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Kansas AG asks U.S. Justice Dept. to investigate pricing in beef markets

Published: May. 28, 2020 at 2:39 PM CDT
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Kansas Attorney General Derek Schmidt reaches out to the U.S. Justice Department to look into beef prices, specifically "to investigate significant price swings in the cattle and beef markets to determine whether any illegal market manipulation has occurred."

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Schmidt joined the request for an investigation made earlier this month by 11 other state attorneys general.

“Because I am instinctively reluctant to invite federal intervention in state affairs unless absolutely necessary, I wanted to fully explore whether state law enables us to get the answers to legitimate questions many producers and feeders are raising about the cattle and beef markets,” Schmidt says. “But unfortunately, I am not authorized by statute to conduct state-law investigations of most potential antitrust violations in livestock markets, and we have now determined no state-law investigation is in fact authorized in the current situation. Therefore, I am now joining in the request for a federal review.”

The Kansas Restraint of Trade Act is the main state-level statute authorizing the attorney general to investigate potential illegal market manipulation. However, the state statute provides that it does not apply to situations governed by the federal Packers and Stockyard Act, Schmidt's office explains.

"Since the fire at the Tyson plant in Holcomb last summer, the U.S. Department of Agriculture has been conducting an investigation of beef pricing under authority of the Packers and Stockyards Act; that investigation is ongoing and now has been specifically expanded to include price disruptions during the COVID-19 pandemic," Schmidt says.

The Kansas attorney general says he nonetheless has authority to participate in enforcement of federal antitrust laws and joins other states in the effort to persuade the department of justice to undertake an investigation.

“There have been tremendous disruptions in beef and cattle markets related to COVID-19,” Schmidt says. “The legal question is whether any other factors that may not be legally permissible also are at play. The underlying frustration of many cattle producers and feeders boils down to this: Why are they being paid significantly less for live cattle when consumers are paying more for beef on the grocer’s shelf? It is a reasonable question that deserves a review and fully-informed answer.”