Attorneys General Say They Need Resources to Address Livestock Market Concentration

“For over a century, the Packers and Stockyards Act has served as an important tool to ensure fairness in livestock and poultry markets and protect the integrity of these markets,” the AGs said.

“Structural changes in these markets, including increased concentration and changes in sales and marketing, have practices producer viability, resulting in attrition, and reducing the number of producers participating in the livestock markets. We hope that with increased enforcement and government oversight, the promise of the Packers and Stockyards Act can be fulfilled and return competition to these vital American markets.”

The letter was signed by attorneys general from a wide geographical swath, including Idaho, South Dakota, Minnesota, Wyoming, Iowa, California, Delaware, Hawaii, Illinois, Maryland, Nevada, New Mexico, North Dakota, Oregon, Rhode Island and Utah.

The attorneys general said that because there are a few new entrants into the market and current market participants are expanding output, it shows the livestock markets are in “poor” health.

“Neither new entrants, nor existing participants have expanded output, including during periods in which demand for meat products is growing,” the AGs said.

In addition, the attorneys general asked USDA to consider investigating whether alternative marketing arrangements and vertical integration in livestock markets “distorts price discovery” and other market conditions.

“AMAs may appear to producers because, at least initially, they provide a premium, or ‘bump,’ over cash markets, but they do not provide a fixed price nor are they made publicly available for bidding by interested producers,” the AGs said in the letter.

Instead, they are exclusive offers to specific producers and tie directly to prices discovered through regional cash markets or other price indices, such as those provided by third-party data services that the packers and processors can influence, and even manipulate with coordinated efforts. This creates a problem for all producers.”

The attorneys general said while there is a need for market reforms, there is no “substitute for maintaining a vibrant and open spot market,” especially to the extent of the AMAs tie pricing to a cash market.

“Numerous regulators have a role to play in ensuring that agricultural markets are fair and competitive,” the AGs said.

“The DOJ (Department of Justice), FTC (Federal Trade Commission), and state attorneys general have enforcement authority under the nation’s antitrust laws, which due to the market concentration issues described above, are as important as ever. In addition to protecting competition In these markets, it is also important to ensure that the markets operate with integrity and are fair and equitable.”

Read the letter here: https://www.r-calfusa.com/….

Read more on DTN:

“Congress Looking Again at Cattle Markets, Comprehensively,” https://www.dtnpf.com/…

Todd Neeley can be reached at todd.neeley@dtn.com

Follow him on Twitter @DTNeeley

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