Ag Policy Blog

The report that USDA issued Wednesday on problems in the cattle market following the fire in a meat plant in Holcomb, Kan., and volatility in the markets due to COVID-19 shows that Congress needs to act to increase transparency and competition among meat packers, Senate Agriculture Committee Chairman John Hoeven, R-N.D., told DTN.

Noting that he had signed onto a bill written by Senate Finance Committee Chairman Chuck Grassley, R-Iowa, that would require a minimum of 50% of a meat packer's weekly volume of beef slaughter be purchased on the open or spot market, Hoeven said in a news release, “Today's report from the USDA showcases the vulnerabilities of the cattle market and further underscores the need for more competition and transparency in the industry. That's exactly what this bipartisan bill will support, and it is part of our efforts to help ensure that our ranchers receive a fair price for their product. I appreciate the department for providing its input to help achieve these goals, and I will continue working with my Senate colleagues to find solutions.”

In the interview, Hoeven said that Agriculture Undersecretary for Marketing and Regulatory Programs Greg Ibach had briefed him on the report and that his staff is reading it, but he had not yet read it.

Ibach, he said, “really understands we have to do something besides having some reports.” With one meat company (JBS) owned by the Brazilians, another (Smithfield) owned by the Chinese and a total of four companies making up 85% of the market, “Congress is going to have to act on this,” Hoeven concluded.

Grassley has said that Senate Agriculture Committee Chairman Pat Roberts, R-Kan., is avoiding bringing up his bill.

In a statement late today, Roberts said, “I appreciate USDA's work on the long-awaited report on the cattle market volatility that followed the fire at a beef plant in Holcomb, Kan., nearly a year ago and the subsequent market volatility that has continued during the COVID-19 pandemic. While USDA didn't identify any findings of wrongdoing, they did provide some considerations for stakeholders to weigh. I welcome continued dialogue with cattle market participants to understand their perspectives from the report and how Congress and the administration can work with them to ensure market transparency.”

U.S. Cattlemen's Association President Brooke Miller noted in a statement today that on July 1, USCA and 12 other organizations sent a letter to Roberts requesting a hearing be held on the state of the U.S. cattle industry.

“It is simply unacceptable to be met with silence, while producers are asked to weather another year of declining farm and ranch income. Producer organizations have brought forth real, tangible marketplace solutions that are underscored in this report, and that deserve to be brought forward for discussion on Capitol Hill,” USCA said.

“The top-line considerations detailed in this report provide a roadmap for returning transparency and true price discovery in the cattle marketplace. USCA has long since advocated for making these changes through the reauthorization of Livestock Mandatory Reporting (LMR), a program which is due to expire on September 30, 2020,” Miller said.

National Farmers Union President Rob Larew said, “We appreciate USDA's efforts to examine this issue and present potential solutions, but it is clear that this is just the beginning; now, like 100 years ago, radical and immediate action is needed to create a fair and balanced food system. The agency must thoroughly conduct its ongoing investigation, for which we intend to hold them to account. Additionally, we urge legislators, USDA, and other federal agencies to strengthen protections for farmers, enforce existing antitrust regulations, and prevent undue market power in the future.”

The full report can be viewed at https://www.ams.usda.gov/…

Jerry Hagstrom can be reached at jhagstrom@nationaljournal.com

Follow him on Twitter @hagstromreport

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