If you’ve read much about the cattle drives of the 1800s, you likely know that once delivered to the railroads, the cattle ended up at one of the few meatpacking houses, most in Chicago. Food safety was, well, not a priority.
Just six companies — Swift, Armour, Morris, Cudahy, Wilson, and Schwerdter — dominated the meatpacking industry and were known collectively as the “Beef Trust.”
Beef packers today are known as the “Big Four” with as much os 85 percent of the market controlled by Tyson Foods, Cargill, National Beef, and JBS USA.
Just as he did during his first term, President Trump has ordered the Department of Justice to investigate whether the “Big Four” are engaged in “illicit collusion, price fixing, and price manipulation.”
President Theodore Roosevelt is credited with destroying the “Beef Trust” in Swift & Co. v. United States, 196 U.S. 375 (1905) — the U.S. Supreme Court case ruling that the beef companies engaged in monopolistic price-fixing. The ruling found Congress could regulate monopolies under the Commerce Clause.
In the 1902 case, it was Roosevelt’s Justice Department that investigated antitrust violations, including price-fixing, market division, and collusive practices to control the livestock and meat markets.
As President from 1901 to 1909, it also fell to Roosevelt to respond to the public outcry over “The Jungle” by Upton Sinclair, which led to his signing the U.S. Pure Food and Drug Act in 1906, bringing some food safety improvements to American slaughterhouses.
If six companies in the “Beef Trust” were guilty of monopolistic practice more than 100 years ago, how hard is it to prove the “Big Four” aren’t doing the same thing now? Well, it’s apparently not as easy as past attempts — like Trump’s first try and others have ended quietly.
R-CALF USA CEO Bill Bullard, head of the nation’s largest cattle association exclusively representing cattle farmers and ranchers, has long sought such intervention. In his most recent weekly commentary, Bullard explains “how we got here.”
“After all, there have been complaints about the monopoly control over the United States’ beef supply chain for decades, with no meaningful government enforcement of our U.S. antitrust laws or the Packers and Stockyards Act (which prohibits explicitly anticompetitive conduct in livestock markets) – but with one significant exception, “ Bullard writes.
“We must go back about 18 years, to early 2008, when we learned that Brazilian-owned JBS wanted to purchase our nation’s fourth-largest beef packer, National Beef Packing Co., along with Smithfield Beef Group and the then-largest U.S. feedlot, Five Rivers Ranch Cattle Feeding,” he continues.
“We immediately requested the U.S. attorney general block the mergers, we asked the U.S. Senate Judiciary committee to launch an investigation, and we filed a private lawsuit to enforce our U.S. antitrust laws.”
“By early 2009, after the U.S. Department of Justice had filed an antitrust enforcement action, JBS withdrew one of its proposed acquisitions – the purchase of National Beef Packing Co.”
“That was our first antitrust victory, albeit a partial one, and it was the first meaningful antitrust enforcement action filed by the Department of Justice in decades on behalf of our industry.
Although the Justice Department’s action slowed the formation of our monopolized beef supply chain, it didn’t stop it, and our industry continued to shrink. In contrast, monopoly-structured cattle and beef markets persisted,” he adds.
Bullard ends saying: “Now we see the aftermath of years of neglect – cattle prices were recently falling while consumer beef prices were reaching new highs. And President Trump is intervening again, calling for an investigation and, this time, alleging unlawful conduct by the monopolistic beef packers.
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