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Jones calls for investigation of potential price fixing by meatpackers

Brandon Moseley

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U.S. Senator Doug Jones, D-Alabama, has joined other U.S. senators in calling for an investigation into potential price-fixing by the nation’s four largest meatpackers.

Many farmers and ranchers claim what they get paid to produce beef has no relation to what consumers are getting charged in the stores and that the big four beef packers are pocketing the profits, while farmers suffer and consumers struggle to pay for the meat on the table.

“I am once again calling on the DOJ to investigate potential price-fixing in the meat-packing industry,” Jones said on social media. “In this time of uncertainty, we need to protect our nation’s food producers and make sure we can maintain our food supply.”

In April, Alabama Department of Agriculture and Industries Commissioner Rick Pate asked Jones and Sen. Richard Shelby to ask for an investigation.

Ag commissioner concerned about collapsing beef prices

Jones and the other Senators sent a letter to U.S. Attorney General William Barr.

“We have heard growing concerns from cattle producers and feeders in our states about troubling practices in the cattle industry that the COVID-19 national emergency has intensified, including allegations of market manipulation and coordinated behavior harmful to competition,” the Senators wrote.

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“These serious claims have been relayed in a request for further inquiry by the United States Department of Justice (DOJ) from eleven state attorneys general this past week, in addition to a number of letters from Senators on the matter,” the letter states. “We support these calls to action and request that the DOJ investigate suspected price manipulation and anticompetitive behavior in the highly concentrated cattle industry, in order to identify more clearly the factors contributing to a dire situation for producers.”

Four meatpackers — Tyson Foods, Cargill/Excel, JBS Swift, and National Beef — process over half of the cattle that are butchered in this country and there are a number of regulatory barriers that make entering the industry both expensive and time-consuming.

“The lack of competition in the meatpacking industry has resulted in a vulnerable beef supply chain, which the current national emergency has destabilized further,” the senators wrote. “Recent pricing discrepancies between fed cattle and boxed beef are pushing cattle producers and feeders to the brink, adding to the longstanding concerns stemming from the state of competition among beef packers. Since February, we have seen live cattle prices slump by more than 18 percent, while wholesale beef prices have increased by as much as 115 percent during the same period.”

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With warm weather and more people spending much more time at home rather than at restaurants, the demand for beef and other meat should be at all-time highs.

Unfortunately, COVID-19 outbreaks at slaughter plants have meant that fewer cattle and hogs have been butchered. This has led to a decrease in the prices that farmers and ranchers receive for their animals while the price of boxed beef that the packers sell to the grocery stores has increased substantially.

Most Alabama cattlemen own acreage of grassland and a herd of mature cows. The cows and the bull do what they do naturally and most years each cow has one calf.

The cow cares for the calf to weaning at 180 to 290 days (205 is average) and the rancher sells the calves, usually at an Alabama livestock auction.

Buyers from the plains states come to purchase the 450- to 650-pound calves, which are called “feeder calves.” They go west to be stockered and finished, usually at a feedlot. Finished, also called fat, cattle are then processed — more than 80 percent of the time by one of the big four packers.

Sunday afternoon, the Alabama Political Reporter spoke with Callahan Parrish, a fourth-generation Cattle Farmer. Callahan also owns the Cullman Stockyard and is emerging as an industry advocate.

“The pandemic has unmasked many fundamental problems associated with the current beef production model,” Parrish said. “Industry infrastructure, competitive market access for our producers and food security issues top this list.”

In 2009, the average retail price of boneless sirloin steak was $5.68 per pound. In 2010, it climbed to $6.07 per pound. By 2015, it was $8.29. In 2019, it was $8.48.

The cattle market is much more volatile from week to week, but in 2009 the average liveweight price for a feeder calf was approximately $.94 a pound. It has risen to only $1.43 by 2019.

In the last 12 months the feeder calf price has traded at a high of $1.49 on October 28 all the way down to a low of $1.08 on March 31 at the height of the COVID-19 panic, the lowest the feeder calf price has been on the exchange since October 2010.

Feeder cattle have rebounded somewhat in May and they closed on Tuesday at $1.33. There was a brief two year period from late 2013 to late 2015 where feeder calf prices soared.

When prices crashed in the winter of 2015 — and never came back — the retail price of beef stayed high even though ranchers have gotten less than $1.61 per pound in these last five and a half years.

