Following the outbreak of COVID-19, fed and feeder cattle prices have dropped sharply, with cash fed cattle prices declining from almost $120 per hundredweight (cwt) in mid-February to $106 per cwt in mid-March. Retail and wholesale beef prices responded to the surge in demand from grocery stores. Boxed beef cutout prices started out at $208 per cwt on March 13 to peak at $257 per cwt on March 23 and drop back to $230 per cwt on April 3.
The current volatility in cattle prices echoes the situation last August following the fire at Tyson’s Holcomb, Kansas, facility. Following the fire, cattle prices dropped but retail prices increased. A few weeks after the fire, U.S. Ag Secretary Sonny Perdue announced the launch of “an investigation into recent beef pricing margins to determine if there is any evidence of price manipulation, collusion, restrictions of competition or other unfair practices.”
The National Cattlemen’s Beef Association (NCBA) and several members of Congress have sent letters to President Trump, Secretary Perdue and others urging further investigation into the cattle markets to ensure fair practices during the volatile response to COVID-19.
In a letter to President Trump, NCBA president Marty Smith urged a deeper look into what he called a “striking disparity” between boxed beef prices and both cattle futures and cash price. “We are asking for the current market volatility to be analyzed and incorporated into that ongoing [August] investigation in the hope of identifying whether inappropriate influence occurred in the markets, and to provide our industry with recommendations on how we can update cattle markets to ensure they are equipped to function within today’s market realities.”
Sen. Deb Fischer (R-Nebraska) sent letters to Secretary Purdue and the Senate Judiciary Subcommittee on Antitrust requesting further investigation into the cattle markets. In her letter to the Subcommittee on Antitrust, she wrote, “In just seven days during March, the daily boxed beef cutout jumped 25%. Specifically, on Monday, March 16, USDA-LMR’s Choice boxed beef index closed at $224.36, up $16.22 from Friday, March 13, while the Select index rose $14.73 at $216.71. Both were record gains. The single-highest daily cutout gain previously recorded was the Select index’s gain of $12.62 on October 13, 2003.”
Several more members of Congress including Sen. Chuck Grassley (R-Iowa) and Rep. Mike Conaway (R-Texas) have gone public with their support of the USDA investigation. Sens. M. Mike Rounds (R-South Dakota), Kevin Cramer (R-North Dakota), John Hoeven (R-North Dakota) and Steve Daines (R-Montana) also sent a letter to the Department of Justice calling for further investigations in price fixing in the cattle markets. 
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Carrie Veselka
- Editor
- Progressive Cattle
- Email Carrie Veselka
