USDA finds coronavirus-related meat plant shutdowns behind cattle, beef price disparity
The report found COVID-19 disrupted the meat market, production and sale of beef in the US
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The U.S. Department of Agriculture revealed in a report that the coronavirus pandemic disrupted the meat market's production and the sale of beef in the U.S., but did not specify any violations of federal law regarding a disparity between the price of beef at grocery stores and how much farmers are getting paid.
Ranchers saw cattle prices drop after a temporary closure of slaughterhouses during the coronavirus pandemic while limited meat at grocery stores caused prices to surge, according to a 20-page analysis by the USDA.
The USDA noted a record gap in beef and cattle prices during COVID-19 increasing to nearly $2.79 a pound, the most its been since 2001, according to the report.
Ranchers saw cattle prices drop after a temporary closure of slaughterhouses during the coronavirus pandemic while limited meat at grocery stores caused prices to surge, according to USDA report. (iStock)
The report describes how a 2019 fire at a Tyson Foods beef plant in Holcomb, Kansas, and the COVID-19 pandemic resulted in delays across the meat processing industry, leading to a drop in demand and pricing for cattle. Consumer demand, however, continued and heightened during the pandemic as shoppers stocked up on meat at grocery stores.
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Disruptions in meat production peaked when almost 40 percent of the country’s beef processing capacity stopped due to plant closures after employees contracted COVID-19.
In the report, the USDA called for more pricing transparency released to the public and said amendments to the Packers & Stockyards Act, which uphold fair competition in the market, are needed.
Beef prices more than doubled in May as manufacturers blamed shortages on processing backups caused by employee absences at meatpacking plants. The Justice Department continues to examine allegations of price-fixing across the meat industry as consumers and grocers call out price hikes and COVID-19 related shortages. The DOJ's antitrust division in June subpoenaed Tyson Foods, Cargill, JBS SA and National Beef, which control a majority of the market.
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“There’s little doubt that something is wrong when consumers are paying higher prices for meat and at the same time America’s farmers and ranchers are being paid less,” American Farm Bureau Federation President Zippy Duvall said in a statement.
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The Associated Press contributed to this report