U.S. Sen. John Thune (R-S.D.) today called on the Senate Judiciary Committee to hold a hearing on the possible improper and anti-competitive activity in the cattle market. Thune also spoke on the Senate floor about his ongoing effort to press the Department of Justice to investigate this potentially uncompetitive behavior. He recently encouraged Attorney General Merrick Garland to make this investigation a priority so ranchers and consumers can learn more about how this is affecting cattle prices and prices at grocery stores across the country. Thune noted that while the Justice Department agreed to start an investigation following an earlier request, it hasn’t shown any indication that the investigation is ongoing, nor has it released any results to the public.
Click here for the full text of Thune’s letter to Senate Judiciary Committee Chair Dick Durbin (D-Ill.).
Thune’s remarks below (as prepared for delivery):
“Mr. President, before I begin, I want to say that I was saddened to hear of the death of former Senator John Warner.
“A veteran of both World War II and the Korean War, he faithfully served the people of Virginia here in the Senate for three decades and built an enduring legacy.
“My thoughts and prayers are with his wife Jeanne and all of his family.
“Mr. President, the last several years have been difficult ones for cattle producers in my home state of South Dakota and around the country.
“A 2019 fire, and later COVID, caused reductions in meatpacking capacity, which left cattle producers with cattle to sell and no place to sell them.
“And even now, with our country well on its way to full reopening, meatpackers are still not back to full capacity – at least in part, it seems, because the enhanced unemployment benefits the Biden administration is providing are not encouraging workers to come back to work.
“Throughout these challenges, ranchers have struggled.
“But meatpackers have seen continued substantial profit margins.
“While certainly market forces can see the price for cattle fluctuate, the gap between meatpacker profits and rancher profits raises some questions – most especially because more than 80 percent of the meatpacking market in this country is concentrated in the hands of just four companies.
“That level of concentration creates the opportunity for market manipulation.
“The gulf between rancher and meatpacker profits and the significant power these companies have over the beef industry has raised concerns that we’re looking at something more than just an issue of supply and demand.
“That’s why I wrote to the Department of Justice at the beginning of the pandemic urging the department to begin an investigation into the meatpacking industry to make sure that there was no market manipulation going on.
“And the Department of Justice responded by directing the Justice Department’s Antitrust Division to initiate an investigation.
“That was a year ago, Mr. President.
“And since then, we’ve heard nothing.
“No results from the investigation have been released, and it’s not clear whether the investigation is still ongoing.
“And so last week I led several of my Senate and House colleagues, along with South Dakota Representative Dusty Johnson, in a letter to Attorney General Merrick Garland urging the Department of Justice to continue investigating the beef sector to determine if improper and anticompetitive activity has occurred.
“It is essential that we hold the highly concentrated meatpacker industry accountable to the consumers and producers who depend on it.
“And I will continue to press the Department of Justice to thoroughly investigate this situation.
“Mr. President, another important thing we can do to help ranchers start to see better prices for their cattle is to encourage competition in the meatpacking industry.
“As I said, more than 80 percent of the meatpacking industry in this country is controlled by just four companies.
“Encouraging more companies to get into this marketplace, and encouraging small meatpackers to expand, will dilute the power of these four companies and create more competition for ranchers’ cattle – which will lead to higher prices for ranchers when they bring their cattle to market.
“That’s why I introduced the Strengthening Local Processing Act in February with Senator Merkley.
“Our legislation would help strengthen and diversify national meat processing capacity by providing new resources for smaller, more local meat processing operations.
“Encouraging new meatpackers to enter the market and smaller meatpackers to expand their operations will provide livestock producers with more marketing options and thus increase competition for their cattle.
“Plus, spreading out and expanding our nation’s meat processing capacity over more plants will make our nation’s meat supply less vulnerable to interruption in situations like the coronavirus pandemic or natural disasters.
“During the pandemic, outbreaks of COVID at meatpacking plants seriously compromised supply – as empty grocery store meat sections attested.
“Had meatpacking capacity been less concentrated, it’s likely that we would not have seen such significant shortages.
“Mr. President, last month, I requested that the Senate Agriculture Committee hold a hearing to consider the challenges facing the livestock industry as well as the bills that have been introduced this year to try to improve the situation.
“I recognize that there are contrasting views among cattle producers on the best path forward to improve the cattle market, but I am hopeful that a hearing would help lead to the passage of legislation that would improve the outlook for cattle producers.
“I also recently introduced, along with Senator Tester, an amendment to the legislation the Senate is considering today that would require the U.S. trade representative and the U.S. Department of Agriculture to review the 2015 World Trade Organization ruling that led to the repeal of mandatory country of origin labeling, or COOL, and identify how it affected U.S. consumers, producers, and the supply chain.
“If the review finds negative impacts, the amendment would require the administration to submit to Congress legislative or administrative actions to address the impacts.
“I am a longtime supporter of country of origin labeling, and I have been raising the importance of this issue with the Biden administration.
“And I will continue working on a path forward for COOL.
“There is strong demand for U.S.-born and raised beef, and consumers want to know where their food is coming from.
“The least we can do for our ranchers and the consumers who depend on their products is to provide them with the benefit and certainty of seeing “made in the USA” labels on grocery store shelves in South Dakota and around the country.
“Mr. President, I think I speak for a lot of Americans when I say there are few things I enjoy more than a mouthwatering burger or a really good steak.
“And there are a lot of men and women out there in South Dakota and across the country doing the demanding work of raising cattle so that the rest of us can enjoy our burgers and steaks and roasts.
“I’m very proud to represent South Dakota ranchers here in the Senate.
“And I will continue to make it a priority to support cattle producers and make sure they have fair and transparent markets for the commodities they produce.
“Mr. President, I yield the floor.”