USDA suggests changes to beef market as investigation continues

Although this report didn't detail any violations by the meat industry, the investigation is ongoing. In fact, as the Department of Justice and the USDA continue their probes, the agriculture agency is suggesting more reporting requirements for meatpacking companies and additional enforcement power for itself. 

In the report, USDA made suggestions for more transparency with pricing, including reshuffling reporting regions to expand the market data released to the public, which is a change that could be made without legislative action. However, there has yet to be industry consensus for that. The agency also said that amendments to the Packers & Stockyards Act, which assure fair competition, to give USDA the power to require written reports and answers to questions could be beneficial, but requires legislative action. 

In June, the DOJ's antitrust division sent subpoenas to Tyson Foods, JBS SA, Cargill and National Beef following anti-competitive accusations. The four companies are some of the biggest meatpackers in the country, controlling more than 80% of beef processing. The DOJ probe came after several senators, 11 state attorneys general and cattle associations pushed for the Justice Department to get involved even though USDA was already looking into it. The DOJ is still investigating those allegations and USDA said in this new report that the two have been engaged in discussions about these claims. 

"If any unfair practices are detected, we will take quick enforcement action," USDA Secretary Sonny Perdue said in a statement. 

When coronavirus started to spread across the U.S., meat sales increased and beef prices surged as consumers stockpiled and outbreaks spread within processing plants, but didn't translate into producer profits. The USDA report says the largest gap between beef prices and cattle prices during the pandemic reached about $2.79 a pound, which was the biggest gap since this tracking began in 2001.