Dive Brief:
- The Justice Department is conducting an antitrust investigation into major beef producers, with a top official saying it is exploring "every law enforcement tool available to help reduce food prices."
- Acting Attorney General Todd Blanche provided few details on the investigation. He declined to say whether it was a civil or criminal case or if the DOJ intends to break up the consolidated beef sector after its probe.
- The DOJ is also expected to announce later this week a "historic settlement" with data provider Agri Stats that will "directly affect the prices of proteins like chicken, pork and turkey," Blanche said.
Dive Insight:
Beef prices are hovering at record highs this year, with the average cost of ground beef reaching close to $7 a pound.
Drought and high feed costs have led to the worst cattle shortage in 75 years, and increased prices for livestock have discouraged ranchers from rebuilding their herds, a process that takes three to five years. The situation has led to profit losses for major producers, including Tyson Foods, which this week reported another quarterly loss in its beef business.
To address prices, federal lawmakers have zeroed in on the consolidation of the beef sector, noting that just four firms control 85% of processing: JBS, Cargill, Tyson and National Beef. Republicans and Democrats have previously floated bills or conducted investigations designed to encourage more competition, in hopes that prices would come down if ranchers had more options to sell their livestock.
"These companies now have an unprecedented ability to wield market power and influence prices paid for cattle – definitely more so than if we had greater competition," Agriculture Secretary Brooke Rollins said during a press conference.
Meat processors have pushed back vigorously against the idea that they're to blame for higher prices. They argue consolidation is part of the reason that protein costs have remained historically low for years. A 2000 USDA study, however, found aggressive price competition pushed companies to concentrate operations, causing smaller plants to exit the industry.
The Trump administration previously opened an antitrust investigation into meatpackers in 2020, which continued during the Biden administration. It closed after five years of investigation with no findings. The Biden administration also issued an executive order to tackle consolidation in the meatpacking industry, though it was overturned by President Donald Trump last fall.
Peter Navarro, counselor to the president, said the newest investigation differs from the previous probe in "velocity, intent and actual action."
The upcoming settlement with Agri Stats, a firm accused of facilitating price coordination in the poultry and pork industries, could also lead to price relief in the protein sector, Navarro said.
The DOJ sued Agri Stats in 2023 for allegedly sharing competitively sensitive information that pork and poultry processors used to manipulate the markets, including data on sales prices and worker compensation.
Agri Stats, established in 1985, has been named in several class-action, price-fixing lawsuits for allegedly helping meat companies influence the markets. The company has denied these claims, saying it has played a vital role in lowering consumer costs of chicken, pork and turkey.
Navarro said the Agri Stats settlement will "ripple through this industry rapidly and in a way which is going to allow us to get the bottom" of food price inflation.
