A decade after the federal Grain Inspectors, Packers and Stockyards Administration was forced to dramatically water down the 2010 GIPSA Rule because of a flood of negative comments, wider disparities between boxed-beef and live-cattle prices in recent years have prompted some in the industry to reconsider their opinions.
Industry experts say the fallout from two events — a 2019 packing plant fire in Holcomb, Kan., and supply disruptions from the COVID-19 pandemic — convinced many who had resisted talk of antitrust actions against meat packers Tyson Foods, JBS, Cargill and National Beef that some reforms to the beef pricing structure may be needed.
...The shifting sentiment is helping to fuel a flurry of legal, administrative and congressional efforts to address the pricing disparity.
A class-action lawsuit alleges the big four meat packers conspired to suppress the price of fed cattle and increase the price of beef. JBS announced in February that it had agreed to pay plaintiffs $52.5 million as part of a partial settlement.
At the National Cattlemen’s Beef Association’s urging, the USDA’s Packers and Stockyards Division has been investigating whether there was evidence of price manipulation, collusion or restrictions of competition by meat packers amid the supply disruptions in late 2019 and 2020.
USDA in 2021 began work on three proposed rules to support enforcement of the century-old Packers and Stockyards Act (PSA), which was originally designed to protect poultry, hog and cattle producers and address market concentration.
A bipartisan group of lawmakers led by U.S. Sen. Chuck Grassley, R-Iowa, has proposed the Cattle Price Discovery and Transparency Act, which would set minimum levels of cash-market purchases for packing companies and limit their ability to use alternative marketing formulas to set prices in advance. The bill was approved by the Senate Agriculture Committee in June and was headed to the floor.
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