a new investigation report on cattle prices from the U.S. Department of Agriculture.
Credit USDA

South Dakota Congressman Dusty Johnson is both encouraged and disappointed by an investigative report on cattle prices. 

The U.S. Department of Agriculture published the report Wednesday.  

The first thing Johnson noticed is what the report omits. It does not say whether big beef packers are price-fixing or doing anything else improper or illegal. 

“That’s surprising, because that’s what we thought we were getting,” Johnson said on a conference call with reporters. 

The report says that aspect of the investigation is still active. The report adds, “Findings thus far do not preclude the possibility that individual entities or groups of entities violated the Packers and Stockyards Act.” 

U.S. Rep. Dusty Johnson, R-S.D.

The report does highlight some ideas to boost cattle prices. Johnson highlighted some of those: Requiring more reporting by packers to improve transparency; requiring more open-market cattle sales instead of private contracts; offering more government grants and loans for small meat processors to help them compete against bigger packers; and providing more education and better marketing tools and supports to small- and medium-scale farmers and ranchers. 

Johnson applauded those and other ideas in the report. 

“I think USDA stepping forward and acknowledging these market weaknesses and offering some concrete solutions for how to attack them, it does strengthen our hand,” Johnson said. 

The USDA investigation focuses on impacts from COVID-19 and a packing-plant fire last year in Kansas. Both events reduced production at packing plants. 

Meanwhile, the price that packers got for beef rose. The price ranchers got for cattle did not. The report says the gap hit $2.79 a pound during the pandemic. That’s the biggest gap since tracking began almost 20 years ago.