USDA investigates market after Holcomb, Kan., Tyson plant closure

Published: Aug. 1, 2020 at 1:05 PM CDT
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WASHINGTON, D.C. (WIBW) - The USDA has released a report discussing ongoing boxed beef and fed cattle prices and the landscape of the market after the closure of the Tyson plant in Holcomb, Kan.

The U.S. Department of Agriculture says as part of its commitment to fair and competitive markets for the meat industry it has released a report on the ongoing boxed beef and fed cattle price spread investigation following the closure of the Tyson plant in Holcomb, Kan., after a fire and COVID-19.

“The closure of the Tyson beef packing plant in Holcomb, Kansas, after a fire at the facility, and the COVID-19 pandemic clearly disrupted the markets and processing systems responsible for the production and sale of U.S. beef,” said U.S. Secretary of Agriculture Sonny Perdue. “The report examines these economic disruptions and the significant increase in the spread between boxed beef and fed cattle prices that resulted from them. While we’re pleased to provide this update, we assure producers that our work continues in order to determine if there are any violations of the Packers and Stockyards Act. If any unfair practices are detected, we will take quick enforcement action.”

The USDA says the report summarizes market conditions, fed cattle prices, boxed beef values and the spread before and after a fire devasted the plant and before and during the COVID-19 pandemic.

According to the Department, the report also talks about several policy considerations for improved price discovery, reinvigorated competition and a more transparent relationship between the prices of live cattle and its products. It says considerations include potential updates to Livestock Mandatory Reporting to reduce the number of times of nonreporting and increase percentages of negotiated cash transactions, risk management outreach, education and product improvements for small and medium-sized producers, small to very small meat processor outreach and opportunities and enhancements to the Packers and Stockyards Act investigative and enforcement tools.

The USDA says while the report does not examine potential violations of the Packers and Stockyards Act, its staff has maintained a cooperative relationship with the Department of Justice Antitrust Division and has discussed allegations of anticompetitive practices in the meatpacking industry. It says should it find a violation of the Act, it is authorized to report the violation to the DOJ for prosecution.

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