August 4, 2020
Senator: “Our ranchers, and the American public, are being taken advantage of in the midst of a global public health and economic crisis”
(U.S. Senate) – As part of his continuing efforts to provide critical relief to livestock producers who have seen cattle prices plummet over the last year, U.S. Senator Jon Tester today took to the Senate floor to urge his colleagues to support his bipartisan legislation that would hold corporate meat packers accountable, level the playing field for ranchers, and help stabilize beef prices at American supermarkets.
Tester wrote the bill along with Senator Chuck Grassley (R-Iowa) to combat price fixing by corporate meat packers, which is severely damaging the bottom lines of Montana livestock producers. The legislation requires large-scale meat packers to increase the proportion of negotiable transactions that are cash, or ‘spot,’ to 50 percent of their total cattle purchases. This would improve accuracy of formula pricing—which currently accounts for a significant portion of transactions—and increase transparency for producers, feeders, and consumers.
“From early April to the middle of May, the price difference between the cattle American ranchers were selling and the beef that was shipped to stores across the country increased by three hundred and twenty three percent. Mission Control: we have a problem,” said Tester. “Our ranchers, and the American public, are being taken advantage of in the midst of a global public health and it has also driven us into an economic crisis… This [bill] would hold the corporate packers accountable; make pricing more fair for our producers, cow calf operators, and small and medium sized feeders; and bring more money into rural economies.”
Tester continued: “The fact is, we need more support from this body, and we need our colleagues on both sides of the aisle to sign on to this critical legislation so that we can ensure that the folks who have been raising our food for generations are able to meet their bottom lines.”
Tester and Grassley’s bill is the second plank of Tester’s Rancher Relief Plan, which aims to provide certainty to Montana’s small and medium sized cow calf operators. The legislation would prevent packers from using the small percentage of spot transactions they accept to help set formula prices far lower than they should be, and would give producers more ability to negotiate prices and create larger, more accurate formulas and futures. Tester also urged his colleagues to support for his New Markets for State-Inspected Meat and Poultry Act, a bill that would cut red tape for Montana meat producers, when it comes up for a vote later this afternoon.
Following a fire at a beef packing plant in Holcomb, Kansas last year that halted 5 percent of U.S. beef production, Tester and Grassley demanded that the United States Department of Agriculture (USDA) conduct an investigation into price fixing by large-scale meat packers. Though the investigation is still ongoing, USDA uncovered that the fire, as well as significant plant closures in April and May due to the COVID-19 pandemic, tanked cattle prices and raised boxed beef prices nationwide, hurting producers and consumers while packers pulled in record profits.
As a small scale producer in rural Montana, Tester has been fighting tooth and nail to bring critical relief to Montana ranchers and farmers. Earlier this year, he successful demanded that Attorney General William Barr, in coordination with USDA, open an investigation into reports of price fixing in the cattle market in the wake of the coronavirus pandemic. Additionally, after Montana’s ranchers saw the steepest price decline for cattle in forty years, Tester pushed Secretary of Agriculture Sonny Perdue to take immediate action to stabilize beef markets.