USDA To Buy Beef,
Look Into Packers

WASHINGTON —(AP)— Depressed cattle prices led Agriculture Secretary Dan Glickman Tuesday to announce the government purchase of $30 million in beef and a renewed investigation into whether four dominant processing companies exert unfair influence on the market.

"You can't let three or four very large packers run roughshod over family farmers," Glickman said Tuesday after a Capitol Hill meeting with Democratic farm-state senators.

Prices paid to cattle producers are in the doldrums because supplies are huge, American consumers are not eating enough beef to keep pace, and exports are down, largely due to the Asian financial crisis.

The beef purchase, while not enough by itself to have a dramatic impact on prices, "will give the domestic cattle market a much-needed boost," said Clark Willingham, president of the National Cattlemen's Beef Association.

Yet many ranchers contend that the commanding position held by four beef packers is also partly to blame for the low prices.

Right now, 82 percent of beef is processed by IBP Inc. of Dakota City, Neb.; Monfort Inc., of Greeley, Colo., owned by ConAgra Inc.; Excel Corp. of Wichita, Kan., owned by Cargill Inc.; and National Beef Packing Co. of Kansas City, Mo., part of Farmland Industries Inc.

Just 18 years ago, those companies controlled only 36 percent of beef packing.

"Something out there is not working," said Sen. Bob Kerrey, D-Neb.

Glickman said the department wants Congress to approve another $3.8 million for its antitrust enforcement investigations into whether the packing industry is unfairly manipulating the market.

Two years ago, an Agriculture Department investigation into allegations of a meat monopoly in Kansas concluded there was no price-fixing among the big four packers or that their actions had depressed prices for farmers. Nevertheless, the allegations keep arising.

"This issue has been looked at time and time again," said Janet Riley, spokeswoman for the American Meat Institute that represents processors. "They haven't found anything wrong."

The department also will propose rules requiring that all cattle prices are publicly disclosed. That is now voluntary. Many producers believe big packers use contracts with farmers to conceal prices and manipulate markets in their favor.

"We want to end the secret deals on livestock sales," said Senate Minority Leader Tom Daschle, D-S.D. "We want to see full disclosure."

Riley said packers oppose any rule requiring them to make public the private contracts with cattle producers: "We think the parties have a right to agree to terms that don't have to be disclosed."

In addition to the $30 million beef purchase, which will go to food banks and other charities, the Agriculture Department will work harder to include meat in any export credit programs.

The agency also proposed a rule that would require details of beef export shipments before they occur, a move Riley said might hurt U.S. processors by making too much information available to competing countries such as Australia.