Fact check: Cattle farmers are paid less, consumers pay more amid beef shortage
Corrections & Clarifications: This story has been updated to correct the use of fat versus feeder cattle, and to include market prices for live cattle.
The claim: There's no shortage of beef, but consumers pay more while cattle farmers lose money
Are consumers paying more for beef while farmers lose money?
That claim appears in a post May 22 by Facebook user Rick Davis. Meat processing companies such as Tyson Foods, JBS, National Beef and Cargill are "stealing" from cattle farmers by paying less for beef while charging more to the consumer, he said.
Davis claimed that the sale price of "fat," or live cattle dropped from $1.55 a pound to 91 cents a pound during an unspecified time frame. Yet corporations blame the rising cost of meat at grocery stores on shortages caused by the coronavirus outbreak, Davis wrote.
"THERE IS NO BEEF SHORTAGE!! Someone is profiting huge off the backs of Farmers and sticking it to the consumer on the other end!!!? THIS IS A TRAVESTY AND NEEDS TO STOP!!" Davis wrote.
USA TODAY could not reach Davis for comment.
Is there a beef shortage?
The beef industry has taken a hit in recent months because of business closures, stay-at-home orders in many states and quarantines during the coronavirus outbreak.
USA TODAY reported that the number of coronavirus cases tied to meatpacking plants passed 10,000 in early May, preceding shutdowns of at least 40 meat slaughtering and processing plants for several weeks.
Beef and pork processing was reduced by 40% from last year, according to The Associated Press. The number of meat items available for purchase was limited as a result, the Milwaukee Journal Sentinel reported.
Are consumers really paying more for cheaper beef?
The 52-week low for live cattle prices was 81 cents a pound, according to Business Insider.
In the past six months, live cattle prices dropped from $1.27 a pound in January to 90 cents a pound on April 30, the last date recorded, Business Insider reported.
Consumer market prices for uncooked ground beef rose by 38 cents a pound, all uncooked beef roasts rose by $1.17 a pound and all uncooked beef steaks rose by a dollar a pound from April to May, according to the U.S. Bureau of Labor Statistics.
Where's the beef ... and the chicken? Should we worry about a meat shortage?
Investigating the difference
Secretary of Agriculture Sonny Perdue acknowledged the discrepancy in farm-to-market beef prices in a tweet April 8 and committed to an investigation.
"(USDA’s) Packers and Stockyards Division will be extending our oversight to determine the causes of divergence between box and live beef prices, beginning with the Holcomb Fire in KS last summer and now with COVID-19," Perdue tweeted.
"Holcomb Fire" refers to a fire that ravaged a Tyson meatpacking plant in Holcomb, Kansas. The plant produced about 5% of the nation's beef, according to KCUR News.
Dirk Fillpot, a communication coordinator for the USDA, said the agency is still monitoring the situation months after Perdue's statement.
"USDA is actively monitoring all food and agriculture commodity markets and the food supply chain during the COVID-19 outbreak. USDA’s Agricultural Marketing Service continues to monitor market conditions and conduct economic analysis on the poultry and livestock industry," Fillpot wrote in an email.
Twenty senators and 11 state attorneys general requested federal investigations into market manipulation by the meat industry, Politico reported.
Kansas Attorney General Derek Schmidt is one of the 11 attorneys general who signed a letter to U.S. Attorney General Bill Barr asking the Department of Justice for an investigation. Other signers included Attorneys General Keith Ellison of Minnesota and Tim Fox of Montana.
“The underlying frustration of many cattle producers and feeders boils down to this: Why are they being paid significantly less for live cattle when consumers are paying more for beef on the grocer’s shelf? It is a reasonable question that deserves a review and fully informed answer,” Schmidt said, according to a news release May 28.
Brianna Herlihy, a public affairs officer for the DOJ, told USA TODAY via email, "Consistent with department policy, we cannot confirm or deny the existence of an investigation."
Our rating: Partly false
We rate this claim PARTLY FALSE, based on our research. It is true that there is a difference in the prices consumers pay for meat at grocery stores and the prices for cattle being paid to farmers. The federal government is investigating potential market manipulation by meat processing companies. It is false to declare there is no meat shortage. Processing plant shutdowns during the coronavirus outbreak have significantly cut the amount of beef and pork processed this year.
Our fact-check sources:
- USA TODAY: Meatpacking industry hits grim milestone of 10,000 coronavirus cases linked to plants
- Associated Press: Meat shortage caused by virus could hurt supply
- Milwaukee Journal Sentinel: Get ready for higher prices at the grocery store. It's COVID-19's fault
- Business Insider: Live cattle commodity price information
- U.S. Bureau of Labor Statistics: Average retail food and energy prices
- U.S. Agriculture Secretary Sonny Perdue, tweet April 8
- KCUR News: A welding torch triggered a Kansas meatpacking plant fire and a price spike followed
- Politico: ‘Something isn’t right’: U.S. probes soaring beef prices
- Kansas Attorney General Dereck Schmidt, letter May 28 to U.S. Attorney General William Barr
- Office of Kansas Attorney General, news release May 28
Contributing: The Associated Press
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