It’s about time. Beef Producers have been defending their soaring prices with vague economic ref-erences. Now, the US Justice Department is taking affirmative action. The DOJ has launched an antitrust investigation into the US Beef industry…
A luxurious and plentiful supermarket beef showcase – from before the food price crisis…
Time for action
The DOJ is launching a full-scale investigation into the industry, leveraging, “every law enforcement tool available to help reduce food prices.” It certainly sounds like a serious commitment…
What’s happening
The conventional story goes something like this…
Ranchers have been reducing the size of their herds in the face of rising costs to raise cattle. That’s caused the worst beef shortage in 75 years.
But the shortage has, in turn, caused prices to soar, encouraging ranchers to rebuild their herds. Alas… It takes 3 to 5 years to rebuild a cattle herd.
The anti-trust angle
The DOJ has focused on consolidation in the beef sector. Four mega-firms control 85 percent of beef processing: JBS, Cargill, Tyson and National Beef. Federal lawmakers have floated bills or conducted investigations designed to encourage competition. The rationale being that prices would come down if ranchers had more options for selling their cattle.
“These companies now have an unprecedented ability to wield market power and influence prices paid for cattle – definitely more so than if we had greater competition,” Agriculture Secretary Brooke Rollins said during a press conference.
Not the first attempt
The Biden administration also issued an executive order to address consolidation in the meatpacking industry. But commerce and industry crony-in-chief Donald Trump overturned that measure last fall.
So, it’s a little baffling why the Trump DOJ should want to take on the Beef Industry head to head now. My guess is that the food prices as a whole – with beef leading the parade – has finally become an issue Trump fears is damaging his image – and possibly turning-off voters.
My take
It’s well past time that the US government stepped into the beef market and mandated some changes. But it’s instructive to note that it’s not only the beef producers who are under scrutiny for anti-trust activities. A 2023 DOJ lawsuit claimed that an agricultural statistics-gathering company had made available to poultry and pork producers information that allowed them to manipulate the market.
We’ll have to wait months, or perhaps even year, to see how successful the DOJ’s beef industry probe will be…
~ Maggie J.