WASHINGTON – Today, U.S. Senators Tina Smith (D-MN) and Chuck Grassley (R-IA), introduced bipartisan legislation to support research into the impact of livestock market consolidation on farmers, ranchers, and consumers in an effort to better understand the problem and craft effective solutions.
“Just a handful of large companies have come to dominate the meat and poultry processing industry, which means higher prices for consumers and shrinking earnings for farmers,” said Sen. Smith. “This bipartisan bill would uncover the impact of this consolidation on farmers and consumers and help us create the best possible solutions to fix the problem. I look forward to working with Senator Grassley and my colleagues on both sides of the aisle to pass this legislation as part of the Farm Bill.”
“This type of measure is long overdue. Iowa producers are well aware of the downsides of consolidation in the meat industry,” said Sen. Grassley. “Their returns on hard work are getting squeezed more every year all consumers pay more at the grocery stores. I’m glad to work in a bipartisan way with Senator Smith as we continue trying to address this problem.”
“Farmers Union launched the Fairness for Farmers campaign to call attention to the increasingly consolidated agricultural marketplace where the four largest beef packers control 85 percent of beef packing and the farmer’s share of the food dollar has dropped from 50 percent in 1952 to less than 16 percent today,” said Minnesota Farmers Union (MFU) President Gary Wertish. “Sen. Smith’s bill will help arm stakeholders and USDA with more information to take action to support family farmers who operate in a market threatened with unchecked corporate consolidation. Thank you, Sen. Smith, for introducing this legislation to collect data on consolidation in livestock markets and its impact on farmers, ranchers and consumers. Having accurate market information is essential for a functioning, open, transparent market to succeed.”
Cattle producers often make pennies on the dollar due to a lack of transparency and competition in the cattle processing industry, where four companies control the vast majority of the market. During the pandemic, when processing slowed, the impact of this consolidation was exposed in the form of higher consumer prices and low supply. Due to a bottleneck in processing and a lack of competition, farmers got less for their products, while consumers paid more at the grocery store.
Right now, there is a patchwork of data and research on consolidation in the livestock industry, but more information is needed to make policy decisions on how to best support small and independent ranchers and farmers.
The Livestock Consolidation Research Act of 2023 moves beyond existing research to discover the impact of this consolidation on farmers and ranchers, as well as downstream impact on consumers. The bill directs the USDA’s Economic Research Service (ERS) to conduct this research. Senators Smith and Grassley will push for its inclusion in the research title of the Farm Bill, which could form a base of data to inform future decisions. The bill has been endorsed by the National Farmers Union and the Minnesota Farmers Union.
You can access bill text here.
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