Lucas Statement on USDA’s Beef Market Investigation

Mike Seals - July 22, 2020 11:25 pm

Washington, D.C. – Today, Congressman Frank Lucas (OK-03) released the following statement after the United States Department of Agriculture (USDA) released an analysis of market conditions in the context of the ongoing beef market investigation. USDA Secretary Sonny Perdue announced on August 29, 2019 that USDA’s Packers and Stockyards Division would investigate beef pricing margins after a fire at a Tyson Food’s beef processing facility in Holcomb, Kansas. Following the spread of the coronavirus resulting in the divergence between box and live beef prices, Secretary Perdue later expanded the investigation to include developments related to the COVID-19 outbreak.

“This afternoon, the United States Department of Agriculture released a report on the price spread between boxed beef and fed cattle that occurred after the Tyson’s plant fire in August of 2019 and during the COVID-19 shutdowns. Their report consists of an analysis of market performance under the strain caused by those two events and policy recommendations to improve the overall marketplace. While this report is helpful in looking for solutions and reforms currently, I continue to look forward to the conclusion of both USDA’s and the Department of Justice’s investigations into any ongoing or isolated violations of the Packers and Stockyards Act or anti-trust law.  

“Along with their market analysis, the USDA report includes various policy recommendations, including: increasing educational resources to better equip livestock producers with market and risk management training, and reducing the high-cost, regulatory burdens that currently impact smaller meat processors. 

“The market strain of the past year has exposed many vulnerabilities within the beef supply chain.  These events have forced many cattlemen and women across the country to seriously question the future of their often family-owned operations. This is deeply concerning to me due to the fact that these operations serve a vital role in local communities across the country and are a key part in securing the national food supply chain.  I look forward to continuing to work with other Members of Congress, USDA and cattlemen and women across the country to fix these issues.” 

Lucas has long supported the efforts to better equip livestock producers with risk management training. In October of 2019, Congressman Lucas introduced the Livestock Risk Management and Education Act with U.S. Representatives Dusty Johnson (R-S.D.) and Liz Cheney (R-WY), which would authorize the National Institute of Food & Agriculture (NIFA) to provide resources to improve livestock producers’ knowledge of future markets to better manage market volatility.

Another policy recommendation that Congressman Lucas has already introduced legislation to address is the recommendation to “reduce the burden for smaller meat processors, asserting that the high cost of compliance with Federal requirements are barriers to entry and/or survival”. Earlier this month, Lucas introduced the RAMP-UP Act which would establish a program to help smaller meat processors make facility upgrades to help them move to Federal Inspection and sell their products across state lines.

In addition, Lucas believes foreign ownership of United States meat processing facilities should be further scrutinized. Foreign ownership of U.S. farmland and agricultural businesses has steadily increased, yet USDA lacks the necessary authority to review food and agricultural transactions to ensure the safety and resiliency of the U.S. food supply chain. In order to ensure USDA has such authority, Lucas introduced the Agricultural Security Risk Review Act, which would formally place the USDA Secretary as a member of the Committee on Foreign Investment in the United States (CFIUS)- a committee that reviews potential national security threats of foreign investment in the U.S.

 

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