Those are the Chicago Mercantile Exchange prices. Most Alabama cattlemen do not get those prices. The big packers are located out west in Texas, Kansas, South Dakota, Nebraska as are most of the feedlots so they tend to buy southern cattle at a discount.

Using last week’s USDA feeder calf market report, last week in Alabama steers, medium and large frame thick steers, weighting 550 to 600 pounds, were trading at between $1.20 per pound and $1.37 per pound, depending on what day and what stockyard.

At the same time in Oklahoma the same weight and classification of OK steer calves were trading at $1.4764. Advantage Oklahoma rancher $110.63 per calf.

The same week medium and large frame average heifers weighing 550 to 600 pounds were selling for $1.01 to $1.18 per pound in Alabama. In Oklahoma they were trading at $1.248. Advantage Oklahoma rancher.

The spread might not be this great every week, but in this example a rancher who sold 100 calves, 50 of them heifers and 50 of them steers, would have made $9,953 more if he were the typical Oklahoma rancher versus the typical Alabama rancher.

According to the same USDA report, there were some loads of 600 to 700 pound Alabama heifers trading at below $.90 a pound and we are off of the bottoms that farmers and ranchers experienced in March and April, where prices were disastrously low in many instances.

“We are seeing a lot of our local producers hurting right now due to extreme and unprecedented market volatility,” Parrish said.

This is because our cattle are not processed or fed out in Alabama, but instead are bought by order buyers and shipped out west at a profit. Some ranchers speculate that the Big Four packers are cooperating to set the spot or cash market price for cattle as low as they can, while selling beef at an artificially high price to American consumers.

Some cattlemen have asked for the DOJ to investigate. Last year, the producer group R-CALF filed suit against the Big Four packers alleging unfair trade practices. Southern cattle face continued price discrimination versus plains, Midwest, Texas, and western cattle.

The Big Four packers process all the cattle out west, mix it with Mexican and Canadian calves, another move some cattlemen suggest is to drive down the spot price, and then ship all of that processed beef back to Alabama and the rest of the country. Some cattlemen have suggested that Alabama needs its own packing plants and feedlots to keep the beef closer to consumers.

“Lack of state infrastructure and increasing import issues are adding insult to this injury,” Parrish said. “Alabama Cattle Farmers, retailers and consumers are feeling the heat. As the temperature continues to rise . . . the conversations are getting louder. Not only are the conversations getting louder . . . they are getting exciting.”

We have spent a lot of time talking about agriculture & the importance of protecting our food supply, but the reality is that the farming industry is being left behind & they stand a lot to lose during this pandemic. We must prioritize our farmers & protect our food supply chain.

(Original writing and research by Montgomery area writer Amy McGhee contributed to this report. McGhee’s parents own and operate an Angus beef cattle farm in Tennessee.)

Brandon Moseley is a senior reporter with eight and a half years at Alabama Political Reporter. You can email him at [email protected] or follow him on Facebook. Brandon is a native of Moody, Alabama, a graduate of Auburn University, and a seventh generation Alabamian.

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Congress

Rogers leads Homeland Security Committee Republicans

Brandon Moseley

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Congressman Mike Rogers.

Congressman Mike Rogers, R-Alabama, on Thursday delivered an opening statement highly critical of the Chinese government at a Homeland Security Committee hearing in Washington entitled “Examining the National Response to the Worsening Coronavirus Pandemic.”

“I appreciate you granting my request to allow Members to use the hearing room today,” Rogers said. “We should be conducting our important oversight and legislative business here in Washington. We are much more productive when Members are here, in person, doing our work together. We’ve already proven we can do it safely. I hope we will return to regular order as soon as possible.”

“As you know, I strongly disagree with the Speaker’s unilateral decision to shut down the House of Representatives,” Rogers explained. “We should be conducting our important oversight and legislative business here in Washington. We are much more productive when Members are here, in person, doing our work together. We’ve already proven we can do it safely. I hope we will return to regular order as soon as possible.”

“As I said before, our hearts go out to those who have lost their loved ones to COVID-19 and those who are currently undergoing treatment,” Rogers continued. “COVID-19 is an unprecedented global pandemic that requires an unprecedented response.”

Rogers was highly critical of the Chinese government and their role in the global pandemic.

