Chuck Grassley

United States Senator from Iowa

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Grassley Seeks Federal Investigations into Potential Market Manipulation and Other Illegal Activity by Meat Packers

Apr 01, 2020
WASHINGTON – Sen. Chuck Grassley (R-Iowa), a leading advocate for agriculture and farmers in the U.S. Senate, is calling on the Departments of Justice and Agriculture to investigate potential market manipulation and other illegal activity by large meat packing companies in the cattle industry.
 
“With the shelf price of meat at record highs and with the high rate of concentration in the meat packing industry, there are concerns that the difference in these margins is the result of illegal practices,” Grassley wrote.
 
In a letter to Attorney General William Barr and Secretary of Agriculture Sonny Perdue, Grassley cites repeated, numerous and significant concerns raised by farmers and ranchers about possible illegal practices due to consolidation of the meat packing industry. The senator is seeking investigations from both departments into these serious allegations.
 
“I request that you examine the current structure of the beef meat packing industry and investigate potential market and price manipulation, collusion, restrictions on competition and/or other unfair and deceptive practices under the United States antitrust laws and the Packers and Stockyards Act,” Grassley continued.
 
Full text of the letter follows or can be found HERE.
 
March 31, 2020
 
The Honorable William Barr
Attorney General
U.S. Department of Justice
950 Pennsylvania Avenue, NW
Washington, DC 20530
 
The Honorable Sonny Perdue
Secretary of Agriculture
U.S. Department of Agriculture
1400 Independence Ave. SW
Washington, DC 20250
 
Dear Attorney General Barr and Secretary Perdue:
 
I write to call on your departments to investigate concerns raised by America’s farmers and ranchers about possible illegal practices in the cattle industry. Since February 4, 2020, live cattle prices are down 16 percent. This is happening while American consumers bought 77 percent more meat during the week of March 15 compared to 2019. The spike in the purchase of beef products at the grocery store has resulted in higher beef values for meat packers, yet farmers and ranchers have seen a net decrease in the value of cattle. Further, the four largest meat packing companies control approximately 80 percent of beef processing in the United States. With the shelf price of meat at record highs and with the high rate of concentration in the meat packing industry, there are concerns that the difference in these margins is the result of illegal practices.
 
The Department of Justice and the Department of Agriculture should initiate investigations into potential market manipulation and unfair practices within the cattle market. I have received a large volume of calls and emails from Iowans and member organizations expressing concerns that the current discrepancy between high shelf price and decreased cattle price does not make sense. I share the concerns of these farmers and ranchers and I take their claims seriously. As such, I request that you examine the current structure of the beef meat packing industry and investigate potential market and price manipulation, collusion, restrictions on competition and/or other unfair and deceptive practices under the United States antitrust laws and the Packers and Stockyards Act.
 
Thank you for your prompt consideration of this important matter. I look forward to hearing the results of your investigations.
 
Sincerely,
-30-