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Utah A.G. calls for price-fixing investigation of meatpacking industry

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Utah Attorney General Sean Reyes talks to members of the media regarding the opioid epidemic during a roundtable discussion at Jordan Academy for Technology & Careers South Campus on Monday, May 21, 2018, in Riverton.

Jacob Wiegand, Deseret News

SALT LAKE CITY — Attorney General Sean Reyes wants the Department of Justice to join Utah and other states to investigate suspected price fixing in the beleaguered meatpacking industry.

In a letter to U.S. Attorney General Willam Barr, Reyes writes that the state has become aware of complaints from beef growers and feeders regarding apparent manipulation of cattle pricing by processing and packing plants. 

“Especially now, we need to encourage fair competition in the meat packing industry and protect consumers,” Reyes said.

The concern over market manipulation has increased with beef prices reaching record levels as consumers stockpile meat in response to the COVID-19 pandemic, but cattle prices remain low and are decreasing, Reyes said.

In addition to harming cattle producers, the potentially illegal practice hurts consumers nationwide, many of whom are themselves struggling because of loss of employment and reduced incomes, he said.

“Cattle ranchers are being squeezed and many are struggling to survive, with many operating at losses, threatening the sustainability of this critically important segment of our economy and food supply,” the letter says. “Consumers, moreover, are being deprived of the benefit of purchasing beef at prices and quantities set by a healthy and competitive market.”

Reyes said pricing margins are a sign that meatpackers are using their ability to control the market for processed beef and take advantage of the situation in a manner that could violate federal antitrust law.

The four largest meatpacking companies — Tyson Foods, JBS Beef Co., Cargill Meat Solutions and NationalBeef — control more than 75% of the beef processing in the United States, according to the letter.

The meatpacking industry has been hit particularly hard by the virus, and many companies have temporarily shuttered plants in the past two months.

Coronavirus outbreaks at meat processing plants continue to climb, including an unidentified facility in Cache County, as the industry ramps up production, scales back plant closures and tries to return to normal in the weeks after President Donald Trump declared it an essential operation, according to USA Today.

Meat production, which had briefly tanked, quickly rebounded after the order to near pre-coronavirus levels and quelled consumer fears of pork, beef and poultry shortages, the paper reported.

In May 2019. Tyson Fresh Meats, a subsidiary of Tyson Foods, announced construction of a $300 million food production plant in Eagle Mountain that would initially provide 800 new jobs.

The proposed 400,000-square-foot case-ready plant would take large cuts of beef and pork and convert them into steaks, chops, roasts and ground meat to be packaged, weighed and labeled on retail trays that are shipped and sold in grocery stores.

Reyes concluded the letter saying that if an investigation finds appropriate enforcement can’t be pursued under antitrust laws, “regulatory strategies should be explored to promote competition, address market manipulation, and protect consumers.”

Tyson Foods did not immediately make a spokesperson available for comment.