In a bipartisan initiative Senator Mike Rounds (R-SD), Senator John Tester (D-MT) and Senator Chuck Grassley (R-IA) have reintroduced the Meat Packing Special Investigator Act to create an Office of the Special Investigator for Competition Matters within the USDA.
The intent of the Office will be to prevent anticompetitive behavior in the meat packing industry that is characterized by consolidation with four major companies representing 85 percent of beef processing capacity.
Using an over-simplification, the promoters of the Bill point to the difference in price paid to ranchers and the eventual cost of beef to consumers. A second justification of questionable relevance is the fact that allegedly 17,000 ranchers have ceased production since 1980.
Senator Grassley expressed the opinion that, “Increased consolidation and anticompetitive tactics by is intended to strengthen the enforcement of the Packers and Stockyards Act and will increase or extend involvement with the Department of Justice and the Federal Trade Commission.
Predictably, the North American Meat Institute is opposed to the legislation. In Congressional testimony, Julie Anna Potts, CEO of NAMI, stated, “The Special Investigator would feel emboldened and obligated to bring in as many cases as possible, warranted or not to test the legal limits of the new rules. The resulting legal uncertainty and chaos will accelerate changes in livestock and poultry marketing that will add cost to producers and packers.”
The preoccupation of legislators, USDA and the current Administration that large-scale livestock production is in some way prejudicial to farmers and consumers has no support from mainstream agricultural economists. If introduced, “mission creep“ would extend the scope of the Investigator from beef and pork to include poultry with consequential disruption of the supply chain.