Regular supply and demand factors such as a drought that affected the price of cattle feed — rather than competition levels among packers — likely caused substantial fluctuations in fed cattle prices between 2013 and 2016, the U.S. Government Accountability Office (GAO) said in an analysis published Tuesday.
U.S. senators in 2016 asked the GAO to investigate the cause of a sudden 15 percent price drop in fed cattle prices in the latter half of 2015, at the urging of R-CALF USA.
“We found that while less competition among packers did not appear to result in lower national cattle prices from 2013 through 2015 on a national level, it did account for variations in prices in different parts of the country,” GAO said in its report.
For the analysis, GAO reviewed economic data and USDA and Commodity Futures Trading Commission documentation, analyzed transaction data on beef packer purchases from 2013 through 2015, and interviewed recognized experts, cattle industry stakeholders such as feedlot operators and packers, and agency officials.
GAO recommended USDA review the extent to which the price reporting group can share daily transaction data with the Packers and Stockyards Program and determine whether such sharing is allowable. If it is advisable, USDA should submit to Congress a proposal to allow the data sharing, GAO concluded.