Cattle group applauds USDA effort to expand beef processing

LEXINGTON, Ky. (WTVQ/Press Release) The largest U.S. producer-only cattle trade association, R-CALF USA, applauded Friday’s announcement by Secretary of Agriculture Tom Vilsack to use his fiscal authorities to drive efforts to restore competition in livestock markets.

Vilsack announced the availability of $500 million for making investments in meat processing and for developing a strategy to ensure the investments effectively jumpstart and sustain competition over the long haul.

The move could be particularly important in Kentucky, which is the largest beef-producing state east of the Mississippi River.

“It is clear the Secretary intends to open the bottleneck created in the cattle industry because there are too few remaining beef packers to effectively and timely harvest the tens of millions of cattle produced each year by America’s cattle producers,” said R-CALF USA CEO Bill Bullard.

The vulnerability of America’s food supply chain became obvious to all when grocery stores ran out of beef following the 2020 onset of the COVID-19 pandemic. This suggested the current structure of the cattle and beef industry is inadequate to ensure national food security.

Bullard says competition has been purged from the cattle and beef supply chain, and this has caused the relationship between beef prices and cattle prices to disconnect.

As a result, he says, consumers have been paying very high prices for beef – as if there was a shortage – and cattle producers have been receiving severely depressed prices for their cattle – as if there was a surplus.

“This exemplifies today’s broken cattle supply chain in which there is no shortage of cattle, just a shortage of marketing outlets for which to bring those cattle to market,” said Bullard.

“We’re looking forward to working with the Secretary by responding to the forthcoming Request for Information soon to be issued by the U.S. Department of Agriculture that will give us the opportunity to recommend how best to use this money to ensure the permanent return of competitive market forces within the cattle industry,” Bullard concluded.

Others also applauded the move.

“The Justice Department commends the USDA for today’s step toward spurring new entry and increasing competition in meatpacking. USDA’s efforts align with the department’s commitment to vigorously enforcing the antitrust laws in the agriculture industry. The antitrust laws work best when paired with robust government policies to ensure that new competitors can successfully enter and challenge entrenched incumbents,” noted Associate Attorney General Vanita Gupta issued the following statement today after the U.S. Department of Agriculture’s (USDA) request for public comment on how best to invest American Rescue Plan funds to improve competition and resiliency in the meatpacking industry:

“The Justice Department commends the USDA for today’s step toward spurring new entry and increasing competition in meatpacking. USDA’s efforts align with the department’s commitment to vigorously enforcing the antitrust laws in the agriculture industry. The antitrust laws work best when paired with robust government policies to ensure that new competitors can successfully enter and challenge entrenched incumbents.”

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