WASHINGTON (FNS) -- A second review has been ordered on the heels of a $500,000 study in which a U.S. Department of Agriculture consultant was unable to conclude whether concentration of ownership in the meat packing industry is keeping meat prices artificially low.
The study, mandated by Congress, examined one year of business within the meat packing industry, which continues to show market share growth among a small number of packers.
The four largest packers accounted for 82% of steer and heifer slaughter in 1994, compared with 36% in 1980. "The study does not definitively answer the questions and concerns of producers and others about the potential effect of concentration in agriculture," said Secretary of Agriculture Dan Glickman.
Glickman has appointed a 21-member advisory committee to continue looking at the issue, and has asked for a report by June of this year. Scheduled to have its first meeting Feb. 27, the committee is comprised of various officials whose interests are touched by livestock prices, including Tim Hammonds, president and chief operating officer of the Food Marketing Institute, Washington.
Among the critics of the meat packing industry concentration are ranchers, farmers and small feedlot operators, who complain that having fewer slaughterhouses to buy their cattle keeps prices low. Another take on the price issue is that the oversupply of cattle is hurting prices, which in the past year have reached new lows at the retail level.
J. Patrick Boyle, president of the Arlington, Va.-based American Meat Institute, said it was significant that the study found no incidence of wrongdoing among meat packers. He also criticized Glickman's call for further examination of the issue.
"Given the overwhelming evidence that industry structure is not to blame for low livestock prices, AMI questions the need for yet another review of the production and packing industries' structure," he said in a statement.
