BILLINGS — The United States Department of Agriculture (USDA) started the rule-making process this summer for a law that was passed by Congress more than 100 years ago.
The agency recently released a report addressing competition in the beef industry. The “Interim Report: Competition and Fair Practices in Meat Merchanidsing,” states four beef packers harvested 81% of the nation’s beef in 2021.
It’s a troubling statistic for many ranchers who say it impacts their bottom lines.
“The very same conditions that existed back then, exist today,” said R-CALF USA C.E.O. Bill Bullard “We have a disparity in market power.”
When Congress passed the 1921 Packers and Stockyards Act, the USDA says five packers processed 82% of the nation’s beef and that legislation was aimed at addressing the market concentration.
“They wanted to eliminate the abuse of practices that were directed at independent producers in the industry,” Bullard said.
And now today little has changed.
In the report on page 2, the USDA states, “Retailers, distributors, and packers appear to be engaging in conduct that may violate the Act, such as through the use of unfair business practices and undue preference in pricing structures, fees, marketing decisions, and overall dominance at the expense of competition on the merits.”
This summer, the USDA proposed a new rule that has not yet been implemented. It essentially provides clearer tests and framework to allow the USDA to better enforce the Act and ensure competitive markets while also aiding ranchers.
“We’re very pleased with what Secretary Vilsack and USDA have come out as rules,” said Northern Plains Resource Council member Gilles Stockton. “And we’re looking forward to enforcement.”
The American Meat Institute opposes the proposed rule change arguing it attempts to circumvent Congress and the courts.
The Institute’s more than 80-member board includes representatives from the four biggest meat packers, JBS Foods, Cargill, National Beef, and Tyson Foods.
The Institute’s Chief Operating Officer and General Counsel, Mark Dopp, made a statement in a news release.
“Changing the harm to competition standard requires Congressional action,” Dopp said. “The proposal includes standards so vague that if adopted it would be impossible for a regulated entity to know how to comply.”
But ranchers like Stockton, who lives in Grass Range, disagree.
“What’s been happening in the cattle markets is not kosher, not legal,”
Stockton said.
He supports the battle that R-CALF USA, the Northern Plains Resource Council, and several other organizations are waging to try and make the market more competitive.
“The rules are necessary to balance the disparate market power between independent producers and multinational meat packers,” Bullard said.
