Beef Pricing Bill Leaves Meatpackers ‘in Charge,’ Ranchers Say

Legislation aimed at bringing more competition to the cattle industry falls short of what small ranchers say they need to compete against big competitors.

Farmers say the measure (S. 4030) — which is opposed by meatpackers and has divided Republicans — doesn’t go far enough to break up the market concentration that’s edging them out of the industry.

Cattle producers and meatpacking CEOs testified before the House Agriculture Committee on Wednesday about alleged anti-competitive practices in cattle markets. Bipartisan lawmakers have said concentration in the meatpacking industry, where four big companies control 85% of the market, is to blame for high beef prices that surpass the general inflation rate.

Effort to Counter Big Beef Consolidation Divides Republicans

Photo: Frederic J. Brown/AFP via Getty Images

Beef cattle on a ranch on the outskirts of Delano, in California’s Central Valley, on Feb. 3, 2014.

Coy Young, a cattle farmer, lamented the state of the cattle industry as roughly 40 family cattle farms fold per day while meatpackers’ profits skyrocket. He told lawmakers the legislation wouldn’t be enough to address the problem.

Darvin Bentlage, a fourth-generation cattle farmer from Missouri, said the measure “leaves the packers in charge.” Bentlage, who’s been in the business for about 50 years, told Bloomberg Government doesn’t see the legislation as it’s written now fixing the gap between the prices consumers pay and the prices producers receive.

Southern Plains Cattle Industry Faces Hit Under Senate Measure

Bill Evolution

Earlier legislation Sen. Chuck Grassley (R-Iowa) introduced last year (S. 949), was better suited to address the problem, Bentlage said. It required at least 50% of a packer’s weekly livestock to be purchased through cash market sales. “That was a good bill,” he said. “That put the ball back in the court of the cattlemen so we could get a fair cash basis price.”

One of the witnesses at a Senate Agriculture Committee hearing on cattle pricing on Tuesday, fourth-generation rancher Shelly Ziesch, said the latest version of the measure, introduced by Sen. Deb Fischer (R-Neb.) and Grassley, “can’t hurt.”

While Fischer said her bill hits a sweet spot for boosting competition in the industry, not everyone was convinced. Sen. Cory Booker (D-N.J.) said the legislation doesn’t go far enough and he wants to make it stronger.

Rep. Randy Feenstra (R-Iowa) said Wednesday that he intends to lead the legislation in the House committee with Rep. Cindy Axne (D-Iowa). Feenstra said he feels confident in their ability to get support from both parties for the bill.

To contact the reporter on this story: Maeve Sheehey in Washington at msheehey@bloombergindustry.com

To contact the editor responsible for this story: Sarah Babbage at sbabbage@bgov.com