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AG Reyes urges USDA to strengthen competition in meatpacking

SALT LAKE CITY — Today, Utah Attorney General Sean D. Reyes joined a bipartisan coalition of 16 attorneys general in making recommendations to U.S. Department of Agriculture Secretary Tom Vilsack to improve competition in the meat processing industry, which will help Utah farmers, ranchers, and consumers.

In a letter to Secretary Vilsack, Attorney General Reyes raises concerns about the increasing market concentration in meatpacking and offers ­­solutions to aid USDA in efforts to strengthen enforcement under the Packers and Stockyards Act.

The Packers and Stockyards Act, which dates to 1921, was intended to address unfair, deceptive, and anti-competitive practices in meat markets. Over time, however, corporate consolidation has led to less competition for producers’ livestock and poultry. In 1977, the four largest beef packers only accounted for 25% of the market, but as of 2018, the four largest packers controlled 85% of the market. Similarly, in 1976, the four largest processors of pork controlled 33% of the market, while in 2018, the largest four processors accounted for 70% of the market. The result has weakened prices, forced many producers from the market, and reduced the number of livestock farms and ranches. This market consolidation hurts both Utah farmers and consumers.

Without increased enforcement and government oversight, the promise of the Packers and Stockyard Act is in jeopardy. In the letter, Attorney General Reyes and the bipartisan coalition offer a number of recommendations to Secretary Vilsack and Andrew Green, USDA Senior Advisor for Fair and Competitive Markets. Those recommendations include asking them to:

  • Consider how increased concentration and related mergers have resulted in meat packers’ ability to charge higher prices to consumers, while paying producers less for their livestock and poultry;
  • Consider using funds appropriated through the American Rescue Plan Act of 2021 to establish a grant that state antitrust enforcers could use to investigate and bring actions in agricultural markets; 
  • Move forward with an investment of more than $500 million to support and incentivize new competitive entrants in meat and poultry processing, as well as smaller facilities;
  • Review reforms for cash market procurement minimums proposed by the various producer organizations;
  • Consider reforms for exclusive contracts, such as alternative marketing arrangements, including fixed base prices, public disclosure, and bidding;
  • Update regulations governing what information companies are allowed to collect and share for profit;
  • Follow through with plans to propose “a rule to clarify that parties do not need to demonstrate harm to competition in order to bring an action under section 202 (a) and 202 (b) of the P&S Act;”
  • Consider establishing an Agricultural Markets Integrity Working Group, bringing together leaders from the various agencies to discuss issues in the market.

Attorney General Reyes was joined in the letter to Secretary Vilsack by the attorneys general of California, Delaware, Hawaii, Idaho, Illinois, Maryland, Nevada, New Mexico, North Dakota, Oregon, Rhode Island, South Dakota, in addition to Minnesota Attorney General Ellison, Wyoming Attorney General Hill, and Iowa Attorney General Miller.

A copy of the letter is available here.

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