Lucas seeks release of beef probe details
U.S. Rep. Frank Lucas, R-Okla., last Friday joined with 24 of his House colleagues to send a letter to U.S. Department of Agriculture (USDA) Secretary Sonny Perdue, requesting that he provide the findings of the Agency’s beef pricing investigation to Congress as soon as possible.
Following the announcement of the USDA’s Packers and Stockyard Division investigation in August of 2019, Secretary Perdue extended USDA’s investigation last month to determine the causes of divergence between live beef and box prices during the COVID-19 pandemic.
“Beginning in the first few weeks of the crisis, cattlemen have seen prices drastically decline, with cattle futures falling 29% between the month of January and April, all-the-while beef prices increased on market shelves. While we do recognize the complexity of the beef markets generally, the devastating effect this has had on many of our constituents in the last few weeks is clear. This is of great concern to us for a variety of reasons but chief among them being the doubt it casts on our markets as a whole. When market participants begin to believe that markets are not competitive or transparent that suspicion has a dangerous industry-wide ripple effect. That is why we applaud you for expanding the ongoing investigation into the cattle market’s reaction to the 2019 plant fire in Holcomb, Kansas to encompass the more recent CV-19 related market concerns. This oversight role the agency plays is an immensely important one that helps ensure that our markets are equipped to function properly,” the members of Congress wrote.
“We are encouraged by the recent steps that the Department has taken to better coordinate with the Commodities Futures Trading Commission (CFTC). We hope that this cooperation yields new insights into the relationship between cattle spot and futures markets. Producers want effective, market-based risk management tools. However, volatility during this pandemic has made market participation difficult to manage and capital intensive.
“It is because of the alarm that is being felt across the country that we write to you today asking that the findings of your investigation be released soon as possible. As policymakers, we rely on these findings to provide clarity and information to make the most informed policy decisions going forward. We look forward to working with you to address these concerns and restore cattle producer’s confidence in the market.”
Lucas said in a news release that he continues to be supportive of USDA’s actions of launching an investigation into beef pricing margins to determine if there is any evidence of price manipulation, collusion, restrictions of competition or any other unfair practices.
“The oversight role that USDA and the U.S. Department of Justice have over these markets is a key aspect of cultivating producer confidence in our markets. Right now, that confidence is waning in the countryside and I hope that this letter prompts the Agency to release their findings as soon as possible. The Agency’s report will provide much needed guidance and insight into what steps may need to be taken in order to ensure that the markets are functioning properly so we can work to put the trust of cattlemen and women across the country back into the markets. As a policy maker and a lifelong cattleman, restoring faith in our markets is my top priority,” Lucas said.