Price-fixing in beef-packing industry questioned

FRANKFORT, Ky. (WTVQ) – Agriculture Commissioner Ryan Quarles and Attorney General Daniel Cameron have asked the federal government to investigate possible anticompetitive practices in the beef packing sector.

The letter to U.S. Attorney General William Barr and the Department of Justice (DOJ) notes that, despite steady consumer demand for beef, the prices paid to Kentucky’s cattle producers have declined, suggesting the presence of possible market manipulation and other anti-competitive practices.

As a result, Kentucky consumers are paying more for beef while hardworking Kentucky farmers are making less, the letter claims.

“As Kentucky and the nation move towards reopening the economy in a quick and responsible manner, consumers and farmers deserve to know if there is a scheme to threaten market competition in the beef industry. Our beef cattle producers have seen 30 and 40 percent price drops since the start of the pandemic, even while the price of beef products at the grocery store has increased,” Quarles said, referring to the state’s 38,000 cattle farmers.

“Kentucky’s cattle producers and consumers already face incredible economic challenges as a result of the COVID-19 pandemic, and we must ensure that they are treated fairly in the marketplace and do not face additional hardship because of price fixing or other anti-competitive actions,” Cameron added.

The beef-processing industry has said the costs of shutdowns, safety enhancement, treating employees and other factors have driven up the costs while an overall increase in supply have kept prices paid producers down.

The ongoing COVID-19 pandemic has led to disruptions at meat processing plants and created shortages nationwide. With only four beef processors controlling 80 percent of the American market, such disruptions further exacerbate pre-existing disparities between the price of live cattle and the wholesale price of beef.

Kentucky is the largest beef cattle state east of the Mississippi River and the negative effects of any possible anti-competitive business practices on both consumers and our producers can be significant, noted Dave Maples, executive director of the Kentucky Cattlemens Association.

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