The USDA released a report on its investigation into disparities between prices paid to farmers and beef prices at grocery stores.
“We appreciate the USDA’s thorough examination of the beef markets. There’s little doubt that something is wrong when consumers are paying higher prices for meat and at the same time America’s farmers and ranchers are being paid less,” said American Farm Bureau President Zippy Duvall. “We are pleased the USDA responded to our call for an investigation, but it’s important to note the scrutiny of the markets is not concluded. USDA indicates their examination continues and investigations by the Commodity Futures Trading Commission, as well as the Department of Justice, are ongoing. We are reviewing the policy recommendations the USDA put forth in the report and look forward to working with them and Congress to ensure markets remain fair for everyone involved.”
A summary of the USDA report by AFBF noted:
The market reaction following both the packing plant fire and the supply chain issues brought on by COVID-19 put many cattle producers at a significant disadvantage. USDA’s report outlines the market conditions before, during and after these events through an economic lens and discusses their ramifications. This report goes beyond analyzing the market reaction to these events to examine other responses, including policy actions proposed by industry groups and steps Congress could take to allow USDA more leverage in conducting investigations and enforcing laws.
This report does not include any details from the investigation into potential violations of the PSA, as that investigation is ongoing and AMS is limited in its ability to publicly report the full scope and status of the investigation.
USDA stands ready to assist stakeholders and policymakers as the industry continues to explore options to improve price discovery and level the playing field between producers who were harmed and large meatpackers who benefited by the market reactions following these unforeseen and extreme events.
The full summary by AFBF can be found here.
The full USDA Boxed Beef & Fed Cattle Price Spread Investigation Report can be found here.