Page 3 - MWC 10-26-2023s

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- IRS.gov.
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