“Unfortunately, we lost precious time early in the response when China hid the disease from the world,” Rogers said. “For weeks the Chinese Communist Party refused entry to outside medical experts. The Chinese suppressed journalists from reporting. Worst of all, China deliberately withheld evidence of the virus’ structure and deadly spread. During this, the Chinese hoarded life-saving medical supplies and encouraged foreign travel, seeding the virus across the globe. I want to commend Ranking Member McCaul’s work on the Foreign Affairs Committee to extensively document this deadly cover-up in a recent report.”

“It’s clear that China has pulled out all the stops to manipulate everyone from media outlets to the World Health Organization,” Rogers continued. “The WHO maintained for months that China had promptly self-reported COVID-19. They did not. And after months of lying the WHO has come clean. The WHO now says it found out about COVID from media reports and whistleblowers from China. The Chinese Communist Party once again has been caught with blood on its hands.”

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“Facing an extraordinary public health crisis and China’s deadly coverup, the Trump Administration has responded with a whole of government response,” Rogers stated. ”To date, the Administration has – Prohibited the entry of travelers from global hot spots; Invoked the Defense Production Act to increase supplies of critically needed medical equipment, such as ventilators; Coordinated the delivery of over 167 million respirators, 682 million surgical masks, and 17 billion gloves; Sent over $125 billion to the states to support the medical response to COVID-19; Distributed over $500 billion in PPP loans to small business; and Helped facilitate the testing of over 36 million tests. In fact, we are now capable of conducting over 700,000 tests per day. That’s the good news. The bad news is that the number of positive tests are rising in many areas. That’s why it’s so important for all Americans to continue to heed the advice of our federal, state, and local public health officials.”

“I am pleased to see a couple of public health and emergency response officials on the panel today,” Rogers said. “Colonel Hastings currently serves as the Director of Alabama’s Emergency Management Agency. He had a very distinguished 30 year career in the Air Force. For the last 3 years, he has done a tremendous job leading EMA’s response to several natural disasters and now the COVID-19 pandemic. Colonel, thank you for joining us today. I appreciate all the witnesses for appearing. I look forward to hearing how you all are using the emergency funding and resources provided by Congress and the Administration to respond to this crisis.”

“I am also interested in knowing what more Congress can do to help you effectively respond,” Rogers said. “Our country has faced outbreaks of serious disease in the past. In each case, we’ve marshalled our collective resources and ingenuity to overcome the crisis. I’m confident that will be the case with COVID-19.

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Rogers is the ranking member of the House Homeland Committee.

More than three million Americans have been diagnosed with the coronavirus, including more than 48,000 Alabamians. The novel strain of the coronavirus, SARS-CoV-2, shows no sign of slowing anytime soon as 61,864 Americans were diagnosed just on Wednesday. The virus was first identified late in 2019 in Wuhan City, Hubei Province, China late in 2019. The first positive test for the virus in Alabama was in mid-March.

Rogers represents Alabama’s 3rd Congressional District.

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Congress

Perry Hooper endorses Tuberville

Brandon Moseley

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Former State Rep. Perry Hooper Jr., Trump National Victory committee member, formally endorsed former Auburn head football coach Tommy Tuberville for U.S. Senate on Thursday.

“I have known Coach Tommy Tuberville since he first arrived at Auburn in 1999,” Hooper said. “Since day one when I went to watch my sons practice football, he was always talking to me about Republican Party Politics. I knew it was in his blood. Little did I know at the time, I would be joining the President in supporting him for the United States Senate.”

“Coaching football is more about leadership than X’s and O’s,” Hooper continued. “Tommy’s leadership abilities were the first thing that impressed me when we first met. He has been places recruiting that few people running for office have. He has been in some of the poorest neighborhoods in the country, convincing Mommas how he was going to help mold their 17 years old sons into men. He really cares about everyday people and what is best for our neighborhoods and schools. He has been a great teacher of life lessons as well as an outstanding football coach. He brought in former Auburn Linebacker Chette Williams to serve as the Auburn football team chaplain. He is a dedicated Christian and dedicated to his family which includes his former players. This is what this country needs now – leaders not career politicians.”

“Tommy Tuberville is a principled, free market conservative who has the support of President Trump and has put together a great campaign to defeat Doug Jones,” said David McIntosh, president of the Club for Growth PAC “President Trump’s endorsement is by far the most important endorsement a candidate can earn for a Republican Primary, and we are glad to join President Trump in supporting Tommy Tuberville.”

