Eleven states urge Justice Department of Justice to investigate suspected market manipulation by meat packers during COVID-19 pandemic. Call follows U.S. senators’ request for probe.
A bipartisan group of 11 state attorneys general (AGs) are asking the Department of Justice to pursue a federal investigation into suspected national price fixing by meat packers in the cattle industry. The state AGs note that cattle prices remain low and are decreasing despite the fact that consumers are stockpiling meat in response to the COVID-19 pandemic. In their May 5 letter to U.S. Attorney General William Barr, the states suggest that the state of competition in the industry are depriving cattle ranchers and American consumers of the benefits of a competitive cattle industry.
According to the states, regulatory strategies should be explored to promote competition, address market manipulation, and protect consumers, if the government concludes that no appropriate enforcement action that can be pursued. The states have offered to collaborate with the federal government, but they see the issue as having a nationwide impact. The states signing the letter are Arizona, Colorado, Idaho, Iowa, Minnesota, Missouri, Montana, Nebraska, North Dakota, South Dakota, and Wyoming.
The state AGs’ letter follows an April 24 letter from Senator Mike Lee (R-Utah), Chairman of the Senate Subcommittee on Antitrust, Competition Policy and Consumer Rights, and Amy Klobuchar (D-Minn.), the subcommittee’s ranking member, to the heads of the Justice Department, Commodity Futures Trading Commission, and the U.S. Department of Agriculture, calling for a similar investigation. The senators asked the agencies to identify any potential structural changes in the trading markets that would help ensure the well-functioning of the meat supply chain and its markets for all of the participants and consumers. Makan Delrahim, Assistant Attorney General in charge of the Department of Justice Antitrust Division, was copied on the letter.
There is clear support from cattle ranchers for an immediate investigation. "One segment of the industry is making unprecedented profits while the rest of us are counting pennies," said Missouri Cattlemen's Association President Marvin Dieckman. "We need DOJ to open an investigation immediately."
The calls for an investigation come as the country’s largest meatpacking companies continue to grapple with plant closures and reduced production levels at processing facilities due to the COVID-19 pandemic. JBS USA and Tyson Foods, two of the largest meatpacking companies, have announced plant closures and reopenings in recent weeks as they deal with the virus. On April 28, President Trump issued an executive order regarding the food supply chain that is intended to keep meat and poultry processors operating.
Companies: JBS USA Holdings, Inc.; Tyson Foods, Inc.
MainStory: TopStory Antitrust AntitrustDivisionNews GCNNews Covid19
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