YOU ARE HERE: LAT HomeCollections

Meatpackers Probe Finds No Evidence of Price-Fixing

Agriculture: Market forces deemed responsible for beef slump.

June 19, 1996|From Associated Press

WASHINGTON — An investigation of cattle purchases by the nation's top four meatpackers last year found no evidence of price-fixing or that their control of the slaughter market depressed prices, the Agriculture Department said Tuesday.

The investigation, which focused on Kansas, concluded that market forces caused prices to fall sharply last spring. A 10-year low in cattle prices has led ranchers to blame the top four meatpackers, which buy and slaughter more than 80% of all cattle.

Meatpacker concentration has become a political issue in farm country, especially in the U.S. Senate race in South Dakota between Rep. Tim Johnson, a Democrat, and the incumbent Republican Larry Pressler. Agriculture Secretary Dan Glickman, too, has made speeches complaining about concentration.

The investigation by the department's Grain Inspection, Packers and Stockyards Administration reviewed four months' worth of purchases in Kansas by the four companies: IBP Inc. of Dakota City, Neb.; Montfort Inc., of Greeley, Colo., owned by ConAgra Inc.; Excel Corp. of Wichita, Kan., owned by Cargill Inc.; and National Beef Packing Co. of Kansas City, Mo., a unit of Farmland Industries Inc.

The companies' Kansas slaughterhouses accounted for almost a fourth of the meat produced in the United States during the four months.

The investigation examined procurement data covering February through May 1995 and included a look at more than 10,000 cellular telephone calls made by 40 cattle buyers for the firms in question.

"No evidence suggested that the buyers were using their cellular phones to collude while purchasing livestock," the investigative summary said.

The investigators looked at purchases by IBP in Holcomb and Emporia, Kan.; National Beef in Dodge City and Liberal; Montfort in Garden City; and Excel in Dodge City. The companies account for practically all the beef slaughtered in Kansas.

Investigators looked at 15,000 transactions covering more than 2 million head of cattle.

Results were released as the Senate Agriculture subcommittee on research, nutrition and general legislation opened a hearing on concentration in the livestock industry.

Many cattle suppliers believe that concentration of meatpacking capacity has contributed to the decline in cattle prices culminating in the 10-year price bottom this spring. Others argue that the slump is the result of oversupply, aggravated by drought and high feed prices.

The department said it is conducting similar investigations of cattle pricing in Texas and hog pricing in Iowa and Minnesota.

Los Angeles Times Articles