The United States Justice Department has announced an investigation into potential antitrust violations within the beef and cattle markets, as beef prices soar to unprecedented levels. According to the Federal Reserve Bank of St. Louis, the average cost of a pound of ground beef reached $6.86 in March, just three cents below February's record. This marks a surge of nearly 48% over the last five years.
Justice Department Launches Probe
Acting Attorney General Todd Blanche confirmed during a press conference that President Trump ordered the investigation into the beef industry last November, and it is now actively underway. Blanche stated that more than 3 million documents are being reviewed as part of the probe. He also encouraged whistleblowers to report potential price-fixing, bid-rigging, market allocation, or procurement fraud, with the promise of financial rewards. "If the information you provide helps us secure a criminal penalty in excess of $1 million, you can be entitled to recover and receive 15-30% of the money that we recover," he said.
Focus on Major Processors
Blanche targeted the "big four processors," which he claims control 85% of the beef processing market. Agriculture Secretary Brooke Rollins specifically called out JBS and National Beef. JBS is headquartered in São Paulo, while National Beef is owned by Brazilian multinational Marfrig. "Half of these meatpacking giants, including the largest meat packer in the world, are either foreign-owned or have significant foreign ownership and control," Rollins said.
Peter Navarro, senior counselor for trade and manufacturing to President Trump, criticized both U.S.-based firms Tyson Foods and Cargill, as well as the Brazilian companies. "I hasten to add here that the Brazilians are far more of the problem, and it's complicated by the fact that the Brazilians, particularly JBS, hands out millions of dollars to our American political system like it's candy," Navarro said.
Decline in Cattle Numbers
Rollins noted that the United States has lost 17% of its cattle ranchers over the past decade, and U.S. cattle numbers have plummeted to 86.2 million head of cattle and calves—the lowest since the 1950s. She attributed the decline to multiple factors, including what she described as the "radical left's ongoing assault against ranching as a way of life" and "climate alarmism." Rollins added that "growing the herd size is an immediate problem in need of solutions."
Drought and Other Challenges
The beef industry has faced a series of challenges in recent years, including drought and dry spells. As of April 28, approximately 61% of cattle inventory is affected by drought, according to the National Drought Mitigation Center. Additionally, 46% of alfalfa hay acreage and 57% of hay inventory—both used for cattle feed—are impacted by drought.
Ariel Ortiz-Bobea, an economist at Cornell University, told The Washington Post that drought-affected areas give ranchers no incentive to grow their herds and may even cause them to sell off more animals, which can increase grocery store prices. The U.S. sometimes supplements its herds with cattle from Mexico, but those shipments have largely been paused to prevent the New World screwworm from entering the country, according to Bloomberg. The insect, eradicated from the U.S. decades ago, can devastate herds and has been detected just 90 miles from the U.S. border in the Mexican state of Nuevo León.
Amid drought challenges, efforts by cow-calf producers to remain profitable, and reduced imports from Mexico, beef processors are forced to compete for scarce cattle, Bloomberg reported. The Independent has contacted JBS, National Beef, Tyson Foods, and Cargill for comment.
