Meat+Poultry - June 2022 - 14

WASHINGTON
Inviting input
In late April the House Agriculture
Committee heard testimony from
various beef industry stakeholders
with different viewpoints regarding
the state of beef and cattle markets
in the United States and specifically
whether consolidation in the industry
has unfairly favored packers and
processors over cattle ranchers
and farmers.
Chief executive officers from
Cargill, Tyson Foods Inc., JBS and
National Beef Packing Co. were among
those who participated in the hearing
and provided testimony. Tyson Foods'
Donnie King shared his testimony
on April 26 regarding meat producer
interactions with current markets.
King explained in his testimony
that like nearly every product, basic
market forces are driving beef prices
at the moment. He also said labor
shortages from the COVID-19 pandemic
constrained beef production with
consumer demand remaining high.
" We just didn't have enough
people to fully staff our plants, which
resulted in a 'sudden and swift rise'
in the oversupply of cattle and a
corresponding drop in cattle prices, "
King said. " At the same time, the
price for finished beef - the beef
that consumers buy at grocery stores
- was rising, driven by skyrocketing
consumer demand, and basic
economics holds that when demand is
high and supply is low, prices will rise,
which is precisely what they did. "
In response to a line of questioning
during the hearing, the North American
Meat Institute (NAMI) said the
complexities of the beef and cattle
markets are driven by supply and
demand and have more participants
than just packers and producers who
add value during production.
" Too often, the policy debate
around the cattle and beef industry
is an overly simplified discussion
limited to cattle producers versus beef
packers. It is imperative policymakers
remember: packers don't buy fed
cattle from cow-calf producers; nor
do packers sell beef to consumers, "
said Julie Anna Potts, president and
CEO of NAMI. " Congress and USDA
should not make radical changes to
the cattle and beef markets; such
changes will up-end the markets,
increase costs for the entire supply
chain, including for consumers during
this time of record inflation, and bring
unintended consequences. "
Potts said the hearing was
incomplete and ignored other factors
in the determination of prices for
producers and consumers.
In his opening statement, Rep.
David Scott (D-Ga.), chairman of
the committee, stated his position of
concern about the direction of the
beef industry.
" I am concerned that in the last
40 years, this country has lost its
grip on the 'free market' component
of capitalism, " he said. " Fair and
competitive markets should engender
opportunities for many, and not just
benefit a few at the top. We created
antitrust laws for a reason, and
unfortunately, we have gotten away
from enforcing anti-competitive
practices, and we have moved toward
a system that prioritizes efficiency at
all costs. "
Don Schiefelbein, president of the
National Cattlemen's Beef Association,
also testified at the hearing and urged
House members to back key policies
with support across the cattle industry
including a cattle contract library,
Livestock Mandatory Reporting (LMR)
reauthorization and investments
in small regional processing
capacity expansion.
" Broadly supported proposals have
seen tremendous legislative success
in this chamber recently, " he said.
" However, repeatedly belaboring the
same divisive issues has detracted from
that collaborative work to the benefit
of no one. It is time to move on and
focus on areas where agreement can
be reached. "
RYAN MCCARTHY | rmccar thy@sos land.com
" Congress and USDA should not make radical
changes to the cattle and beef markets; such
changes will up-end the markets, increase
costs for the entire supply chain, including for
consumers during this time of record inflation,
and bring unintended consequences. "
- JULIE ANNA POTTS
14 MEAT+POULTRY | 06.22 | www.meatpoultry.com
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Meat+Poultry - June 2022

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