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Meat Industry Pushes Back on Harris' Rhetoric Over Price Gouging [1]

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Date: 2024-08-16

"Consumers have been impacted by high prices due to inflation on everything from services to rent to automobiles, not just at the grocery store," Potts said. "A federal ban on price gouging does not address the real causes of inflation."

Potts added that the prices livestock producers receive are based heavily on supply and demand. "Prices for cattle producers especially are at record highs, surpassing the 2014-2015 previous record highs," she said. Today, well into 2024, cattle prices remain at record levels because the U.S. has the lowest cattle inventory since Harry Truman was president.

Major meat companies have reported losses during the Biden-Harris Administration, with some closing facilities and laying off workers, Potts noted. Tyson Foods, for instance, has closed several pork and poultry processing facilities over the last two years. In March, Tyson announced it would close one of its Iowa pork plants in Perry, Iowa.

The National Chicken Council also responded to Harris' take on price gouging. "Americans are seeing inflation in nearly every part of their livelihoods - rent, gas, automobiles, furniture - not just in the meat case," said Gary Kushner, interim president of the NCC.

"Chicken prices are largely affected by supply and demand, by major input costs like corn, soybeans, energy, packaging, transportation, and by fiscal policy and burdensome government regulations -- not price gouging," Kushner said. "It's time for this administration to stop using the meat and poultry industry as a scapegoat and a distraction for the root causes of inflation and the significant challenges facing our economy."

EFFORTS IN CONGRESS, DOJ

Just two years ago Congress was holding hearings on cattle markets and senators from both parties were pushing a bill that would require more cattle to be sold through cash-trade sales rather than formula contracts. Backers pointed to market control exerted by four major packers that control 85% of fed-cattle slaughter nationally. Opponents claimed the cattle price discovery bills would actually cost producers money. The CEOs of Cargill, JBS, National Beef and Tyson Foods all testified in a House hearing that livestock and beef prices are set based on supply and demand. The cattle contract bill failed, but Congress and USDA have created a cattle contract library to provide more transparency to producers.

USDA and the Department of Justice started an investigation into cattle markets during the pandemic, but no conclusion was reached or report ever released on the findings.

AG SECRETARY WEIGHS IN

Agriculture Secretary Tom Vilsack was asked Thursday to respond to Harris' call to crack down on price gouging with food companies, as well as increase antitrust enforcement. Vilsack said he could not discuss what the vice president is suggesting in the context of a political campaign.

"But I will say this, we have been pleased with the partnership we have had with the Department of Justice as we have informed DOJ in certain circumstances to prevent mergers or to allow them under certain conditions which are beneficial to producers," Vilsack said. "We've been pleased with the work the Department of Justice has made in terms of cracking down on potential antitrust violations."

The Justice Department has been active in bringing antitrust cases, especially against the poultry industry. DOJ has sued poultry companies over worker wages as well as exit fees against poultry producers for leaving contracts.

In one of the more complicated cases going on right now, the Justice Department and six states have sued an Indiana statistics company, Agri Stats, over allegations of price fixing with major chicken and turkey companies. DOJ brought the suit against Agri Stats last year and a federal judge in May rejected a motion to dismiss the cases. DOJ alleges data Agri Stats collected and provided to poultry companies was used by major players in the industry to set and match prices.

Still, dozens of grocery chains and food distributors last year lost a six-week civil trial in federal court when a jury ruled Sanderson Farms did not conspire with rival poultry companies to raise chicken prices.

Vilsack also said USDA is in the process of completing its own retail study, "which I think will be coming out very soon, and I think that will raise some valid questions and issues about practices within the industry that ultimately impact and affect the price that people pay," he said.

The secretary also cited a study into the costs of crop seeds that was done and led to recommendations allowing farmers to have more of a voice in the patenting of seed technology, "which, we think, over time is going to make it easier for farmers to have more choice, greater transparency, and maybe even less costs in terms of the seed options that they have."

Chris Clayton can be reached at [email protected]

Follow him on social platform X @ChrisClaytonDTN

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