By Jennifer Dorsett
Field Editor

The U.S. House of Representatives Committee on Agriculture asked U.S. Secretary of Agriculture Sonny Perdue to launch a full-scale examination of the beef packing sector.

In a letter to Perdue earlier this month, House Agriculture Committee Chairman Collin Peterson (D-Minnesota) and Ranking Member Mike Conaway (R-Texas) said there are concerns about the vulnerability of the nation’s beef supply chain and the level of concentration in the industry.

The congressmen said Perdue has the authority to use policy research centers to investigate these issues.

“We are writing to request that the Office of the Chief Economist engage the policy research centers to address current issues and trends in cattle markets, including structure of the industry, price discovery and methods to address deficiencies, price reporting, purchasing mandates and barriers to entry in the packing sector,” the letter said.

Peterson and Conaway also asked that policy research centers provide an “in-depth description of today’s beef packing sector,” including answers to questions about how the sector became so concentrated, whether the current capacity is sufficient for growth and if policy options are available to increase price discovery.

In an interview with the Texas Farm Bureau (TFB) Radio Network, Conaway said he and other lawmakers, as well as their constituents, would like to have more information on the issue surrounding beef packers.

“There is a lot of turmoil in the market, a lot of suspicions and a lot of information that may or may not be accurate. We want to try to get as many facts on the table as we can. Having some experts look into things seems like a good idea to help address some of these issues,” Conaway said. “Whether there’s anything going on that should not be going on, or if it’s just normal supply-and-demand reactions that are going on, the idea is to help all packers and producers and everyone to have a level playing field in terms of what’s happening.”

Ranchers across Texas and the U.S. were hit hard by COVID-19 this spring. Slowdowns and shutdowns at meat processing plants led to bottlenecks at feedyards and packing houses, drastically dropping cattle prices even as boxed beef prices rose to unprecedented levels.

“Every producer out there believes the packers have an advantage over them in the marketplace, and getting the broad study that we want done will help answer some of those questions,” Conaway said. “And if that’s the case, then we’ll take steps. If it’s not, is there competition available in the packer industry that is currently not there? Are there barriers to that new competition coming in that we could address, as well? There may not be anything wrong at all other than that you just haven’t had anybody who wants to invest in packing plants, but there may be something going on. We think that this study will answer those questions.”

Many ranchers in Texas with those same questions are eager to see this study on beef packers move forward, according to TFB National Legislative Director Laramie Adams.

“Texas Farm Bureau has had discussions with our Congressional leaders about beef industry issues, especially lately since some of those issues were highlighted through the pandemic,” Adams said. “We’ll keep pressing to try to find some solutions for Texas ranchers who were tremendously affected by the impact COVID-19 had on the beef supply chain.”

Adams noted TFB is also a member of the American Farm Bureau Federation (AFBF) cattle working group, which is exploring some of those issues on a national scale.

“Our members were severely impacted by having to sell their livestock at very low prices or the complete inability to sell their livestock due to the pandemic,” he said. “We’re working with our lawmakers and other industry representatives to see what can be done to help in the future. Americans depend on the entire food supply chain for that safe, reliable food supply, but it starts on farms and ranches across the nation.”