WASHINGTON – U.S. Senator Debbie Stabenow (D-Mich.), Chairwoman of the U.S. Senate Committee on Agriculture, Nutrition, and Forestry, today released the following opening statement at the hearing titled, “Examining Markets, Transparency, and Prices from Cattle Producer to Consumer. Live video of the hearing is available here.
Stabenow’s statement, as prepared for delivery, follows:
I call this hearing of the U.S. Senate Committee on Agriculture, Nutrition, and Forestry to order. I first want to thank the members of the Committee on both sides of the aisle who have requested that we have this important hearing. We are going to focus specifically on our cattle markets today. Many of us have heard from producers concerned with a lack of transparency and competition.
These farmers and ranchers also raise concerns with concentration in the packing industry, potential market manipulation, lack of access to small- and mid-size plants, and a range of other issues.
This is an important conversation as the Committee considers reauthorization of the Livestock Mandatory Reporting Act, and as we oversee implementation of $4 billion in funding to strengthen the food supply chain that I fought to include in the American Rescue Plan. USDA announced a broad outline for using these funds earlier this month, which will include supporting new and expanded regional processing capacity.
Just this week, USDA also announced a new grant program to help small processors upgrade their plants to meet Federal inspection standards. That will help smaller processors boost their capacity and meet increased demand while providing more opportunities for small- and mid-sized livestock producers in Michigan and nationwide.
Still, we have work to do. Several of our Committee members have introduced proposals to address these issues of transparency, competition and processing capacity. I look forward to discussing those proposals further. Above all, we need to talk about how to make our food system more resilient. The pandemic made clear how important that is. Early last year, shifts in demand forced producers to plow under crops and dump milk. At the same time, consumers panicked at empty store shelves, and food banks faced lines of waiting cars a mile long.
Compounding this disaster was the failure of many meat processors to adequately protect their workers from COVID-19, resulting in tens of thousands of cases and hundreds of deaths. These outbreaks caused plants to shutter and forced many producers to euthanize animals they couldn’t get to market. The price livestock producers received plummeted, while consumer prices surged. In an effort to stabilize the market, Congress stepped in to provide assistance for workers and producers.
Cattle producers in particular received $6.45 billion to offset losses. And just last week, Secretary Vilsack announced resources to keep employees safe with Pandemic Response and Safety Grants. However, these only help mitigate some of the effects. Many of the vulnerabilities exposed by the pandemic still exist. We were reminded of that in May when a ransomware attack froze all of Brazilian-owned JBS’s North American processing. One attack on one company halted one fifth of U.S. meat processing capacity. And the issue was only resolved, according to reports, after JBS paid $11 million in ransom. Concentration and consolidation clearly play a large role in many issues affecting the industry.
For example, USDA’s Packers and Stockyards Division data show that four companies account for 85% of fed cattle slaughter. With fewer companies – and more foreign-owned companies –controlling more of the marketplace, there is a widening gap between those giant players and the small- and medium-sized processors that many local farmers and ranchers count on.
What happens when farmers and ranchers have fewer options? What are the immediate effects? And what are the unintended consequences? Those are the questions I hope we can begin to answer today. With that I’ll turn to Ranking Member Boozman for any opening remarks he’d like to make.