May 6, 2020 / 9:19 PM / a month ago

UPDATE 2-Trump asks Justice Department to look into meat price disparities

(Adds quotes from Trump, background on issue, comments from cattleman, Cargill)

WASHINGTON, May 6 (Reuters) - President Donald Trump said on Wednesday he had urged the Justice Department to look into allegations that the meatpacking industry broke antitrust law because the price that slaughterhouses pay farmers for animals had dropped even as meat prices rose.

“I’ve asked the Justice Department to look into it. ... I’ve asked them to take a very serious look into it, because it shouldn’t be happening that way and we want to protect our farmers,” the president told reporters at a White House event attended by Agriculture Secretary Sonny Perdue and Iowa Governor Kim Reynolds.

“Are they dealing with each other? What’s going on?” the president asked.

With the spread of the novel coronavirus, which has killed more than 70,000 Americans, a number of large meat-processing plants have shut down because of infected workers. The result has been fewer markets to which to sell livestock and higher prices for meat.

Trump issued an executive order last week labeling meatpacking plants “critical infrastructure” that must stay open.

Still, the supply shortage has led retailers Costco Wholesale Corp and Kroger Co to limit meat purchases and Wendy’s Co to announce on Wednesday it would focus on marketing chicken, having taken its signature hamburgers off the menu at some restaurants.

Perdue told reporters that U.S. meatpacking plants shut down because of coronavirus outbreaks would be fully back in production in a week to 10 days.

The agriculture secretary said in April the agency would investigate diverging prices for cattle and beef during the outbreak. He expanded a probe into the market that USDA began last year after beef prices paid by wholesalers soared and cattle prices paid to farmers tanked when a fire shut a Tyson Foods Inc slaughterhouse.

Unions have been calling for companies to provide more protective gear for slaughterhouse workers and ensure daily coronavirus testing.

Cattle producers complained that profits for meat processors like Tyson, Cargill Inc, JBS USA and National Beef Packing Co climbed during the pandemic as cattle prices have dropped due to closures of slaughterhouses.

“I’m glad outsiders are finally seeing the issues that the cattle industry has been dealing with for a long time,” said Lee Reichmuth, a Nebraska cattle producer and board member for the United States Cattlemen’s Association.

Asked about price-fixing allegations, Cargill spokesman Daniel Sullivan said that “the assertions lack merit, and we are confident in our efforts to maintain market integrity and conduct ethical business.”

Tyson had no immediate comment, while JBS USA and National Beef Packing did not immediately reply to a request for comment. (Reporting by Jeff Mason; Additional reporting by Sarah N. Lynch and Tom Polansek; Writing by Mohammad Zargham and Diane Bartz; Editing by Peter Cooney)

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