In an effort to encourage the U.S. Congress to use every tool at its disposal to promote competition in the agricultural sector, Sens. Mike Rounds and Elizabeth Warren have introduced a resolution asking the Federal Trade Commission to investigate beef companies for potential price fixing.
The bipartisan resolution invokes a 1914 act that authorizes the president or Congress to direct the FTC to investigate alleged antitrust violations. While President Biden has used his authority under this law to call for an oil-and-gas investigation, the rule has not been used by Congress itself since the 1920s.
According to a summary of the resolution released by Rounds (R-SD) and Warren (D-MA):
“Our nation’s beef-packing industry appears rife with antitrust violations, and our ranchers, farmers, plant workers, and beef customers are all paying the price as a result. The top-four beef packers increased their market share from 32% to 85% in the past three decades. At the same time, each year since 1980, an average of nearly 17,000 cattle ranchers have gone out of business. The dominant beef packers are in turn wielding their market power over the ranchers: American ranchers today receive approximately 39 cents of every dollar a consumer spends on beef, compared to the 60 cents they received 50 years ago, and between 2015 and 2018 the spread between the cost of wholesale beef and the price paid to ranchers increased by 60%, while the top beef packers enjoyed record profits.”
This resolution would direct the FTC to report to Congress within one year on:
- The extent of anticompetitive practices and violations of antitrust law in the beef-packing industry, including price fixing, anticompetitive acquisitions, dominance of supply chains, and monopolization.
- The monetary and other harms of anticompetitive practices and violations of antitrust law in the beef-packing industry on consumers, ranchers, farmers, plant workers, and small businesses.
- Recommendations for legislation or other remedial actions.
“Senator Rounds continues to be a champion for competition in the U.S. Senate,” said U.S. Cattlemen’s Association Vice President Justin Tupper. “We have not yet received the results of the Department of Justice’s investigation into the beef industry directed by former Secretary of Agriculture Sonny Perdue. This is completely unacceptable.”
Beef-packing companies have paid millions of dollars to settle beef price-fixing claims in recent years.