What To Do?
If you are in the beef business, all of the talk the last year or so has been what to do with the major meatpackers. Especially the four major beef processors and their huge profits they have been racking up the last few years.
There are three major parts of the beef business: the producer, feeder and the meatpackers, all three are critical to the chain. In the last few years, only the packer has been profitable.
Since last fall, as beef prices have gone up dramatically at the meat counters, some have blamed those prices on rising inflation, which in turn has made the problem a political one. My feeling is it could get us in trouble.
As we all know, beef products are a commodity rising and falling on supply and demand, just as gasoline, oil and grains do. At times it can cause unfair results.
Don’t get me wrong, I’m not a fan of the major meatpackers, but they have been getting these huge profits because they can. We do need to do some fixing, but we have to be careful as numbers of cattle are trending down and the demand is rising. The trend is flipping over.
In the past, some of the major meatpackers have not played fair and have been fined millions of dollars. One packer voluntarily paid those fines, I think to stop the investigation from going further.
The U.S. Department of Justice (DOJ) has an ongoing investigation into the workings of the four major meatpackers, and we have heard nothing about the case. It has always been the practice of the DOJ to keep quiet until they find a wrong and bring charges, but there is a chance we may never hear from them.
The current administration and some members of Congress have held hearings, and the cattle feeders and beef producers welcomed them to find solutions, but remember the government has a very poor record of fixing anything. I’m not sure we need more government in the meat business.
We do need some laws changed to reflect better transparency, grid marketing and methods of pricing and buying of fat cattle. We also need to be very careful on what countries we let import meat into the U.S.
Currently, the president and some members of Congress want beef prices to drop to help the rising cost of inflation. I’m not sure how much concern some have for the cattle feeders and beef producers making more dollars, they just want inflation to drop to help them in the upcoming election. A knee-jerk decision now could hurt the beef business.
Around 650,000 head of cattle are processed every week, with the four major meatpackers slaughtering the majority. Smaller packinghouses will not make a major difference, but will help local producers.
With the upcoming election this fall, everything is political. Somehow, we need to keep politics out of the meat issue. I’m not sure it’s possible these days.
“Beef. It’s What’s For Dinner” is great, but getting the steak to the plate is not easy.