USDA To Investigate Tyson Foods And Beef Competitors On Pricing Practices

Tyson Foods and its beef processing competitors are at the center of a federal probe headed up by the U.S. Department of Agriculture to examine the reasons behind price gaps between live cattle and finished beef.

U.S. Secretary of Agriculture Sonny Perdue ordered the investigation this week as cattle prices have continued to fall in the wake of less slaughter capacity. That comes after a devastating fire Aug. 9 that shuttered Tyson Foods’ large processing facility in Holcomb, Kan.

Cattle ranchers fear packers are paying less for their live cattle because there is one less buyer in the market. Meanwhile, packer processing margins are fat. Stephens Inc. estimated beef packer margins averaged $526 per head last week, up from $309 per head a year ago. Beef cutout values rose 12.5%, while live cattle prices were up just 1.2%. Live cattle prices have been slow to rebound despite the industry’s attempt to stabilize the market.       MORE

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