Club for Growth PAC has been strongly supporting Tommy Tuberville for Senate and Barry Moore and Bill Hightower in the Second and First Congressional Districts.

During these turbulent times, the President needs Tommy Tuberville on his team.,” Hooper said. “As the President stated in his endorsement “Tommy Tuberville loves his country and will never let it down”. He is 100 % behind the President and the Trump Agenda. He could easily have retired after his long successful football career, but there is one more chapter in his life – serving in the US Senate. He has been a winner on and off the football field; as Senator he will be a big win for America and Alabama.”

Hooper is a member of the Alabama Republican Executive Committee and a strong supporter of Auburn University athletics.

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Tuberville faces former U.S. Sen. Jeff Sessions on Tuesday, July 14, in the Republican primary runoff. The winner of the Republican nomination will face incumbent Sen. Doug Jones, D-Alabama, in the Nov. 3 general election.

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Sewell announces $4 Million federal grant for the Dannon Project

Brandon Moseley

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U.S. Rep. Terri Sewell

Congresswoman Terri Sewell, D-Alabama, announced Wednesday a $4 million federal grant to be awarded to the Dannon Project through the U.S. Department of Labor’s Pathway Home grant program. The Pathway Home program focuses on assisting justice involved individuals with community re-entry and employment.

“As we continue to reexamine systems of racial inequity and oppression, I am grateful for organizations like the Dannon Project who work to fill in the gaps left by our deeply flawed criminal justice system,” said Sewell. “In a state with one of the most underfunded and violent prison systems, with one of the highest rates of overall incarceration in the country, and where Black Americans are jailed at 3.3 times the rate of white Americans, we can clearly see the need for the work of the Dannon Project. Of course, this funding is just a drop in the bucket of what is needed for true reform, but it is a step in the right direction.”

The Dannon Project is a 501(c)(3) non-profit located in Birmingham, Alabama. The Dannon Project helps non-violent offenders who have been involved in the criminal justice system with re-entry by providing valuable resources such as short-term training, certifications, job placement and case management, beginning six months prior to release.

Kerri Pruitt is the executive director of the Dannon Project.

“The Dannon Project is thankful to receive this award and for the opportunity to make an impact in communities we serve,” said Pruitt. “Under the Pathway Home program, enrolled participants will have the option to follow one or more of three job training tracks: Industry-Recognized Credentials; Pre-Apprenticeship; or Career Pathways. The first two opportunities focus on training and job placement in employment sectors predicted to have the greatest job growth and/or high demand for skilled workers within the major industries of Birmingham’s regional economy. The third option, Career Pathways, will focus on facilitating participants’ enrollment at post-secondary institutions to attain educational credentials for their desired areas of employment.”

State Sen. Cam Ward, R-Alabaster, said that 82 percent of prison releases who get employment never re-offend.

Alabama Department of Corrections Commissioner Jeff Dunn said that 95 percent of the inmates in the Alabama prison system will at some point re-enter society.

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Sewell is in her fifth term representing Alabama’s 7th Congressional District.

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Jones calls for more federal funding, support for state Departments of Labor

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U.S. Senator Doug Jones, D-AL, today is urging Senate leadership for additional federal funding and support for the state Departments of Labor, which have been overwhelmed by the wave of unemployment insurance claims. This also comes as disturbing reports emerge out of Montgomery, where Alabamians have been camping out overnight outside of an unemployment claims center in search of help with their claims.

“As the nation continues to struggle with the health and economic repercussions of the coronavirus pandemic, Congress must do more to help those who are suffering from unemployment as a result. Alabama’s unemployment rate in May was 9.9 percent and my home state is facing a 70 percent increase in the evictions of renters,” Senator Jones, a member of the Senate Banking Committee, wrote. “This hardship is sadly not unique to Alabama, and Americans across the country are struggling to pay their bills, to keep the lights on, and to put food on their tables.

A recent article in the Montgomery Advertiser detailed a line of unemployed Alabamians that has formed for weeks in a parking lot outside an Alabama Department of Labor (ADOL) claim processing center, with many sleeping outside overnight in the rain or participating in a “black market” system of selling spots in the line.

“While the ADOL has noted that an in-person presence is not required to file or resolve unemployment claims, technical glitches and difficulties reaching ADOL staff have so frustrated claimants that for many, traveling to Montgomery seems to be the only remaining option. These claimants seek such urgent relief that they have been camping out overnight in the hopes that their claims will be resolved.  To make matters worse, Alabama’s unemployment fund is on track to become insolvent within the next month or two,” Senator Jones continued.

