Latest Antitrust lawsuits regarding beef prices

[Donw]

On October 4th the McDonald corporation filed an antitrust lawsuit against JBS, Tyson, Cargill and National Beef for artificially raising beef prices. This lawsuit follows other similar lawsuits filed by companies such as Target, BJ.s Wholesale Club, Gordon Food Service and Glazier Foods as well as cattle growers.

“In its complaint, McDonald’s alleges that the price per hundred pounds of cattle had historically stayed within $20 to $40 of the average price per hundred pounds of wholesale beef. But that correlation started to change dramatically around 2015, the suit alleges: By 2021, the difference had ballooned to $156.50. The latest data from the U.S. Department of Agriculture supports the 2021 farm-to-wholesale price spread.“

I read the McDonald’s complaint and found these two charts which I thought interesting:



All allege a conspiracy between the meat packers.

[Mosca]

I just read that article. They haven’t had much success with that argument so far, but it might go somewhere this time. There is some more hard evidence, from what I understand.

[Donw]

If you are referring to the rancher’s suit it was dismissed on standing as none of plaintiffs had actually sold cattle to any of the named companies. The other suit I know of settled for 52+ million. Of course there are probably others I’m not familiar with.

[Mosca]

Yep, I think they had a decent argument for indirect harm, but the courts saw otherwise. It will be interesting, because this time it’s money against money!

[Uncle Bob]

As these cases run their course we'll see if there is any substance to the claims. Emotionally people will believe it, but can it be proven? That said, folks have short memories. We went through a couple years of drought in 22 and 23 where cattle ranchers were culling their herds, reducing inventory significantly. Think supply/demand. You don't replace those reduced stocks/herds overnight. It takes a minimum two years to grow a calf to decent slaughter weight, so we're still feeling the effects of decisions a couple years ago.

[Dan Deter]

But in that case the spread should conceivably stay the same. Price goes up but the cattlemen get more because of the limited supply. That doesn't seem to be what's happening here.

[Oak Smoke]

The cattlemen I know best were deeply affected by the fires in the Texas panhandle. Over half the cattle in Texas are in the panhandle. Thousands of those cattle were lost in the fires. It also burned stored feed such as bales of hay and destroyed miles and miles of fence. The cattleman’s cost to do business has gone way up so if he doers get an extra dollar he already owes it to his banker.

[Oak Smoke]

The cattlemen aren’t seeing the huge increase in profits as you can see. There is a new company being put together by a group of cattlemen that will process and market beef from the ranches not a third party. This should be a win for both ranchers and consumers. The people who have never had cow shit on their boots or processed a steer are making huge profits because the path to retail goes through them. That is about to change. One of Texas finest cattlemen Monty Cluck is as I understand leading this effort.

[Sid P]

Sounds like a great idea that’s long overdue. I hope it helps.

[CaptainMike]

I don't follow cattle prices closely, but our local auction yard is seeing historically high prices across the board, especially for feeder steers. This is their posting for feeders from last Saturday's sale: 400# to 500# 3.05 to 3.575. That's almost $1800 for 500# steer right off the ranch.

To my way of thinking that's inflationary prices, but it is organic rather than manipulated. At least at that level. However, I think we have to face what appears to be the fact that virtually every consumable or service we use or buy is going to be squeezed and manipulated for every drop of profit possible. The concept of 'value' for consumers is dead. This is the world we have created for ourselves.

[Smoker_Boy]

snip...

The concept of 'value' for consumers is dead.

This is the world the corporations have created for themselves.

Fixed that for ya...

[CaptainMike]

It is much more complex than that, and WE have allowed it. WE also have the power to correct it, but that takes courage, sacrifice and a collective will. Those virtues are a rare commodity.

[Smoker_Boy]

CaptainMike - I'm sure you're correct in your views, but I had nothing to do with this.
Hence my objection to your term of we.

[Smoker_Boy]

CaptainMike - I wasn't snipping at you.
I just have no faith that WE can fix anything.

[Sid P]

I’d love for them to find evidence of price fixing, but markets are seldom predictable. They’ll need a hell of a lot more evidence than that graph.

[Jerod Broussard]

A graph of who has more lobbyists might be better.

[Huskee]

So if they're found guilty who gets refunded? Us? Nah. Therefore, I'll move on to other things to read and save my energy.

[Draznnl]

Huskee @DogFacedPonySoldier no offense taken. Mine was a weak attempt at humor. Just remember, lawyers need to buy briskets too. 🥸

[DogFaced PonySoldier]

Draznnl - don't worry, plenty of people resent me because of my degree, too. Of course, a whole lot of them make a lot more money than do, especially these days. I'm an outlier, though, most people in my field are considered successes.

[Donw]

Just need to point out this suit as well as the others mentioned are not class action suits. Only the corporations mentioned are involved.

[Smoker_Boy]

Deleted. Bordering on political.

[yakima]

North Platte, NE.. Sustainable Beef. A farmer/rancher funded start up meat packing plant, under construction, hope to start operation 2025. Will run like a co-op. Plan to process about 1,500 head/day. WalMart has contracted to be primary customer.

[Oak Smoke]

That’s great! I wish them all the success they deserve.

[Bkhuna]

I got a 50¢ coupon for a can of tuna after a Star-Kist class action settlement.

Maybe there's a slider in my future.