TheBeefSite.com - news, features, articles and disease information for the beef industry

News

USDA announces investigation into surging beef prices and flatlining cattle prices during pandemic

09 April 2020

USDA Secretary Sonny Perdue will investigate why a sudden rise in beef prices due to coronavirus hoarding didn’t translate into higher cattle prices for farmers.

According to reporting from Reuters, Secretary Perdue made the announcement on 8 April. The investigation brings additional scrutiny to the small group of meat companies like Tyson Foods and Cargill that dominate US beef processing.

"This is a good decision to address potentially unfair practices," Republican US Senator Deb Fischer of Nebraska said on Twitter.

The investigation expands a probe into the beef market that began in August 2019 after a fire that closed a Tyson Foods plant in Holcomb, Kansas sent beef prices skyrocketing but tanked cattle prices. The USDA has not released the results of that investigation.

Tyson Foods said it would cooperate with the USDA.

"During the current pandemic and following the fire at our Holcomb, Kansas, facility last August, we have taken steps to minimise the impact each situation had on our producers, production volume and our ability to cover customer needs," the company said in an emailed statement.

Cargill did not immediately respond to a request for comment. The company said previously it had been a committed buyer in the cash market for cattle, to the benefit of farmers.

In March, US senators asked the Justice Department to investigate whether beef processors engaged in price-fixing during the COVID-19 pandemic.

The National Cattlemen's Beef Association, an industry group, separately called for the USDA to work with the Justice Department to investigate whether "inappropriate influence occurred in the markets." The association also asked the US Commodity Futures Trading Commission to assess speculation in CME Group Inc's cattle futures to determine whether they "remain a useful risk-management tool" for farmers.

"USDA's Packers and Stockyards Division will be extending our oversight to determine the causes of divergence between box and live beef prices, beginning with the Holcomb Fire in Kansas last summer and now with COVID-19," Perdue said on Twitter.


Read more about this story here.



Partners


Seasonal Picks

Managing Pig Health: A Reference for the Farm - 2nd Edition