USDA Release Study On Live Cattle And Box Beef Prices

WASHINGTON, D.C. – A study by the U.S. Agriculture Department into the disparity between cattle prices paid to ranchers and the higher prices earned by meat processors offers more details about the factors that have led to the situation.

The 20-page “Boxed Beef and Fed Cattle Price Spread Investigation” report began last fall on the economic impact to the cattle market following a 2019 fire at a Tyson Foods beef plant in Holcomb, Kansas.

It was expanded during this year’s temporary closure of slaughterhouses by the coronavirus pandemic, when ranchers saw cattle prices drop while concerns about meat scarcity caused prices at grocery stores to rise.

Some members of Congress have called for an investigation into possible violations of the Packers and Stockyard Act, which is designed to protect ranchers and consumers. One of those is Nebraska Republican Senator Deb Fischer, a Valentine-area rancher.

Fischer says she appreciates the USDA’s work on the investigation and that the analysis of what occurred underscores the immediate need for reforms to strengthen the cattle industry.

She also says the report confirms the serious misgivings of many about the factors that are working to destabilize the marketplace, adding that in light of these events and the report, she will be introducing legislation soon aimed at providing equity and transparency for all market participants.”

Ben Sasse, Nebraska’s other senator, had urged the Commodity Futures Trading Commission in April to review market volatility and the widening gap between live cattle and boxed beef prices. Sasse said after the release of the report that if the USDA needs more tools to quickly and properly respond to market disruptions, Congress must hold discussions on the issue.

National Cattlemen’s Beef Association Vice President of Government Affairs Ehtan Lane says the organization, its state affiliates, and cattle producers are still reviewing the report while also awaiting the results of the Justice Dept’s on-going investigation into the situation.

Lane says the information released this week will be very helpful and timely to the cattle industry’s robust discussion of cattle markets and price discovery during the NCBA Summer Business Meeting in Denver next week.

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