In the wake of President Obama’s campaign promise to prevent anticompetitive behavior against family farmers and ranchers, the U.S. Department of Agriculture (USDA) and the U.S. Department of Justice (Justice) today announced that both Departments will work together to accomplish this important goal.

::::::::

Washington, D.C. In the wake of President Obama’s campaign promise to prevent anti-competitive behavior against family farmers and ranchers, the U.S. Department of Agriculture (USDA) and the U.S. Department of Justice (Justice) today announced that both Departments will work together to accomplish this important goal.

The agencies’ joint news release states, “the U.S. Department of Agriculture (USDA) and the Department of Justice will hold joint public workshops to explore competition issues affecting the agriculture industry in the 21^st century and the appropriate role for antitrust and regulatory enforcement in that industry.”

This announcement came less than a week after R-CALFUSA met in Washington, D.C., with numerous officials from Justice’s antitrust division and with USDA’s Grain Inspection, Packers and Stockyards Administration (GIPSA) Administrator. 

“During that meeting, R-CALFUSA delivered a 61-page presentation demonstrating that the U.S. cattle market is suffering from antitrust activities and anticompetitive practices by the highly concentrated beef packing industry,” said R-CALFUSA CEO Bill Bullard. “We provided charts and graphs that demonstrate the entire U.S. livestock industry is in a severe state of crisis, including 12 specific examples demonstrating market failure in the U.S. cattle market.”

These 12 examples include: 

1) a disconnect between cattle prices and beef prices;

2) an increasing price spread between ranch gate prices and wholesale prices, as well as ranch gate prices and retail prices;

3) a shrinking number of U.S. cattle operations while domestic beef consumption keeps increasing;

4) an inability for domestic beef production to keep pace with increased beef consumption;

5) an inability for domestic beef production to maintain its share of the total available U.S. beef supply;

6) a long-run lack of profitability for U.S. cattle feeders while retail beef prices climb to record levels;

7) an increase in gross packer margins while cattle feeders suffer extended losses;

8) an above-the-five-year-average retail beef price while cow/calf producers receive below-the-five-year-average prices for calves;

9) a historical depression in cattle prices when U.S. beef exports rise to record levels;

10) a shrinking number of states that continue to receive above-the-national-average cattle price;

11) a disruption in the historical U.S. cattle cycle; and,

12) a significant disparity in regional weekly cattle prices.

In addition, R-CALFUSA explained why the current structure of the U.S. cattle industry makes it highly susceptible to manipulation: the high concentration both in the industry’s feedlot sector and the meatpacking sector, as well as a unique characteristic of the cattle industry itself the perishable nature of slaughter-ready cattle. 

“Today’s announcement is a huge victory for our members who have been working for more than a decade to call attention to the market power abuses that are destroying the economic viability of our industry,” said Bullard. “R-CALF has joined with a broad coalition of organizations that, like us, are fighting to restore competition to our nation’s livestock markets.”

This coalition also met with the Department of Justice last month to encourage greater enforcement of antitrust laws and the Packers and Stockyards Act (PSA). 

“We could not be more pleased than to learn that both the Department of Justice and USDA are now taking our concerns seriously and we will continue working with our coalition partners to ensure that we turn this unprecedented opportunity into a genuine solution to permanently restore the opportunity for profitability to our nation’s hard-working farmers and ranchers,” Bullard concluded.

The joint USDA/Department of Justice announcement indicates the first public workshops to explore competition issues will likely be held in early 2010 with the dates, locations and times to be announced later. However, the agencies have asked that written comments be sent to the Department of Justice no later than Dec. 31, 2009. 

# # #

R-CALF USA (Ranchers-Cattlemen Action Legal Fund, United Stockgrowers of America) is a national, non-profit organization dedicated to ensuring the continued profitability and viability of the U.S. cattle industry. R-CALFUSA represents thousands of U.S. cattle producers on trade and marketing issues. Members are located across 47 states and are primarily cow/calf operators, cattle backgrounders, and/or feedlot owners. R-CALFUSA directors and committee chairs are extremely active unpaid volunteers. R-CALFUSA has dozens of affiliate organizations and various main-street businesses are associate members. For more information, visit www.r-calfusa.com  or, call 406-252-2516.   

Authors Bio:
R-CALF USA, Ranchers-Cattlemen Action Legal Fund, United Stockgrowers of America, represents thousands of U.S. cattle producers on domestic and international trade and marketing issues. R-CALF USA, a national, non-profit organization, is dedicated to ensuring the continued profitability and viability of the U.S. cattle industry. R-CALF USA's membership consists primarily of cow-calf operators, cattle backgrounders, and feedlot owners. Its members are located in 46 states, and the organization has many local and state association affiliates, from both cattle and farm organizations. Various main street businesses are associate members of R-CALF USA.

With a very small staff, R-CALF USA is dependent on its 15 directors, several committee chairs and numerous other volunteers. Articles upload to op-ed news are written by various staff or volunteers, and unless recognized in the article, should be attributed to the organization and not an individual.