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KCA introduces resolution to save cattle marketsKansas Kansas Cattlemen's Association introduced a resolution in the Kansas House of Representatives to address the ever growing power that the packing industry has over U.S. producers. With the recent purchase of Pilgrim's Pride, the second largest poultry producer by JBS, a dominating beef packer, Kansas cattlemen are even more susceptible to the business practices of such packers that not only control one protein but multiple proteins. The demand for beef is influenced by supply and price of the other proteins. The beef checkoff even recognizes this susceptibility. In 1988, the beef checkoff was established to improve the competitiveness of beef, and in 2007 the checkoff recognized that one of its top 20 accomplishments was distinguishing the superiority of beef over poultry and pork to enhance beef purchases. There are a handful of major packers that have control over multiple proteins. This control leads to a protein monopsony. Eighty-eight percent of beef is controlled by four major companies, Tyson Foods, Cargill, JBS, and National Beef Packing Company; 66 percent of pork is controlled by four major packers, Tyson Foods, Cargill, JBS, and Smithfield Foods; 52 percent of poultry broilers are controlled by two companies, Tyson Foods and JBS. Fifty-five percent of the turkey industry is controlled by four companies, Butterball LLC, Hormel Foods, Cargill, and Sara Lee. This concentration of market power defines a "monopsony" in which a few buyers dictate the future of a volume of sellers via their ability to participate in a live market. This type of control directly affects the American consumer. The U.S. has seen retail prices steadily increased, while cattle prices have continually decreased. As fewer packers are controlling more proteins, they are able to influence both the retail and live animal prices of poultry, pork, and beef to their advantage. This is a tremendous concern for livestock producers. Trying to ensure an independent cattle industry, KCA visited with agriculture committee members from both the Kansas Senate, the Kansas House as well as the Kansas Attorney General asking them to encourage the Kansas delegation, the United States Congress, the Department of Justice and the President of the United States of America to review, investigate and enforce the antitrust laws and Packers and Stockyards Act in relation to the inhibited marketing opportunities available to independent livestock producers as it relates to the monopsony of the protein industry.
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