Jerry Nine: Why something has to be done very soon regarding the packer and retailer manipulating the cattle market and beef market.
Cattle Market, April 2020
April, 11th, 2020
To all cattlemen and the public,
Why something has to be done very soon regarding the packer and retailer manipulating the cattle market and beef market.
#1 There is a monopoly with 4 big packers (JBS, National Beef (owned by Marfrig), Tyson, and Cargill) not only controlling the market, but paying cattlemen whatever they want for our product. These 4 packers process approximately 80% of the beef in the U.S.
#2 The packer or retailer simply sell the futures to establish what they will pay. We have quotes of choice and select beef prices which says what cattlemen should get, but they ignore that, and pay mostly according to the CME futures.
Example: If choice beef is $240 and select is $220, and if normally 80% grade choice that figures $236. The normal yield from live weight to hanging dressed weight is 64.5%, after a 4% live weight shrink–the packer should be paying $152.22 on a live weight basis, which doesn’t count for offal (ex: hooves, shin, tongue, liver, etc.) that the packer gets.
#3 The packer lately has made from $450 to $700 per head, ignoring what beef prices are quoted at. This not only cheats the cattlemen, but also cheats the public. If the packer was still making a good profit, but not cheating the cattlemen, the government wouldn’t need to subsidize the cattlemen. Then the cattlemen would still have a good market. After the Tyson Plant Fire in Holcomb, KS many cattlemen realized just how much our industry has been manipulated. Live cattle prices nosedived while the boxed beef cutout soared. USDA was pressured to investigate. 7 months later we have not heard anything from the USDA regarding that investigation. It is time that this matter is investigated by the proper agency and in this case, that is the Department of Justice.
#4 Antitrust laws are completely ignored and not enforced.
#5 We are importing way too much beef. The excess of imports is killing U.S. prices, and without labeling U.S. beef on our product, the packers can buy from any country with a lot less standards and mislead the public. They simply buy from other countries whatever is the cheapest and mark it up and act like it is U.S. beef.
#6 I do not feel it is in the U.S.’s best interest to let a foreign investor own or control our food supply. Currently, 2 of the big 4 packers are Brazilian owned; JBS & National Beef (owned by Marfrig). I think that they should only be allowed to own 25% of any food supply, supply chain, packing house, or retail business; particularly if it is deemed as a $5 million investment or more.
#7 The packer uses every angle to keep a monopoly on our product to ensure he can cheat cattlemen, making himself filthy rich at our expense. The packers do this several ways, they make special deals with a handful of the largest fat cattle suppliers, probably cutting them in on half of the profits. In other words, the packers give a nice profit to a few large investors so they can steal all the other cattlemen’s cattle.
#8 Our US Secretary of Agriculture, Sonny Perdue, has made statements like “In America the big get bigger and the small go out. I don’t think in America we, for any small business, we have a guaranteed income or guaranteed profitability.” That is ridiculous he should be working for the smallest to the largest cattlemen and farmer. He needs to change his ways or be replaced.
#9 NCBA- National Cattlemen’s Beef Association, is supposed to represent cattlemen, but their main priority is the packer. Neither our Secretary of Agriculture nor NCBA work for cattlemen, or they would have been screaming for a long time about this monopoly cheating U.S. cattlemen.
#10 Stimulus money would be nice, but it is like putting a band aid on a cancer spot. The long-term effects of not correcting the root problem with our industry, will inevitably be the end of the U.S. cattlemen as we know it.
Thank you for your time, and I sincerely hope that we take a hard look at the cattle industry corruption. This not only affects rural America, but our country as a whole. The safety of our food supply, the quality of our food, our freedom and independence from foreign countries is at stake. This has to stop if we want the family farm to survive and independent cattlemen to survive. We have to stop this monopoly!
Jerry Nine- Owner of Woodward Livestock Auction- Woodward, Oklahoma, rancher, farmer, feedlot, stocker, and cow-calf operation, weekly writer for column in the High Plains Journal and Penny News papers.