DOJ Subpoenas Four Biggest Meatpackers in Antitrust Probe>High Meat Prices Explained

As some know I raise grass feed stock with daily supplements of registered protein cattle cubes,produced at a mill less than 50 miles away, this all US product is used to aid the cow/calf pair to grow and produce an acceptable grade of beef for general consumption. My operation is totally dependent of other producers of Hay and supplements within One (1) county as well as a worming block used as described on the label USDA approved and removed from the feeding area 14 days before going to auction.

This started as a way to provide a public service because I sure don't make much for my time and investment.
I have been holding off going to the auction barn because cattle prices are so low and yet meat Market prices are high.
Item here explains what all of us know.

Business
DOJ Subpoenas Four Biggest Meatpackers in Antitrust Probe
By
David McLaughlin
June 4, 2020, 4:33 PM CDT Updated on June 4, 2020, 6:19 PM CDT

• Justice Department has discussed inquiry with state AGs
• Information demands follow indictment of Pilgrim’s Pride CEO

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TSN
TYSON FOODS-A
64.92
USD
+0.85+1.33%
JBSS3
JBS
20.95
BRL
-0.52-2.42%
PPC
PILGRIM'S PRIDE
18.46
USD
-0.08-0.40%
FC1
Generic 1st 'FC' Future
134.18
USd/lb.
-0.55-0.41%
The Justice Department is formally demanding information from the country’s four biggest meatpackers over potential antitrust violations, according to a person familiar with the matter, deepening scrutiny of an industry that’s been riled by shutdowns due to the coronavirus.

The department’s antitrust division sent civil investigative demands, which are akin to subpoenas, to the companies and is talking with state attorneys general about the probe after a group of states called for an investigation, said the person, who declined to be named because the inquiry is confidential.

Meatpacking is highly consolidated with four companies -- Tyson Foods Inc., JBS SA, Cargill Inc. and National Beef Inc. -- controlling more than 80% of the U.S. beef processing market. Their dominance has sparked longstanding concerns about their pricing power over livestock suppliers. The companies didn’t immediately respond to requests for comment.

Meatpacking Giants Face U.S. Antitrust Inquiry Amid Shutdowns

National Beef, based in Kansas City, Missouri, confirmed receiving a civil investigative demand from the Justice Department.


“The request was very narrow in scope, which leads us to believe that the DOJ does not necessarily believe there is an antitrust issue,” the company said.

Tyson, JBS and Cargill didn’t respond to a request for comment.

The Justice Department subpoenas to the meatpackers follow criminal charges Wednesday against four current and former executives of chicken processing companies, including the chief executive of Pilgrim’s Pride Corp., America’s second-biggest chicken producer. Prosecutors say the executives conspired with one another to fix prices for chicken sold to grocery stores and fast-food chains.

The U.S. is grappling with a meat crisis after the coronavirus pandemic sickened thousands of workers at slaughterhouses and forced plants to close. The producers have such a stranglehold on output that even a few closures create bottlenecks that ripple through the supply chain.

The disruptions led to meat shortages and higher prices, prompting President Donald Trump to sign an executive order to keep plants running. While companies have taken measures to protect workers such as increasing hand-washing stations, distributing face shields and doing temperature checks, experts and unions warn that employees are still being put in harm’s way in the name of food security as packers seek to boost output.

Scared and Sick, U.S. Meat Workers Crowd Into Reopened Plants

The plant shutdowns sparked calls from states and lawmakers on Capitol Hill for an investigation of the industry. In May, a bipartisan group of attorneys general wrote to Attorney General Bill Barr, complaining there are signs the beef processors are using their power to drive down prices paid to cattle ranchers while consumers pay inflated prices.

“With such high concentration and the threat of increasing consolidation, we have concerns that beef processors are well positioned to coordinate their behavior and create a bottleneck in the cattle industry—to the detriment of ranchers and consumers alike,” they said.


A spokeswoman for the Nebraska Attorney General’s office, which signed on to the letter, declined to comment about the Justice Department investigation. Representatives for the attorneys general of Colorado and Iowa, which also joined it, didn’t respond to requests for comment.

 

Meat may become an unaffordable luxury in my lifetime.

Perhaps we shouldn't have worried about the Green "New Deal" and instead, worried about plain old corruption at the CEO level of mega-corporation.

CargilAg Corp is a vertically integrated ag/processing/transport and finance outfit, that screws people world-wide.
Thier screed (Provider of food, agriculture, financial and industrial products and services to the world. | Cargill)

Based in Wayzata (Minnitonka) MN, they reach all over the planet.

Cargill, Incorporated is an American privately held, multinational corporation based in Minnetonka, Minnesota. ... Cargill also operates a large financial services arm, which manages financial risks in the commodity markets for the company.

