WASHINGTON – This week, U.S. Sens. Chuck Grassley (R-Iowa), Jon Tester (D-Mont.) and Mike Rounds (R-S.D.) reintroduced their Meat Packing Special Investigator Act to combat corporate consolidation, enforce the nation’s antitrust laws and protect the livelihood of family farmers and ranchers. The bill would create the “Office of the Special Investigator for Competition Matters” within the U.S. Department of Agriculture (USDA) Packers and Stockyards Division, comprised of a team of investigators, with subpoena power who are responsible for targeting and preventing anti-competitive practices among large players in the meat and poultry industries. The enactment of this team creates a necessary bridge between the USDA and the Department of Homeland Security to safeguard the nation’s food supply and promote national security.
“Increased consolidation and anticompetitive tactics by meat packers continues to create unfair markets for Iowa meat producers and consumers alike,” Grassley said. “In the last few years, we’ve seen settlement after settlement from major packers accused of distorting the market. It’s time we beef up tools to protect Iowa farm families and folks at the meat counter. This bill provides USDA with the necessary tools to strengthen enforcement of the Packers and Stockyards Act, increase coordination with DOJ, FTC, and DHS and to foster a fair and functional marketplace for everyone who grows, produces, and enjoys quality American meat.”
“Folks in Washington don’t understand that the deck is stacked against Montana’s cattle producers,” Tester said. “I’ll take on anyone to make sure that Montana’s family farmers and ranchers get a fair chance to compete in the marketplace. For too long, massive multi-national conglomerates have run the tables on our producers—who produce the best beef in the world—and our bipartisan bill will give them the chance to compete on a level playing field.”
“Anticompetitive behavior in the meat packing industry hurts both consumers and producers,” Rounds said. “Unfortunately, packer concentration in the beef industry is more consolidated today than it was when the Packers and Stockyards Act was first signed into law over 100 years ago. For years, the gap has widened between the price paid to cattle producers for their high-quality American products and the price of beef at the grocery store. Meanwhile, the four largest beef packers, who control 85 percent of our beef processing capacity, have enjoyed record profits. This has resulted in an average of nearly 17,000 cattle ranchers going out of business each year since 1980. This bipartisan legislation seeks to address these anticompetitive practices that threaten the nation’s food supply and run family ranches out of business.”
With just four companies controlling 18 of the top 20 beef slaughter facilities in the country, the U.S. meatpacking industry is significantly consolidated. Through formula and forward cattle pricing, large corporate packers can reduce the number of slaughters, curtail cash trades and use depressed demand to manipulate future contracts, significantly diminishing the ability of independent farmers and ranchers to negotiate fair returns for their products.
Grassley, Tester and Rounds have led the charge to fight consolidation in the meat and poultry industries. In June of 2021, the senators urged the U.S. Department of Justice to investigate whether large meatpackers were violating U.S. antitrust laws with their control of the beef processing market. As a direct response to the senators’ efforts, the USDA announced a significant investment to address anticompetitive practices in the livestock industry.