An investigation into price gouging by major meat packers is a welcome action for Wyoming beef producers, Jim Magagna, Exeuctive Vice President of the Wyoming Stockgrowers, said on Friday.
Magagna, appearing on Town Square Media’s “Economy Town Hall” broadcast on the company’s Wyoming radio stations, said the U.S. Department of Agriculture’s formal investigation on pricing practices in the meat industry is necessary.
He said the problem is that there are thousands of beef producers in America but there are only four major meat packers and those meat packers get to control the price of beef for consumers.
“It is hard not to see that they are making huge return on their investment buying live cattle and then marketing box beef,” Magagna said. “And that price of that box beef has gone up very significantly.”
How big is the disparity?
Lex Madden, from the Torrington Livestock Markets, told the Casper Star Tribune that meat packers make between $500 to $600 per head of cattle while producers earn $105 to $100.
“It’s just frustrating how greedy and ruthless the packers are,” Madden told the newspaper. “They’re smart business people but they’re so ruthless and greedy that they do not care about the American rancher, farmer or producer.”
The U.S. Department of Agriculture announced in early April it would look into the difference between the prices received by meat packers for beef and what is paid ranchers.
In addition to the U.S. Department of Agriculture’s investigation, Magagna said the Wyoming Stockgrowers Association has reached out to President Trump and Attorney General William Barr to conduct an investigation.
“We’ve asked for a full investigation because we need to determine if laws are being broken,” he said.
“Beyond that, this is a wake-up call for our industry. We face some fundamental structural problems,” he said.