The U.S. Department of Agriculture (USDA) has released a report on its ongoing boxed beef and fed cattle price spread investigation. The report, prepared by USDA’s Agricultural Marketing Service in coordination with the Office of the Chief Economist, summarizes market conditions, fed cattle prices, boxed beef values, and the spread before and after the fire and plant closure at the Tyson Holcomb, Kan., plant, and before and during the COVID-19 pandemic.
The report also discusses several policy considerations, including the desire by many market participants for improved price discovery, reinvigorated competition, and a more transparent relationship between the prices for live cattle and the resulting products. Considerations include potential updates to Livestock Mandatory Reporting to reduce instances of non-reporting and increase percentages of negotiated cash transactions; risk management outreach, education, and product improvements for small and medium-sized producers; small to very small meat processor outreach and opportunities; and enhancements to the Packers and Stockyards Act investigative and enforcement tools.
While the report does not examine potential violations of the Packers and Stockyards Act, USDA staff has maintained a cooperative relationship with the staff of the Department of Justice (DOJ) Antitrust Division and has discussed allegations of anticompetitive practices in the meatpacking industry. Should the USDA find a violation of the Packers and Stockyards Act, it is authorized to report the violation to DOJ for prosecution.