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The Midwest Cattleman · October 26, 2023 · P3

                   October 26, 2023   Volume 29   No. 10

         NEW PRICE-FIXING SUIT AIMED AT BIG 4                                     IRS EXTENDS RELIEF TO RANCHERS
                             BEEF PACKERS                                     The IRS recently posted  raised for slaughter or held
                                By Greg Henderson                           Notice 2023-67 reminding  for sporting purposes, are not
         America’s Big 4 packing                                            ranchers who were forced to  eligible.
      companies are the target of                                           sell livestock due to drought        The sales must be solely
      new price-fixing allegations                                          may have an extended peri- due to drought, causing an
      from  a  group  of  small  food                                       od of time in which to replace  area to be designated as el-
      distributors. Those  distrib-                                         the livestock and defer tax  igible for federal assistance.
      utors filed suit Oct. 9 in the                                        on any gains from the forced  Livestock generally must be
      U.S. District Court for the                                           sales.                            replaced within four years
      Northern District of Illinois,                                          The relief generally ap- instead of the usual two-year
      accusing  the  packers  fixed                                         plies to capital gains real- period if the applicable re-
      prices for years.                                                     ized  by eligible  farmers and  gion is listed as suffering ex-
         The plaintiffs allege that  the Big 4 that have led to  ranchers on sales of live- ceptional, extreme, or severe
      beginning at least by Jan- settlements in the tens  of  stock held for draft, dairy, or  drought conditions during
      uary 1, 2015, Cargill, JBS  millions of dollars and led to  breeding purposes. Sales of  any week between Sept. 1,
      USA,  Tyson Foods, and Na- scrutiny by the Department  other livestock, such as those  2022, and Aug. 31, 2023.
      tional Beef Packing Co., “ex- of Justice and Congress.                                                               More      informa-
      ploited their market power            The lawsuit cites beef                                                      tion on reporting
      in  this  highly  concentrated  plant production data and                                                         drought sales and
      market by conspiring to limit  price fluctuations, as well as                                                     other  farm-related
      the supply of beef sold to pur- testimony from two inside                                                         tax  issues  can  be
      chasers in the U.S. wholesale  witnesses with knowledge of                                                        found in Publication
      market, including Plaintiffs,  company agreements to help                                                         225, “Farmer’s Tax
      which resulted in higher  each other manage output.                                                               Guide,” available on
      prices paid by Plaintiffs.”           The distributors are seek-                                        
         The distributors said the  ing a jury trial for unspeci-
      alleged scheme caused finan- fied  damages and  a perma-
      cial harm at least through  nent injunction.
      the end of 2021.                      In August, antitrust claims  OKLAHOMA STATE RESEARCH TO ENHANCE
         “As a result, Plaintiffs paid  against the Big 4 by a group                              VALUE OF BEEF
      higher prices for beef than  of ranchers were dismissed.                         By Paul Beck, Oklahoma State University State Extension
      they otherwise would have  A federal judge in Minneso-                                     Beef Cattle Nutrition Specialist
      paid  in a competitive mar- ta dismissed the claims filed               Consumers relate the color
      ket,” states the lawsuit, seek- by  a putative class of cattle  of meat to freshness and base
      ing relief under the Sherman  ranchers in a long-running  their purchasing decisions on
      Antitrust Act.                     case that alleged an indus- color more frequently than
         Allegations by the four  try-wide scheme to fix prices.  any other quality trait. When
      small distributors are simi-                                          purchasing beef, studies show
      lar to other suits filed against   Drovers                            that consumers want to see a
                                                                            bright cherry red color, deem-
                              LRP TRENDS                                    ing other color deviations as     Photo - Texas Tech University
         By Matthew Diersen, Risk & Business Management Specialist, Ness School of   unacceptable. Off color of
                 Management & Economics, South Dakota State University      beef products is a significant    State University meat sci-
         Livestock Risk Protection                                          economic cost to the beef pro-    ence researchers noted that
      (LRP) has become so popular                                           duction system. A recent pub-     the US beef industry loses
      that people may stop using                                            lished study from Oklahoma                      continued on page 10
      it. LRP has often sparked
      the interest of cow-calf pro-
      ducers and smaller cattle                                                                             Coming Sales-30
      feeders looking for a cost-ef-                                                                        Life is Simple-5
      fective way to transfer down- fewer than 80,000 head were
      side  price  risk  to  others.  A  covered as feeder cattle. In                                       Market Report-8
      few years ago, the premium  fiscal year 2023 almost 4.2                                               Agribusiness
      subsidy on LRP was substan- million head were covered                                                 Directory-28
      tially increased and the im- as feeder cattle.  The feeder
      pact on LRP sales has been  cattle coverage was popular
      dramatic. In fiscal year 2020,                   continued on page 12
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