Bipartisan legislation in the U.S. Senate to better regulate the meatpacking industry is designed to keep large agricultural corporations from gouging both farmers and consumers, sponsors say.
“We’ve got consumers going to the meat counters saying they’re paying through the nose for meat prices. And then you’ve got the national beef corporations – Tyson, Cargill, JBS – that are making record profits,” said Montana Senator Jon Tester (D) in a telephone interview with the Daily Yonder.
“The system isn’t working when you have that kind of situation where the consumers are getting hit hard and the folks that are on the ground in rural America aren’t getting a fair return for their products.”
Tester is co-leader of two bills – the Meat Packing and Special Investigator Act and the Cattle Price Discovery and Transparency Act – that seek to strengthen competition standards set by the Packers & Stockyards Act of 1921. Poor enforcement of these standards has led to overpowered corporate control in the meat industry, critics say.
“The meatpacking industry is more consolidated today than it was in 1921,” Tester said. “[Consolidation] doesn’t necessarily have to be a bad thing. It becomes a bad thing when you’ve got cow-calf operators, small and medium-sized feeders who say ‘we’re going broke.’
The Meat Packing and Special Investigator Act would set up an office in the U.S. Department of Agriculture to employ a team of investigators to keep tabs on the meat industry for anticompetitive practices.
Senators Chuck Grassley (R-Iowa) and Mike Rounds (R-South Dakota) are cosponsors on the bill, along with four other Republicans and six Democrats.
The Cattle Price Discovery and Transparency Act would set a mandatory minimum threshold for cash prices of fed cattle – cattle leaving a feedlot – that are sent to large meatpackers. It also includes transparency measures for information related to cattle sales.
Senator Deb Fischer (R-Nebraska) is the bill’s sponsor. Besides Tester, the bill’s cosponsors number nine Democrats (including Ron Wyden of Oregon) and nine Republicans (including Chuck Grassley of Iowa).
These bills come at a time when the number of independent cattle producers in the U.S. has significantly shrunk. According to USDA census data compiled by Investigate Midwest, in the past quarter-century, the number of cattle ranches has declined by more than 25%. In 2017, big cattle operations accounted for just 10% of ranches but owned more than half the cattle in the U.S. For rural America, the loss of small cattle producers is one of the factors that have caused rural population loss and economic decline.
“I grew up in a small town that had 160 kids in my school; 42 people in my graduating class,” Tester said. “Now, there’s 42 kids in the entire high school.”
Tester grew up near Big Sandy, Montana, a vast rural area where there seems to be no end to the big skies and wide-open spaces. Tester said the decrease in Big Sandy’s population over the past 50 years is due to a number of factors, including climate change, cattle market challenges, and pressure on small ranchers to either get big or get out.
“If somebody wants to sell their farm, I can’t do anything about that. They can do whatever they want,” Tester said. “But if they’re selling it because the marketplace isn’t fair, as it is in the cattle industry now, I think it’s incumbent upon us to at least put up some sideboards and make it so capitalism works.”
In many states, money that goes into production agriculture like beef, pulse crops, or grains gets recycled through the economy many times, according to Tester.
“Farmers and ranchers are known for spending money if they got it,” Tester said. “If they don’t have it, they don’t spend.” Making sure people get a fair price for their product is one way to bolster the economy in rural areas, he said.
Both the Meat Packing and Special Investigator Act and the Cattle Price Discovery and Transparency Act are scheduled to be released from the committee the week of June 6, at which point a committee vote will be scheduled. If passed, the bills will then move on to the Senate.