PHOENIX – Arizona and ten other states are urging the Department of Justice to investigate suspected national price fixing by meat packers in the cattle industry.
Attorneys General in Arizona, Colorado, Idaho, Iowa, Minnesota, Missouri, Montana, Nebraska, North Dakota, South Dakota, and Wyoming sent to U.S. Attorney General William Barr expressing concern over the likelihood of manipulation in the market for processed beef.
Arizona Attorney General Mark Brnovich and his colleagues believe the situation warrants a full federal investigation because the alleged anti-competitive conduct harms consumers and cattle ranchers across the United States.
According to the Arizona Attorney General’s Office, the four largest meat packing companies control more than 80% of the beef processing in the United States. Recent pricing margins have shown that cattle prices are low and continue to decline, whereas current shelf prices for packaged beef are exceptionally high.
The Attorneys General say concern over market manipulation has increased with beef prices reaching record levels as consumers purchase meat during the COVID-19 pandemic, but cattle prices remain low and are decreasing. The Attorneys General note that antitrust concerns about the cattle market are not new and that competition issues arising from agricultural markets existed before the COVID-19 pandemic and will persist long after.
The letter states: “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. During an economic downturn, such as that caused by the current pandemic, firms’ ability to harm American consumers through market manipulation and coordinated behavior exacts a greater toll, providing an additional reason for conducting a careful inquiry into this industry.”
The Attorneys General say the disparity between the price of live weight cattle and the retail cost of boxed beef sold to consumers is a sign of a market that lacks full and fair competition, potentially violating state and federal antitrust law. In addition to harming cattle producers, this potentially illegal practice hurts consumers nationwide, many of whom are struggling because of reduced or lost incomes.