April 9, 2020

USDA investigating beef price increase amid lower cattle prices in COVID-19 pandemic

Sonny Perdue, Agriculture Secretary said the US Department of Agriculture (USDA) is looking into why prices for cattle aren't going up even as beef prices are rising from COVID-19 hoarding, reported Reuters.

The USDA investigation expands its initial review of the US beef market in August 2019 after a Tyson Foods plant in Kansas pushed beef prices up but decreased prices for cattle. Other major meat companies like Cargill are also under the radar.

Tyson Foods said it will work together with the USDA. The company said after the fire and COVID-19, it has introduced new measures to reduce the impact of these events on its producers, production output and how it meets customer demand.

Previously, Cargill said it will benefit farmers buy purchasing cattle in cash.

US senators have urged the Department of Justice (DOJ) to investigate major beef processors for price-fixing during COVID-19.

In a separate request, industry group the National Cattlemen's Beef Association has asked the USDA to work with the DOJ for "inappropriate influence in the markets".

The group also called on the U.S. Commodity Futures Trading Commission to review CME Group's cattle futures speculations to verify if it is still a beneficial risk management tool for farmers.

Purdue said on Twitter that USDA's Packers and Stockyards Division is expanding its investigation to find out the reason why there's a different between live beef and box prices, beginning with the Kansas fire and now COVID-19.

-      Reuters