Eleven state attorneys general sent a letter to United States Attorney General William Barr asking him to address antitrust concerns in the meatpacking industry, alleging anticompetitive practices. Four beef processors control 80 percent of the market, including Tyson Foods, Cargill, JBS, and Smithfield Foods.
“In this highly concentrated industry, meat packers have achieved sizeable profit margins. Cattle ranchers, however, who for generations have supplied our nation’s beef, are squeezed and often struggle to survive,” the letter states. “With such high concentration and the threat of increasing consolidation, we have concerns that beef processors are well positioned to coordinate their behavior and create a bottleneck in the cattle industry—to the detriment of ranchers and consumers alike.”
The letter was signed by the attorneys general from midwestern and western states including North Dakota, Colorado, Missouri, Montana, Arizona, Idaho, Iowa, Minnesota, Nebraska, South Dakota, and Wyoming. They claim companies are providing “artificially low” prices to farmers and ranchers and inflating prices to consumers. They said the gap between the price of cattle and retail price is a sign that there is no competition in the market, noting a recent decline in the price of live cattle while consumer demand remains high.
“As fellow antitrust enforcers with our own independent authority to enforce State and federal antitrust laws, we are eager to work with you on a careful examination of the competitive dynamics of this industry,” the attorneys general told Barr. “Given the concentrated market structure of the beef industry, it may be particularly susceptible to market manipulation, particularly during times of food insecurity, such as the current COVID-19 crisis.”
They asked for a “thorough examination” of the competition in the meatpacking industry and regulatory strategies if the examination does not prompt other action. They claim the Department of Justice is better suited to deal with the situation than individual states, but offered support.
The attorneys general said during the COVID-19 pandemic and related economic struggles it is important to promote competition and protect consumers because the coordinated behavior could have “greater toll”, however, antitrust concerns in the cattle market are not new and will continue after the crisis.