“As we continue to observe the grave status of unemployment and its repercussions on our nation, I urge the leadership of the Senate to consider including language that addresses unemployment issues in the next pandemic relief legislation in July. I respectfully urge the inclusion of language providing greater availability of federal funds for state Departments of Labor, to ensure that hardworking Americans can rely on temporary monetary aid to help feed their families and keep a roof over their heads during these trying times,” the letter concluded.

Senator Jones has been a strong advocate for support for working Alabamians throughout the COVID-19 crisis. He has introduced legislation to cover the wages and benthe efits of employees of affected businesses and non-profits until the economic and public health crisis is resolved, and during the negotiations for the CARES Act, he proposed the Small Business Lifeline fund to direct financial assistance to workers through payroll processing companies. Senator Jones has also called for the Treasury Department and the Small Business Administration to allow payroll processing companies to disburse the CARES Act small business loans to reduce complications and expedite salaries to workers who have been impacted by the coronavirus.

Full text of the letter can be found here and below.

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Dear Majority Leader McConnell and Minority Leader Schumer:

As the nation continues to struggle with the health and economic repercussions of the coronavirus pandemic, Congress must do more to help those who are suffering from unemployment as a result. Alabama’s unemployment rate in May was 9.9%, and my home state is facing a 70% increase in the evictions of renters.  This hardship is sadly not unique to Alabama, and Americans across the country are struggling to pay their bills, to keep the lights on, and to put food on their tables.

Millions of Americans have lost their jobs during this pandemic, and have turned to the unemployment benefits provided by programs in the Coronavirus Aid, Relief, and Economic Security (CARES) Act. These newly created programs have created a much-needed lifeline for folks across the country. Most notably, the Pandemic Unemployment Assistance (PUA) program, the Federal Pandemic Unemployment Compensation (FPUC) program, and the Pandemic Emergency Unemployment Compensation (PEUC) program were created to ensure states would be able to expand coverage of unemployment benefits given the outsized nature of the pandemic on employment.

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However, the majority of State Departments of Labor have been experiencing great difficulties in updating their technical systems to withstand the sudden influx of numerous claims, disbursing benefit payments efficiently to claimants, and effectively communicating with claimants who may be frustrated with the speed at which their claims are processed.

The Alabama Department of Labor (ADOL) has disbursed nearly $2 billion in COVID-19 related unemployment compensation benefits under the PUA, FPUC, and PEUC programs. While ADOL has been working incredibly hard for Alabamians, phone call lines remain jammed, and benefits take significant time to process. ADOL has received 576,314 unemployment claims to date, and the Department is staffed enough to field less than 4% of the calls it receives per day. Since the crisis began, ADOL typically receives 210,000 calls per day; yet only 6,000 to 7,000 of those calls can be processed each day.

Put simply, ADOL is overwhelmed by the massive influx of claims. An article in the Montgomery Advertiser, enclosed with this letter, details the difficulties that Alabamians are experiencing.  In an effort to address claims more efficiently, ADOL opened an in-person claims center in Montgomery, Alabama, but it too was inundated by the unmanageable number of claimants.  While the ADOL has noted that an in-person presence is not required to file or resolve unemployment claims, technical glitches and difficulties reaching ADOL staff have so frustrated claimants that for many, traveling to Montgomery seems to be the only remaining option. These claimants seek such urgent relief that they have been camping out overnight in the hopes that their claims will be resolved.  To make matters worse, Alabama’s unemployment fund is on track to become insolvent within the next month or two.

This is not the first time in recent times that state unemployment funds were in need of aid from the federal government. During the Great Recession, states that exhausted unemployment benefit funds were able to borrow from the Treasury Department to strengthen their funds. Given these dire economic times for state and local governments, the ability to access federal funds should be available once again to cover the costs associated with unemployment benefits.

As we continue to observe the grave status of unemployment and its repercussions on our nation, I urge the leadership of the Senate to consider including language that addresses unemployment issues in the next pandemic relief legislation in July. I respectfully urge the inclusion of language providing greater availability of federal funds for state Departments of Labor, to ensure that hardworking Americans can rely on temporary monetary aid to help feed their families and keep a roof over their heads during these trying times.

Sincerely,

Senator Doug Jones

 

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