OPINION: USDA just put meat packers on notice

The CEO's of all the major meat packers have just collectively set their hair on fire and are likely calling internal company meetings RIGHT NOW about how to handle the industry's greatest threat in, like, forever. That's because the United States Department of Agriculture  announced this month that it will attempt to significantly strengthen enforcement of the 100-year-old Packers and Stockyards Act that was originally written to stop meat packers from stealing from poultry,hog farmers and cattle ranchers with a bag of tricks that manipulated live stock prices through unfair, deceptive and anti-competitive practices. As written back in 1921:

Section 202 of the PSA (7 U.S.C. §§ 192 (a) and (e)) makes it unlawful for any packer who inspects livestock, meat products or livestock products to engage in or use any unfair, unjustly discriminatory or deceptive practice or device, or engage in any course of business or do any act for the purpose or with the effect of manipulating or controlling prices or creating a monopoly in the buying, selling or dealing any article in restraint of commerce. But meat packers have had a century to go to the courts in order to chip away at straightforward protections. And chip away they did, finally hitting the mother load in 2004 in the landmark case Pickett v. Tyson Fresh Meats Inc.

U.S. District Court for the Middle District of Alabama ruled that to win Section 202 PSA case a meat producer or rancher had to prove a singular meat packer's buying practices reduced marketplace competition by arbitrarily lowering prices paid to sellers with the likely effect of increasing retail prices.

Opinion: The Packers and Stockyards Act needs a major rewrite

If that’s not enough the Department of Justice has subpoenaed Big-Meats “big four” – Tyson Foods, JBS SA, Cargill, and National Beef/Marfrig – in an attempt to learn if there’s been price fixing hanky-panky during the COVID-19 crisis. The subpoenas come at the request of Attorneys general from North Dakota, Nebraska, Iowa, Minnesota, Montana, Wyoming, Colorado, Missouri, Idaho, and Arizona and South Dakota who collectively can’t figure out what the heck is going on with cattle prices in the last several months.