US federals investigate major meatpackers on unfair cattle prices

The US federal government is conducting an investigation on some large meatpackers that slaughter most of the nation's cattle are illegally or unfairly driving down cattle prices, according to an official.

The investigation is under way as the Justice and Agriculture Departments hold a series of anti-trust hearings on competition in agriculture, and the USDA is expected to release sweeping anti-trust rules covering the meat industry this spring.

Many ranchers and critics of the meatpacking industry hope the investigation and action by the agency will force meatpackers to competitively bid for more cattle. That, they say, could help slow a 15-year trend in which several thousand ranchers are forced out of business every year, resulting in the smallest US cow herd in several decades and threatening a way of life that has kept the nation supplied with beef for more than a century.

According to reports, officials from GIPSA did not disclose whether the agency was investigating the so-called "Big Four" meatpackers - Tyson Foods, JBS, Cargill and National Beef - who together slaughter about 80% of US beef.

The nation's largest meatpackers bought about half of their cattle on the cash market in 2008, according to GIPSA. In that market, feedlots notify meatpackers cattle are for sale and receive bids for the animals.

But, the largest companies have increasingly avoided that market in recent years, buying more cattle through prearranged deals with individual feedlots or ranchers, Butler said.

Critics say that with the biggest companies buying fewer cattle on the cash market, prices have dropped, hurting smaller feedlots and ranchers who do not have deals with the large meatpackers.

Cash market prices have decreased by about 5% over the past two decades, said Robert Taylor, a professor of agricultural economics at Auburn University.

The 89-year-old Packers and Stockyards Act is meant to ensure fair competition and protect farmers and ranchers from discriminatory, monopolistic practices by meatpackers. But ranchers say it has long been ignored, and a 2006 federal audit concluded GIPSA had avoided complex investigations.