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Grassley: Consolidation puts cattle farmers ‘on life support’
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Grassley: Consolidation puts cattle farmers ‘on life support’

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Family cattle farmers are the lifeline of rural communities across Iowa and the country, Sen. Chuck Grassley, R-Iowa, told the Senate Judiciary Committee on Wednesday, but “they’re currently on life support” because of consolidation in the meatpacking industry.

Grassley, a farmer and ranking Republican on the committee, has been expressing concerns about consolidation in agriculture for years. Now four packers — JBS, Tyson, Cargill and National Beef — hold a tremendous amount of market power because they control more than 80% of the cattle market, he told the committee.

Virus Outbreak Iowa Meat Plant

The coronavirus outbreak at Tyson Foods' pork processing plant in Columbus Junction, one of the first outbreaks at an Iowa meatpacking plant, was more severe than previously known, with over twice as many workers becoming infected than the Iowa Department of Public Health publicly confirmed. 

“Independent cattle producers in Iowa and across the country deserve a free and fair market,” Grassley said during a hearing, Beefing up Competition: Examining America’s Food Supply Chain. However, the share of cattle traded on the cash market has dropped from more than 50% in the early 2000s to about 20% today.

Charles Grassley

Sen. Charles Grassley, R-Iowa

The coronavirus pandemic exposed problems in the food supply chain. According to the U.S. Department of Agriculture, for every one dollar Americans spend on food, only 14.3 cents go to farmers even though the supermarket price of beef has increased.

“I want to make it clear that I’m not upset about paying more for my beef. I’m upset the farmer isn’t getting paid,” Grassley said.

“The market’s clearly not working fairly when demand is extraordinarily strong and supply is strong, but the packers are making record profits and ranchers are losing money.”

According to USDA data, Iowa had 3.71 million head of cattle in 1997. That grew to nearly 4 million but has dropped to 3.65 million today. The number of Iowa farms that sold cattle decreased 41% to 23,400 between 1997 and 2017.

031621-qc-nws-meatshortage-1

Cows stand in a pen at the Vaughn Farms cattle operation, March 2, near Maxwell, Iowa. Sudden meat shortages last year because of the coronavirus led to millions of dollars in federal grants to help small meat processors expand so the nation could lessen its reliance on giant slaughterhouses to supply grocery stores and restaurants. 

Also Wednesday, Iowa 4th District GOP Rep. Randy Feenstra, who represents the third-largest livestock-producing congressional district in the nation, criticized the disproportionate market share meatpackers hold in the beef industry.

Randy Feenstra

Randy Feenstra makes his acceptance speech surrounded by family after winning Iowa's 4th Congressional District race Tuesday, Nov. 3, 2020, at the Hull Public Library in Hull, Iowa.

“I’m not calling for the government to mandate changes in all these areas,” Feenstra said at a hearing by the House Livestock and Foreign Agriculture Subcommittee. Instead, he called for Congress to focus on transparency, competition and processing capacity to “naturally resolve some of these serious issues.”

With price contracts and control of processing, “the system is set up where the packers will never see a loss — creating massive guaranteed profits while rural farmers lose their livelihoods,” Feenstra said. Producers in his district tell Feenstra they are losing $150 or more on every head sold.

“Packers like to blame the Tyson Holcomb fire, COVID-19 pandemic and the cyberattack on JBS, yet fail to see the price gouging and price-fixing that is occurring,” Feenstra said.

Grassley has legislation pending to address concerns about cash trade in the cattle market and another bill with Montana Democratic Sen. Jon Tester, also a farmer, to create a special investigator for competitive matters within USDA’s Packers and Stockyards Division.

Meatpacking-Local Processing

U.S. Secretary of Agriculture Tom Vilsack, at podium, speaks alongside Rep. Cindy Axne, D-3rd, left, inside Rustic Cuts Friday, July 9, 2021 in Council Bluffs, Iowa. U.S. Agriculture Secretary Tom Vilsack announced his plan to spend $500 million to encourage the construction of smaller meat processing plants located closer to farmers who raise chickens, pigs and cows with the goal of diversifying an industry now consolidated among a few large processors. (Joe Shearer/The Daily Nonpareil via AP)

He credited the Biden administration and USDA Secretary and former Iowa Governor Tom Vilsack for actions to restore the Packers and Stockyards Act to fight unfair practices and provide assistance to small and medium-size meat processors.

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