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Johnson disappointed in US Dept of Ag report on cattle market investigation

News Staff - July 23, 2020

WASHINGTON, D.C. - The U.S. Department of Agriculture has released some preliminary findings from its investigation into the cattle markets following the Kansas plant fire last year.

Their findings include a detailed look at market changes following the fire which closed the plant for four months.

The Tyson beef plant closure affected 6% of the country’s beef processing capacity and the coronavirus pandemic disrupting nearly 40% of that capacity.

While the report says the goal is to discover if anyone illegally took advantage of the situation, none are identified in the report. Representative Dusty Johnson says he’s disappointed with the findings.

“The third paragraph of the report actually says, actually admits it does not list potential violations of the Packers and Stockyards Act, which is surprising because that’s what we thought we were getting,” said Johnson.

The report that was released from the U.S. Dept. of Agriculture is not the end all, be all. The Dept. of Justice continues to investigate any wrongdoings within the industry.

What the report does identify and offer is market weaknesses and potential policy changes. These include the following:

  • USDA calls for adding capacity at the small processor level
  • USDA Rural Development lending program should be tailored to help processors
  • USDA supports better risk management tools for livestock producers
  • USDA called for greater transparency and price discovery

“I was hopeful that the USDA report would identify some market wrongdoing,” said Johnson. “They haven’t yet but having them actually acknowledge the weaknesses in this market and accept the fact that congress needs to act is welcome news and will add some momentum to our efforts to that get done.”

Johnson added he doesn’t want congress to wait for a farm bill to address the issues.

Sen. John Thune says he was also disappointed with the report.

“South Dakota cattle producers are facing extreme volatility in the cattle market, and I remain concerned about potential anticompetitive activity in the highly concentrated meatpacking industry. I look forward to reviewing the considerations provided in this report, and I will continue to press the Department of Justice to conclude its investigation into potential price manipulation and other anticompetitive activities in the meatpacking industry.”

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