US Senators question meat packers’ surging profits during COVID-19
US Senators are calling for investigations of beef processors’ record profit margins after market shake up.
31 March 2020
2 minute read
According to reporting from Reuters, cattle ranchers are complaining that the skyrocketing meat prices due to coronavirus stockpiling aren’t translating into higher cattle prices. US Senators are calling for an investigation of meat packing giants like Tyson Foods and Cargill in response.
US cattle futures have fallen during the outbreak, worrying farmers, fuelling concerns about economic recession and calling the leadership of the CME into question.
Senator Chuck Grassley of Iowa tweeted that USDA, Department of Justice and Commodity Futures Trading Commission probes may be needed to determine why ranchers didn’t benefit from soaring meat demand.
"Beef is flying off grocery shelves but farmers are seeing prices go down," Grassley said. "If packers are illegally manipulating markets during crisis, we need USDA & DOJ & CFTC to investigate + help farmers. Four companies control 80 percent of market & they're taking advantage."
Processors’ margins climbed to more than $600 per head of cattle last week according to HedgersEdge.com. But cattle producers are operating at a net loss. Four US Senators from South Dakota, North Dakota and Montana sent a letter to the Justice Department, calling for an investigation into price-fixing.
Cargill said it is a committed buyer in the cash market for cattle, which was less impacted than futures. Tyson said it wants cattle producers to succeed and paid them a premium last week.
"This is an uncertain and unprecedented time, where food service beef demand has come to an immediate and virtual standstill, while retail demand has increased," Tyson said.
USDA said it was working with CFTC to ensure transparency and integrity in agricultural markets.
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