A less flattering look at the largest privately held Corp in the US - Cargill - Wikipedia

You may remember my story "My New Best Fried" where AgCorps had become the defacto controllers of all food.
production. Cargil was the model I used for the story....

Cargil is not alone in the MegaCorp universe. It's just that they control so much of the food farmed, produced, packed, shipped and distributed...

Cargill is the largest private company in the United States. Since its founding in 1865 by William W. Cargill, the company has maintained its status as a private company mainly owned by family heirs. Cargill is one of the largest players in the agricultural, livestock, and processed foods markets. Through a series of acquisitions, Cargill grew from a single grain mill into a company generating more than $120 billion in annual revenue.

Other major players world-wide - some of the names you may know. Others may be a surprise....
Top Ten Agribusiness Companies in the World - Tharawat Magazine

support players:
Most Active Large Agribusiness Corporations In The AgTech Domain


Largest privately help corporations n the US
America’s Largest Private Companies

Keeping in mind this is Wiki (very left leaning)
Agriculture in the United States - Wikipedia
and
Corporate farming - Wikipedia

Pig farms, egg factories, and massive monocropping. Welcome to USAg inc.

You can find data on specific crops and related producers
Potatoes - R.D. Offutt Company

and finally - the new family farmer
Top 5 Farms with the Largest Acreage in the U.S.

largest landholders in the US
Land Report 100 Largest Landowners In The U.S. | The Land Report

this is a big deal as Mark Twain once noted, "Land is a good investment - they just aren't making it anymore...."

 

This is very interesting and will be more interesting on how it turns out. So, it seems one will be needing to raise their own beef and chickens in the near future if we want to continue to eat meat.

 

That may well be a fact!

If I remember correctly one of those plants is CCP owned.

 

Not just China

http://www.foodandpower.net/foreign-ownership/
https://www.provisioneronline.com/a...acking-industry-investment-invasion?v=preview
More foreign ownership of U.S. beef processors raises food safety concerns - Investigate Midwest

Kinda reminds me of when "Japan Inc." was buying up US property - only to sell at a loss later as they failed to manage it to profit/cultural mismatch of the largest type... I see a repeat as these folks just 'don't get' US Union types.

 

I think they should look into the fudge packers too. It's way too expensive.

 

(I am not going there.)

 

It would be quite interesting to see where this investigation leads to. In the end Lucy will have some explaining to do to Ricky.

 

Or buy from guys like me that take it one or three steps farther with your own private label, warehouse and direct to end consumer marketing strategies. Make A LOT more direct marketing to the end consumer than contract or Sale barn selling even after the processing overhead. Got real old real fast making pennies on the dollar selling to the brokers via contract or auction. That package of Fresh Side in the picture sold for $31.68 in 2018 $4.00 per pound $10.61 overhead and total cost to produce with $21.06 net profit. On a good run a confinement might see $40 per head net profit per hog and it is a volume game to make any money as a producer. 5,000 hogs at $40 per head net = $200,000. Small guy finishing 250 = $168,000 direct marketing. Drawback to direct marketing is you have to build a customer base, deal with people and be friendly to said people. But seeing more farms emulating what a few of us have been doing for decades. Most fall flat on their face because they produce a lot and forgot the build the customer base part and end up selling everything wholesale at a break even or loss level.

Personally I hope this investigation forces the big corps to pay more to the producers, and in turn jacks the meat prices in the stores up even higher. The Volume producers earn more, the consumer will get even higher prices and I can raise my prices considerably and still be lower cost than the grocery stores. And everyone wins..... except the consumer. The entire food industry works by paying the producers low, brokers, packing plants, distributors and retailers taking their % along the way and only the people not producing taking the lions share of the profits. I and others chose not to be a part of that system a long time ago and we have earned damn good livings legally but outside the conventional food system But hey to each their own, what do I know anyway

 

@Thunder5Ranch Dammit T5R! That was indeed my plan when you bought the property in Montana. I figured I would make one or two runs a year over to you but then you had to go and screw it all up deciding to stay at the old place. I just finished wiring the new garage for electric for an extra pair of freezers to accommodate the extra meat...of course there is a LONG wait on the freezers. There is not a good size freezer left anywhere within 300 miles of here. I know because I called every last store. I don't get them until end of July (if I even get them then) and I ordered them the end of April.

I got a buddy that does this but he even goes farther, I think South Dakota...but can't remember for sure.

 

Gotta be some affordable small guys closer to you. And after poking around........ ya'll got pretty thin pickins in MT Freezers are a problem, even refrigerators with freezers are a problem. Even a lag on commercial freezers. All of the sudden everyone is a farmer, rancher, prepper, gardener, do it yourselfer and apiary operator LOL. and a year from now Ebay and Craiglist is going to be flooded with all the stuff people discovered they really have no interest in using.