Reducing Vulnerability
By Rep. Dusty Johnson
April 29, 2022
Between 85-90% of the beef processing in this country is done at just 30 plants – in fact, 12 plants do more than half of all the beef processing. Having such a large percentage of meat packing done at such a small number of plants is a vulnerability in our markets. We’ve experienced many “black swan” events in the past couple years—from the Holcomb fire, COVID-19, and weather, among others. This market concentration poses a significant risk to food security in our nation. This can mean shortages at the grocery store, skyrocketing prices for meat, nowhere for producers to sell their cattle, and further complications with the supply chain.
On Wednesday, I participated in the House Agriculture Committee hearing entitled “Price Discrepancies, Transparency, and Alleged Unfair Practices in Cattle Markets.” The hearing focused on market share and practices of the “Big Four” meat packers — Cargill, JBS, National Beef Packing Company, and Tyson.
We were joined by two panels. The first panel consisted of three producers who expressed frustrations with the current state of the meat packing industry. The second panel was made up of the CEOs of each of the Big Four meat packers. We heard each panel talk about their role in the industry, where they think the problems lie, and what steps should be taken to improve cattle markets.
It was great to hear other Members and witnesses point to legislation I have introduced as solutions to address cattle markets. The Cattle Contract Library Act passed the House overwhelmingly in December 2021 and would increase price transparency for sellers. A lack of transparency is not good for the producer. Increasing our transparency will decrease our market vulnerability. The Butcher Block Act would assist small meat processors who are looking to expand operations or add shackle space. It is imperative to diversify the meat and poultry industry to allow smaller, independent processors more of the market share.
While we have been lucky to have not experienced a black swan event in about a year, we cannot be naïve that we won’t have another. We may not know what the event will be, but we need to take steps to decrease vulnerabilities in our food security and supply chain. I’ve been urging Members and leadership for months to get my legislation signed into law. These bills are not just going to benefit producers, but will benefit consumers, packers, and grocers. Increasing food security is not just in America’s best interests, but the world’s.
###