Warm Southern Breeze

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Posts Tagged ‘price fixing’

11 States’ Attorneys General Ask DOJ To Investigate Meat Packers’ Price Fixing

Posted by Warm Southern Breeze on Thursday, May 7, 2020

Everything old is new again.

1919 characterization of BIG BUSINESS interests

Earlier, I had written about the obvious, which was that the concentration of meat processing facilities and a corresponding reduction in their numbers, does not portend well for the American consumer, neither for the competitive market, nor for farmers – and ONLY for Wall$treet-traded international conglomerate BIG BUSINESS.


The Attorneys General of Arizona, Colorado, Idaho, Iowa, Minnesota, Missouri, Montana, Nebraska, North Dakota, South Dakota, and Wyoming have jointly signed a letter requesting United States Attorney General William Barr to investigate concerns of Price Fixing by the nation’s largest meat packers.

The AGs’ request comes after a March 19, 2020 letter sent from Senators M. Michael Rounds (SD-R), Kevin Cramer (ND-R), Steve Daines (MT-R), and John Hoven (ND-R) to AG Barr urging the “Department of Justice investigate continued allegations of (meat-packer) price fixing within the cattle market and to examine the current structure of the beef meatpacking industry for compliance with U.S. Antitrust law.” Reuters had earlier reported the Senators’ request 30 March.

Drovers, the nation’s oldest livestock publication, and beef industry specific news reporting agency, earlier reported 31 March 2020 that “Cattlemen have complained that surging meat prices due to the COVID-19 crisis hoarding did not translate into higher cattle prices. During the crisis, CME futures prices plunged lower along with the stock market, but wholesale beef prices rose 22% to a peak near $257 per cwt.”

The day prior, 30 March, Drovers reported an increase in beef and poultry production, by writing that “U.S. meat and poultry production increased an estimated 10% during the week ending March 28, according to the Livestock Marketing Information Center (LMIC). Over the past four weeks, combined production of beef, pork, chicken and turkey was up 8.5% compared to the previous year.”

Numerous meat processing facilities nationwide have closed, after many of their employees became sick after infection with COVID-19 novel coronavirus. In response, Tyson Foods CEO John Tyson purchased a full-page advertisement in the Sunday edition New York Times which contained a letter he had written claiming that “The food supply chain is breaking.” Tyson is the nation’s 2nd largest food producer.

The ostensible cause of such plant closures he blamed upon others, not upon his company’s practices, and stated that “there will be limited supply of our products available in grocery stores until we are able to reopen our facilities that are currently closed.”

And on April 12, the American CEO of the Chinese-owned Smithfield Foods had earlier written that “Smithfield Foods, Inc. announced today that its Sioux Falls, SD facility will remain closed until further notice. The plant is one of the largest pork processing facilities in the U.S., representing four to five percent of U.S. pork production.”

On April 28, the Editorial Board of Newsday, a daily newspaper serving the greater New York City, and surrounding areas, wrote in part that,

“The federal government, late to react to the food crisis, must work with meat processing plants to get more protective equipment for workers, clean shared equipment, and reconfigure workstations so that physical barriers create at least six feet of space between them. Farming operations should be more nimble when markets change. Local food banks, which banded together after superstorm Sandy to improve their response to disasters, must do the same for pandemics.

“We can do this. We have enough food. We need to be smarter and better prepared so it’s not wasted and gets to those who need it.”

Soon thereafter, on April 30, Forbes magazine writer Jim Vinoski also took exception to the claims made by the executives, and wrote in concluding part that,

“Dave McLennan, CEO of Cargill, struck a much better note than Tyson did. He’s another guy we should listen to. Cargill is the largest privately-held company in the U.S. based on revenue, producing and distributing agricultural products such as sugar, refined oil, chocolate and turkey, and providing risk management, commodities trading and transportation services. They have sales of $115 billion annually, with $8.9 billion of that in food, and they employ 160,000 people. Appearing on “Leadership Live With David Rubenstein,” he said, “I think I would characterize it as the food supply chain is under strain. But there’s a lot of supply chains that are under strain due to what’s happening… I think basically, the ability of us to produce food is still there… The food industry and the food supply chain is resilient. I think the people that work in it every day are resilient. So I think it’s under strain, but I don’t think it’s broken.””

Even the President has jumped into the fray to investigate the highly-concentrated meat processing industry, and said he has asked the DOJ to investigate if the big industry’s players may have acted wrongly, or broken any laws – particularly the Sherman Antitrust law.

On Tuesday, April 28, citing the Defense Production Act, the President issued an Executive Order for meat processing facilities to remain open. Critics pointed out the obvious, which was that if employees could not come to work because of their own, or others’ sickness or disease, that the executives could not begin to operate those facilities.

A year earlier, following a fire at a Tyson-owned Holcomb, Kansas beef processing facility, Secretary of Agriculture Sonny Perdue had directed the USDA’s Packers and Stockyards Division to launch an “investigation into recent beef pricing margins to determine if Read the rest of this entry »

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