The Livestock Marketing Association (LMA) is encouraged by the U.S. Department of Agriculture’s (USDA) announcement of an investigation into beef pricing margins to determine if there is any evidence of price manipulation, collusion, restrictions of competition, or other unfair practices. LMA encourages USDA to conduct a thorough investigation of all facets of this issue and underlying forces. If unfair trade practices or other violations of the Packers and Stockyards Act or antitrust laws are found, rapid enforcement actions must follow.

Following the recent fire at the beef processing plant in Holcomb, Kan., the cattle industry experienced a sharp decline in fed cattle and feeder cattle prices. At the same time, boxed beef prices skyrocketed. All the while, the number of cattle slaughtered weekly has not been significantly less than the week of the fire. The combination of these factors resulted in significant packer profit margins. At the same time, livestock producers receive a shrinking portion of the retail beef dollar paid by the American consumer.

However, this is only one illustration of long-standing concerns regarding pricing and competition. The USDA investigation should analyze issues related to competition in a larger context than the fire, including looking at issues experienced due to lack of competition in the entire live cattle marketing complex.

LMA is the national trade organization representing more than 75 percent of the regularly selling fixed facility livestock auction markets in the U.S. LMA also represents online and video marketing entities, and professional buyers: livestock dealers and order buyers. Our more than 800 livestock marketing business members each work with hundreds and even thousands of producers to utilize competitive markets to bring them the best prices for their animals. This adds up to hundreds of thousands of cattle farmers and ranchers served by markets. Our industry needs producers, feeders, markets, and packers. It is critical that each of these sectors has a reasonable opportunity to make a profit during the business cycle, ensuring a healthy and sustainable industry. However, if anti-competitive practices are at play, it risks pushing market participants in other segments out of business.