OKLAHOMA CITY—Gov. Kevin Stitt and Oklahoma Sec. of Agriculture Blayne Arthur penned a joint letter to U.S. Attorney General Merrick Garland May 21. The letter expresses support for the ongoing U.S. Dept. of Justice antitrust investigation into the U.S. meatpacking industry. The letter deems the investigation necessary “to determine if any manipulation, collusion, or other illegal activity may be occurring and ensure market transparency.”
“We are extremely grateful to Gov. Stitt and Sec. Arthur for recognizing the potential for antitrust behavior in the beef industry and calling upon the U.S. Attorney General to continue to take action,” said American Farmers & Ranchers (AFR) Cooperative President Scott Blubaugh. “Oklahoma ranchers have been begging for relief from a dysfunctional marketplace. Once again, Gov. Stitt has shown he is in touch with our state’s ranchers and is listening to our concerns.”
The joint letter penned to U.S. Attorney General Merrick Garland specifically expresses concern over the substantial margins between live cattle and retail beef prices that have widened in recent years, the historic level of consolidation in the meat packing sector, and the minimal level of competition in the marketplace.
The letter states: “If any market manipulation does exist, it is vital for the continuation of the American beef industry that it be identified and fairness in the market be restored.”
“The independent ranchers of our country just want a place in their own industry,” said Blubaugh. “In fact, their very existence hinges on marketplace reform. Gov. Stitt is an entrepreneurial businessman and he certainly recognizes grit. Oklahoma ranchers have a lot of grit; we just need someone to stand on our side.”
The letter to Attorney General Garland addresses a major issue effecting the economic health of one of rural Oklahoma’s largest economic drivers—the beef industry. Ranchers have worried about the gradual consolidation of the meat packing industry for decades, as they have found it increasingly difficult, and sometimes impossible, to conduct business in the black.
“If we lose our independent ranchers, so goes a stable supply of competitively-priced beef for American consumers,” said Blubaugh. “Gov. Stitt clearly recognizes the severity of the situation. This letter is a vote of support for both ranchers and consumers and I could not be more pleased. Thank you, Gov. Stitt and Sec. Arthur, for recognition of the cattle market situation and the vote of support for our industry.”
Gov. Stitt and Sec. Arthur join a growing nationwide chorus of congressional and government leaders calling for further investigation into potential manipulation in the U.S. beef industry. In May 2021 alone, at least 18 members of Congress urged Attorney General Garland to further investigate anticompetitive behavior in the industry.
Today, four meatpackers control more than 80 percent of beef slaughter in the U.S. These “Big Four” companies control such a large percent of the domestic slaughter and processing capacity, they are well positioned to influence the price of both live cattle and retail beef. While concern over consolidation has hovered for decades, market manipulation in the beef industry has been at the forefront of discussion in the last two years.
Two significant market-disrupting events—an August 2019 Tyson processing plant fire and the 2020 Coronavirus processing plant closures—resulted in record-setting price disparity between live cattle and retail beef prices. Ranchers took significant losses on their cattle, consumers paid inflated prices at the grocery store and large meatpackers benefited in between.
In light of this spotlight, both the 2020 and 2021 AFR Cooperative Legislative Policy Special Orders of Business include a demand for proper enforcement of the Packers and Stockyards Act: “We demand the enforcement of the Packers and Stockyards Act in regard to the anti-trust issues surrounding the packing segment of the beef industry in the United States.”
“Lack of competition in the beef industry has led to an outcry over cattle market issues that is now at a fever pitch,” said Blubaugh. “Our cattlemen and cattlewomen have endured incredible adversity over the past few years. Continual market volatility has taken a toll on our industry and producers need to see action on this issue. Whether or not wrongdoing is discovered, our producers deserve to have their concerns answered. A Dept. of Justice beef antitrust investigation is more than welcome and, in my opinion, results can’t come soon enough.”
As a representative of National Farmers Union and AFR Cooperative and a rancher himself, Blubaugh has become increasingly involved in the cattle market concentration issue. He was one of only 24 people nationwide to participate in a cattle industry summit May 10 in Phoenix, Ariz. The summit convened representatives from six major cattle and rancher industry groups in an effort to find common ground.
“Our nation’s ranchers have become increasingly more desperate for a fair and transparent marketplace and I believe everyone in the room understood that,” Blubaugh said of the summit. “The meeting brought all sides of the cattle business together to work toward solutions. We all know what’s on the line.”
According to a joint press statement, the group reached consensus on three action items to move forward the fight for a more fair cattle market, including a demand that “the Department of Justice issue a public investigation status report and as warranted, conduct joint DOJ and USDA oversight of packer activity moving forward.”
AFR Cooperative is a membership services organization established in 1905 as Oklahoma Farmers Union. AFR provides educational, legislative and cooperative programs across the state and serves as a watchdog for Oklahoma’s family farmers and ranchers and rural communities. The organization is actively supportive of the state’s agricultural industry and rural population with membership consisting of farmers actively involved in production agriculture and non-farmers adding their voice in support of AFR/OFU principles.