Best Blog of the Week

The email inbox can offer some fascinating analogies from within any given industry, but the cattle and packing industries tend to provide some contrasts almost daily.

The North American Meat Institute and the Ranchers-Cattlemen Action Legal Fund United Stockgrowers of America each issued news releases offering a separate but equal debate about the state of complaints about cattle prices and what consumers pay. NAMI was responding to Ag Secretary Tom Vilsack and R-CALF was responding to a judge's ruling.

We start Tuesday with the North American Meat Institute (NAMI), which isn't happy with Agriculture Secretary Tom Vilsack. NAMI sent Vilsack a letter informing him that his "transparent attempts to scapegoat the meat and poultry industry to shift blame for inflationary prices will not help consumers."

NAMI's letter was sparked by the secretary's visit to the White House last week to talk about challenges with livestock markets and resiliency in the packing industry. Vilsack made comments at the White House press podium about cattle producers losing money while packers made record profits. (https://www.dtnpf.com/…)

"The Administration cannot ignore the fundamental principles of supply and demand," said Anna Potts, president and CEO of NAMI. "Americans are experiencing firsthand what the Secretary refuses to acknowledge, the effects of COVID and lack of labor are hurting consumers, and nothing proposed by the Secretary of Agriculture on the structure of the meat and poultry industry will help families struggling to pay for groceries."

NAMI pointed out that the group represents 350 packing and processing companies, which account for more than 95% of U.S. meat and poultry production. NAMI cites that the pandemic "may be the ultimate black swan event. But its occurrence does not automatically mean the system is broken or needs to be torn down and rebuilt. Nor does the fact that the industry has changed, and changed significantly over the past few decades mean it has changed for the worse. The pandemic seems to be the vehicle spawning new bad ideas, and resurrecting other bad ideas, seemingly without recognizing economic realities and unintended consequences. Indeed, none of the proposals advanced at the press briefing will alleviate the consumer price increases the administration seeks to address."

Letting Vilsack know the group's dissatisfaction with his White House performance, NAMI cited complaints about how the White House used inflation numbers to make the cast that change is needed in the industry. The group cited data from the Economic Research Service and pointed out its own meetings with the White House to point out, "not once in any meeting did White House or USDA staff suggest consumer prices were rising because of industry structure."

NAMI's letter to Vilsack seemed to repeat a lot of the statements the group made responding to USDA in late August to spend $500 million in funds for livestock and poultry processors. (https://www.dtnpf.com/…) NAMI's full letter can be found here: https://www.meatinstitute.org/….

A little later in the day came a news release from those rebellious cow-calf guys out in Billings, Mont., the Ranchers-Cattlemen Action Legal Fund United Stockgrowers of America (R-CALF USA). R-CALF won a court ruling Tuesday, against the packers. A U.S. District judge in Minnesota issued an order denying a motion by the nation's four largest beef packers to dismiss R-CALF's class-action case against the packers filed in April 2019.

U.S. District Judge John Tunheim ruled that the 20 ranchers listed as plaintiffs in the case, including R-CALF "have plausibly plead that defendants conspired to suppress the price of fed cattle and increase the price of beef." Tunheim basically concluded there was enough evidence presented against the packers here that the case can move forward.

R-CALF's antitrust case alleges the Big 4 (packers) violated the Sherman Antitrust Act of 1890 by engaging in a price-fixing conspiracy. It also alleges the Big 4 violated the Packers and Stockyards Act as well as the Commodity Exchange Act, R-CALF stated.

The lawsuit is against JBS USA, Tyson Foods, Cargill Inc., and National Beef Packing Co.

Tunheim's ruling, which is restricted from full viewing in online federal court records, shows the judge ruled on roughly two dozen motions, most of which Tunheim denied. Most of the motions were motions to dismiss by the individual packers.

Resulting from the order, the cattle antitrust case against the packers will now proceed with discovery in the case so R-CALF and the other plaintiffs can test their claims.

Chris Clayton can be reached at Chris.Clayton@dtn.com

Follow him on Twitter @ChrisClaytonDTN

(c) Copyright 2021 DTN, LLC. All rights reserved.