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Law360 (April 2, 2020, 9:25 PM EDT) -- Iowa Sen. Chuck Grassley wants the U.S. Department of Agriculture to investigate why cattle prices are down even though Americans are buying more meat amid the coronavirus pandemic, saying ranchers aren't getting a fair shake.
Meatpackers are the only ones benefiting from consumers' rush to stock up for a long stretch at home, while the farmers and ranchers who raise and sell the cows have seen the value of cattle drop, the Republican lawmaker said in a letter made public Wednesday.
"With the shelf price of meat at record highs and with the high rate of concentration in the meatpacking industry, there are concerns that the difference in these margins is the result of illegal practices," Grassley wrote to the USDA and Attorney General William Barr.
The senator wants the U.S. Department of Justice and the USDA to launch an investigation into the "potential market manipulation and unfair practices within the cattle market," saying he has been inundated with calls from constituents who say "the current discrepancy between high shelf price and decreased cattle price does not make sense."
Cattle prices have dropped 16% since early February, according to the senator.
While Grassley didn't mention the coronavirus pandemic specifically, his office confirmed to Law360 on Thursday that the spike in meat purchases referred to in the letter resulted from the rush on grocery stores triggered by the spread of the novel coronavirus.
Store shelves around the country have been stripped bare as shoppers pack their carts beyond what the supply chains are used to replenishing, in some cases driven by panic and in others by a desire to hunker down at home with family members who otherwise often eat their meals elsewhere.
When Grassley sent the letter on Tuesday, millions of schoolchildren across the country had already been home for weeks, instead of attending schools that provide two meals a day. With millions of adults furloughed, laid off or working from home, the amount of food made and prepared at residences saw a sharp increase.
But only meatpackers are benefiting from the jump in sales, according to Grassley. And meatpacking is an exclusive club, with about 80% of the country's beef processing done by four companies, leaving the industry susceptible to antitrust influence, according to his letter.
The North American Meat Institute and the American Association of Meat Processors did not immediately respond to requests for comment late Thursday.
--Editing by Jill Coffey.
For a reprint of this article, please contact reprints@law360.com.
