The Justice Department and multiple state attorneys general are engaged in an ongoing investigation into potential price fixing by the nation’s four largest beef processors, according to previously unreleased documents acquired by Agri-Pulse.
A confidentiality agreement signed by officials from both the DOJ and the Idaho Attorney General’s office in June of 2020 confirms that the agencies are looking into claims that Cargill, JBS, National Beef and Tyson Foods coordinated to "reduce fed cattle slaughter, decrease the prices of fed cattle and/or increase the prices of boxed beef.”
Eleven attorneys general and 19 members of Congress sent letters to DOJ earlier that year urging it to look into potential price-fixing in the beef industry after they noticed disparities between the price of live weight cattle and the retail cost of boxed beef sold to consumers. While an unnamed source told Bloomberg that an investigation was underway, DOJ never acknowledged it publicly.
Agri-Pulse obtained the confidentiality agreement and the emails through a public records request to the Idaho Attorney General’s Office. These documents — signed by Dorothy B. Fountain, senior counsel and the director of risk management for DOJ’s antitrust division — confirm the agency opened an investigation into the four companies.
Both the DOJ and the Idaho Attorney General's Office declined to comment. A spokesperson for the Nebraska Attorney General's office said they "do not comment on ongoing investigations."
Brett Delange, a deputy attorney general in Idaho, signed the confidentiality agreement, confirming his state’s role in the investigation. Nebraska assistant attorney general Joseph Conrad was included in one of DOJ’s emails on the subject, which points to Nebraska’s involvement as well.
It's unclear to what extent other states are looking into the case. A comment from a spokesman for the South Dakota attorney general indicated that his office was helping with the investigation, but spokespeople for attorneys general in Arizona, Colorado, Iowa and Montana would not confirm or deny their participation.
Agri-Pulse reached out to the offices of the attorneys general in North Dakota, Wyoming, Missouri and Minnesota, but did not get a response.
Bill Bullard, CEO of cattle producers group R-CALF USA, said it's not unusual for state attorneys general to collaborate with the DOJ on antitrust investigations. For example, he noted that attorneys general from 12 states helped the DOJ block a merger between JBS and National Beef in 2008.
“State attorneys general have a keen interest in ensuring that cattle producers within their states are treated fairly and that the packers aren't violating antitrust laws,” Bullard said. “So there's precedence for state attorneys general to be involved in this very type of a case.”
The companies' top executives have blamed the price disparities between packers and producers on high beef demand, labor shortages and inflation. During a House Ag Committee hearing in April, all four CEOs denied colluding to fix prices.
When directly asked by Rep. David Scott, D-Ga., whether they had conspired with other meatpacking companies to fix prices, Cargill CEO David MacLennan, National Beef CEO Tim Klein and Tyson Foods CEO Donnie King each answered with a firm “No.” Tim Schellpeper, the CEO of JBS Foods, said, “Not that I am aware of.”
A Cargill spokesperson said the company has "fully cooperated with any requests or inquiries pertaining to the investigation." A Tyson Foods spokesman declined to comment on the investigation, though he shared a statement published by the company in April arguing that market forces were the cause of price disparities.
JBS and National Beef did not respond to Agri-Pulse’s request for comment.
The case is already two years old, though Bullard said antitrust investigations are often lengthy affairs. But some beef groups and members of Congress are pressing the DOJ to break its long-standing silence on the matter as they grow restless waiting for answers.
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The National Cattlemen's Beef Association, which began voicing concerns about potential price fixing in late 2019, called for an update from the DOJ in February after JBS agreed to pay $52.5 million to settle a price-fixing lawsuit. The company did not admit to any wrongdoing.
"The DOJ has an obligation to finish their investigation," NCBA CEO Colin Woodall said. "Cattle producers do not have years to wait for the government to determine whether there has been wrongdoing, we demand answers now."
A spokesperson for Axne said her office had not yet received a response from the DOJ regarding the letter.
“Right now, consumers are facing high meat prices and local producers are being forced out of business, and an update on the investigation into the Big Four meatpackers by the DOJ will help us restore market transparency and reinforce our enforcement capabilities,” Axne told Agri-Pulse in a statement. “I’m committed to helping Iowa’s local producers keep their doors open, and will continue working on this issue in Congress as this investigation continues.”
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