Ag Policy Blog

Calls for Cattle Investigation Among COVID-19 Updates

Chris Clayton
By  Chris Clayton , DTN Ag Policy Editor
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The price drop for live cattle but rise in boxed beef prices has gotten the attention of U.S. senators, who have requested the Department of Justice investigate. (DTN file image)

The cattle market situation has a South Dakota senator calling for both direct aid to cattle producers and a Department of Justice investigation into markets and packers.

Sen. Mike Rounds, R-S.D., held a conference call on Thursday to highlight problems with the cattle markets and concerns he has heard from producers in his state.

"We're at the point now many South Dakota ranching families are at the brink of going under," Rounds said. "(That) simply is not acceptable."

As DTN has reported, live cattle prices have fallen over $34.60 per cwt since the beginning of the year and, until Thursday, the April contract was basically hitting limit down several days in a row. At the same time, both choice and boxed beef prices saw dramatic jumps tied to the COVID-19 outbreak, with choice moving up $16.22 just last Monday alone.

Rounds, along with Sens. Kevin Cramer and John Hoeven of North Dakota, and Steve Daines of Montana sent a letter on Thursday to the Department of Justice urging the department to investigate continued allegations of price fixing in the cattle market, Rounds said. He pointed to the allegations made last summer after the Tyson Foods fire in Kansas, which led to a USDA investigation into cattle markets that has not been completed.

Rounds said the senators want the Department of Justice "to definitively answer whether a packer oligarchy exists within the cattle market and inherently creates an anti-competitive marketplace that unfairly disadvantages the cattle producer and the consumer."

Cattle producers are seeing record losses while the shelf prices of beef are record highs and boxed beef prices are increasing as well. "These margins just don't make any sense," Rounds said. "The reality is there is an inverse correlation between the producer's price and the consumer's price. We just want to know why."

Rounds added if the Department of Justice finds no violations, "then we must reconsider the statutory environment of this industry because the status quo simply is not working."

The South Dakota senator also introduced a bill this week for cattle producers to be included in a COVID-19 relief bill. The bill would direct the Secretary of Agriculture to use Commodity Credit Corp. funds to offset losses by cattle producers. The bill would use USDA baseline prices for 2020 for feeders and live cattle and match that with prices for cattle sold, based on the price collapse because of the COVID-19 disruption.

"There is no doubt our cattle producers are suffering right now as a direct result of the COVID-19 outbreak," Rounds said.

Rounds also sent a letter to President Donald Trump supporting reinstatement of mandatory Country-of-Origin Labeling. Since its repeal in 2015, beef and pork producers have seen increasing disadvantages marketing their products, Rounds said, while consumers are unable to differentiate between domestic and foreign meat products. The loopholes in labeling now allow foreign beef to be labeled as U.S. product, the senator noted. "We're asking the president to get involved. We're asking the president to help us solve this problem," Rounds said.

Ag Designated Critical Industry

The Department of Homeland Security on Thursday designated food and agriculture one of 16 critical sectors in the midst of the coronavirus crisis, and said that workers in those industries should stay on the job.

A coalition of farm groups had written President Trump on Wednesday urging him, as the government restricts movements to try to control the coronavirus, to be “mindful” of the needs of agriculture.

“With this year’s spring planting season upon us, we face not only the potential for weather and price-related challenges but new uncertainties,” the groups wrote.

In a memorandum, DHS said, “As the nation comes together to slow the spread of COVID-19, on March 16th, the president issued updated Coronavirus Guidance for America. This guidance states that: “If you work in a critical infrastructure industry, as defined by the Department of Homeland Security, such as healthcare services and pharmaceutical and food supply, you have a special responsibility to maintain your normal work schedule.”

“The Cybersecurity and Infrastructure Security Agency (CISA) executes the secretary of Homeland Security’s responsibilities as assigned under the Homeland Security Act of 2002 to provide strategic guidance, promote a national unity of effort, and coordinate the overall federal effort to ensure the security and resilience of the nation’s critical infrastructure,” the memo said.

“CISA uses trusted partnerships with both the public and private sectors to deliver infrastructure resilience assistance and guidance to a broad range of partners.

“In accordance with this mandate, and in collaboration with other federal agencies and the private sector, CISA developed an initial list of ‘Essential Critical Infrastructure Workers’ to help state and local officials as they work to protect their communities, while ensuring continuity of functions critical to public health and safety, as well as economic and national security.

“The list can also inform critical infrastructure community decision-making to determine the sectors, sub-sectors, segments, or critical functions that should continue normal operations, appropriately modified to account for Centers for Disease Control (CDC) workforce and customer protection guidance.

“The attached list identifies workers who conduct a range of operations and services that are essential to continued critical infrastructure viability, including staffing operations centers, maintaining and repairing critical infrastructure, operating call centers, working construction, and performing management functions, among others.

“The industries they support represent, but are not necessarily limited to, medical and healthcare, telecommunications, information technology systems, defense, food and agriculture, transportation and logistics, energy, water and wastewater, law enforcement, and public works.”

DHS noted, however, that the list is advisory. “It is not, nor should it be considered to be, a federal directive or standard in and of itself.”

“This action will help ensure that as we face this unprecedented crisis Americans will continue to be able to find nutritious food on store shelves," said Chuck Conner, president and CEO of the National Council of Farmer Cooperatives. "It provides much needed reassurance to our hardworking farmers as planting season gets underway. I’d also like to thank Secretary of Agriculture Sonny Perdue for his leadership and hard work on this issue."

The Department of Homeland Security memorandum:…

NSAC, Farmers Market Coalition Call for Aid

A report released today by the National Sustainable Agriculture Coalition said that key local and regional markets expect to see up to a $688.7 million decline in sales leading to a payroll decline of up to $103.3 million because of the shutdown in their markets.

The overall total loss to the economy could translate to $1.32 billion from March to May.

“NSAC continues to drive home the point on [Capitol] Hill that the stimulus plan needs to include measures targeted to small and medium-size farms, new and beginning farmers, and farms that rely on direct consumer sales during this crisis,” said Ferd Hoefner, a senior strategic adviser to NSAC.

“Without immediate mitigation, we may lose many small, socially disadvantaged, and beginning farms and the important markets they serve,” said the group of economists who wrote the report.

The Farmers Market Coalition on Tuesday said Congress should direct USDA to develop an emergency disaster payment to small and beginning farmers selling fresh and minimally processed food through direct marketing channels such as farmers markets that have been negatively impacted by the COVID-19 outbreak.

NCGA Task Force

The National Corn Growers Association on Thursday sent a notice to members that the group is forming a task for to provide recommendations on recovery and coordination along the value chain. NCGA also is commissioning an economic analysis for corn farmers as well.

"We’re in unchartered territory here, the economic impacts across all industries are likely to be massive and we encourage you to be patient as we come together to get through this challenging time," wrote Iowa farmer Kevin Ross, president of NCGA.

DTN Political Correspondent Jerry Hagstrom contributed to this report.

Chris Clayton can be reached at Chris

Follow him on Twitter @ChrisClaytonDTN



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