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The Department of Justice has opened a criminal investigation into the four largest beef processors in the US over allegations of price fixing and market manipulation.
Some shit you should know before you dig in: If you’re unaware, four major companies (Tyson Foods, Cargill, JBS, and National Beef) control roughly 85% of all US beef processing, giving them enormous leverage over both the ranchers who sell them cattle and the consumers who buy the end product. Retail beef prices have climbed to record highs, with ground beef selling for almost $7.00 per pound last month, about 20% higher than a year ago. On top of that, the national cattle herd hasn’t been this small since 1951, driven largely by years of severe drought that forced ranchers to sell off livestock, and climbing expenses on everything from grain to diesel to wages have made it even harder to rebuild. Despite the tight cattle supply (which by basic economics should drive up what ranchers get paid), some producers say they aren’t seeing the benefit, claiming the benchmark pricing used in contracts with processors is being manipulated. Earlier this year, Tyson and Cargill settled a multistate price-fixing class action for $87.5 million covering claims brought in more than 24 states.
What’s going on now: The DOJ’s antitrust division is investigating whether the four companies colluded to suppress the prices paid to ranchers for live cattle while simultaneously raising what consumers pay for processed beef. Trump first called for the investigation in November, accusing the meatpacking industry of “illicit collusion, price fixing, and price manipulation.”
Texas Agriculture Commissioner Sid Miller came out in strong support of the investigation, calling it long overdue. In a statement, he said, “I am glad to see the Trump administration take a hard look at the meatpacking industry and make sure America’s ranchers, and the families who depend on them, are finally getting a fair deal. Just four dominant companies process roughly 85% of America’s beef supply, and that level of consolidation demands scrutiny when American families are paying record prices at the grocery store and ranchers are fighting for fair value.”
As of now, none of the four companies have responded to requests for comment.
