USDA releases report on boxed beef and fed cattle price investigation
The USDA released a report on its ongoing boxed beef and feed cattle price spread investigation Wednesday. The report was prepared by USDA’s Agricultural Marketing Service in coordination with the office of the chief economist. It summarizes market conditions, fed cattle prices, boxed beef values, and the spread before and after the fire and plant closure in Holcomb, Kansas. It also includes analysis before and during the COVID-19 pandemic.
“The closure of the Tyson beef packing plant in Holcomb, Kansas, after a fire at the facility, and the COVID-19 pandemic clearly disrupted the markets and processing systems responsible for the production and sale of U.S. beef,” says U.S. Secretary of Agriculture Sonny Perdue. “The report examines these economic disruptions and the significant increase in the spread between boxed beef and fed cattle prices that resulted from them. While we’re pleased to provide this update, we assure producers that our work continues in order to determine if there are any violations of the Packers and Stockyards Act. If any unfair practices are detected, we will take quick enforcement action.”
Wednesday’s report also discusses several policy considerations in light of the desire by many market participants for improved price discovery, reinvigorated competition, and a more transparent relationship between the prices for live cattle and the resulting products.
While the report does not examine potential violations of the Packers and Stockyards Act, USDA staff have maintained a cooperative relationship with the staff of the Department of Justice (DOJ) Antitrust Division and have discussed allegations of anticompetitive practices in the meat packing industry. Should USDA find a violation of the Packers and Stockyards Act, it is authorized to report the violation to DOJ for prosecution.