WASHINGTON -- Members of the Senate Judiciary Committee expressed concerns Wednesday about the dominance of a handful of meatpackers, questioning whether the market is sufficiently competitive.
During a hearing titled "Beefing up Competition: Examining America's Food Supply Chain," Tyson Foods Group President of Fresh Meats Shane Miller argued that unforeseen events have affected the markets.
He emphasized Tyson's investments in rural America and portrayed the existing market as healthy.
Tyson, based in Springdale, had $43.2 billion in sales in fiscal 2020, according to its annual report. It had roughly 139,000 team members as of Oct. 3, including 120,000 in the United States.
U.S. Rep. Chuck Grassley, R-Iowa, who had requested Wednesday's hearing, questioned whether the existing system is fair.
"Family farmers who feed cattle are the lifeline of rural communities across Iowa, and they're currently on life support," he said. "Today, only four packers -- JBS, Tysons, Cargill and National Beef -- control more than 80 percent of the cattle market. These companies hold a tremendous amount of market power. Independent cattle producers in Iowa and across the country deserve a free and fair market," he said.
"Many of us believe that packers have so much power that they unfairly leverage it against other players in the market and to the detriment of the consumer," Grassley said.
"According to USDA, for every one dollar Americans spend on food, only 14.3 cents go to farmers. Meanwhile, the retail price of beef for consumers has increased and remains high. 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. As the first link in our food supply chain, farmers and ranchers assume incredible risk with each planting and animal raised, but their livelihood depends on receiving a fair price," he added.
Cattle prices dropped in 2020, in the midst of the covid-19 pandemic, while beef prices rose.
In his testimony, Miller, an Iowa resident, emphasized his ties to the state Grassley represents.
"I speak to you today, first and foremost, as a grandson of Iowa farmers," he said.
"In rural communities across the country, every year, Tyson invests more than $15 billion with over 11,000 independent pork producers, cattle producers and poultry producers," he said.
"We rely on these farmers and producers, and want them to be successful, because without a steady pipeline of livestock, we're unable to run our business," he said.
In his testimony, Miller portrayed the price differential as an anomaly.
"The present divide between live cattle and box beef prices is not the result of a consolidated industry, lack of competition or the cash markets," he said.
"Instead the present spread between live cattle and beef prices has everything to do with the law of supply and demand," he said. "Multiple unprecedented market shocks, including a pandemic and severe weather conditions this past year, led to an unexpected and drastic drop in processors' abilities to operate at capacity. This led to an oversupply of live cattle and an undersupply of beef, all while demand for beef products is at an all-time high."
"It should not surprise any of us that as a result, the price for cattle fell while the price for beef rose," he said.
During his testimony, Miller portrayed Tyson as "committed to ensuring fair compensation for ranchers, and farmers, and we're proud that we have relationships with producers of all sizes that stretch back for generations."
In an interview, Arkansas Farm Bureau livestock economist Jessica Richard said Arkansas cattlemen would like to see greater "price transparency" moving forward.
"We're seeing high retail beef prices, right? But our cow/calf guys are, relatively speaking, not having as good of a time right now as they have enjoyed in the past," she said.