Rosa: Kansas Fire Highlights Issues In Packing Industry

Are prices in the beef market being manipulated by packing industry?

Many on the production side will say yes.

The issue truly came to light after a fire heavily damaged a Tyson packing facility in Holcomb, KS.  Jerome Rosa, President of the Oregon Cattlemen’s Association said something does not add up where consumer prices have increased, packers are enjoying excellent margins, and producers are struggling to make ends meet.

“Our ranchers, and particularly our cow-calf guys are really, really suffering from low prices, and yet they continue to see increasing on all of their other fixed costs, which they have absolutely no control over.  And to see this kind of market manipulation that occurred is something we need answers on and we need answer right away.”

Rosa says currently 80% of the meat packing industry is controlled by four companies.  And with that in mind Ag Secretary Sonny Perdue has directed the Packers and Stockyards Division to launch an investigation to determine if there is any evidence of price manipulation or collusion.

The situation is even more challenging for Oregon cattle producers; there is not a USDA approved packing facility in the state.  Rosa said the current climate and the lack of plant options has strained the relationship between producers and packers.

“It boils down to, if it was profitable to have more of these packing plants like we use to have, why aren’t there more plants out there that would be able to stabilize these problems?”

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