On my 39-county tour, I have spoken with hundreds of independent cattle producers across northwest Iowa. In my conversations with them, they all express the same concern that the big four meatpacking companies are reaping record profits while family-owned cattle farms are barely scraping by.
Through no fault of their own, many cattle producers — already suffering from the consequences of runaway inflation, our broken supply chain, and sky-high energy prices — are losing $150 or more a head and experiencing crushing losses as a result. This is unacceptable and unsustainable for family farmers who work overtime to feed our country and put food on our tables.
Concerns of price fixing by the big packers come as no surprise. Only four companies control 85 percent of the cattle market, opening the flood gates to exploitation. This commanding market share allows these packers to set non-negotiable contracts for beef purchases, manage slaughter numbers through accelerated line speeds, and ultimately manipulate the price of beef as they see fit.
While I am strong supporter of our free-market economy, free markets require free entry and transparency. But it’s clear that our cattle producers lack the same pricing information that the big packers intentionally conceal and use to cheat Iowa cattle producers out of a fair price for their product and inflate meat prices for American families.
These allegations are not far-fetched. Just a few months ago, JBS Foods — one of the four big meatpackers — paid $52 million to sweep its price-fixing schemes under the rug when grocery and wholesale food chains alleged that the big packers were colluding to increase beef prices. Even more recently, Sysco Foods has alleged that the big four packers are manipulating cattle numbers to artificially inflate beef prices. This is an alarming trend that begs a simple question: What are the big packers hiding?
The packers also claim that improved efficiency in meatpacking, tenuous market conditions, and strict adherence to alternative marketing agreements — which trap independent producers in unfair contracts — have naturally caused beef prices to fall, but I don’t buy it.
Efficiency is not an excuse for exploitation. In fact, the packers should be paying Iowa cattle producers top dollar for their product — not offering the lowest bid. According to a report from the University of Nebraska, over 94 percent of cattle in the Iowa-Minnesota U.S. Department of Agriculture cattle region grade over 80 percent choice, compared to less than 13 percent of cattle from the Texas-Oklahoma-New Mexico region. There is no justification for the big packers to scam Iowa cattle producers when it’s evident that Iowa cattle producers supply American families with the highest quality beef in the country. Once again, this backward system helps the packers line their pockets at the expense of independent producers, even while Iowa family farmers produce the nation’s highest quality beef.
In response to this unlawful manipulation of the cattle market, I introduced legislation to give power back to the producers. The Cattle Price Discovery and Transparency Act promotes transparency in the cattle marketplace and ensures that our independent producers and their families receive a fair price for their product.
Among many provisions, it requires the secretary of agriculture to establish minimum levels of fed cattle purchases through approved pricing mechanisms, ensuring that producers have greater market access and more opportunities to sell their beef at a higher, fairer price.
It also strongly punishes illegal activity by setting a $90,000 penalty for packers who break the law — a win for producers and consumers alike. Additionally, this bill makes marketing contracts, boxed beef reports, and slaughter schedules publicly available to producers so that they know they are receiving a fair market price for their beef.
Iowa cattle producers can compete with anyone on a fair, transparent playing field. However, if the big packers are allowed to recklessly break the rules with no consequences at all, our producers will continue to face an uphill battle to get a fair price and turn a profit.
I am confident that our Cattle Price Discovery and Transparency Act will level the playing field by promoting fairness, strengthening transparency, and protecting the 700,000 family-owned-and-operated cattle farms across the United States.
Since before I was elected to Congress, I promised that I would work hard to give our producers a fair shake and an equal voice in the cattle marketplace. This legislation represents a commitment to that very pledge and finally ensures that they do.Source : house.gov