South Dakota Stockgrowers Pleased With USDA Inquiry Into Market Volatility Following Processing Plant Fire

(WNAX) — USDA Undersecretary Greg Ibach says he expects their investigation into the market volatility that happened following the Tyson Kansas Processing Plant fire will get done by the end of the year or in early 2020. South Dakota Stockgrowers Association President Gary Deering wants to see a thorough review completed…

“It shows the Administration is taking this seriously and that’s something that we’re very encouraged by. Whether they find something or not, I guess, that’s going to be up to the investigation obviously, but they’re gonna take their time; we know that; and…and try to look at everything. Biggest thing from the Holcomb fire that bothers me and bothers other producers is the fact that one fire at one plant can cause that much volatility and to me that’s scary within our marketplace.”
He says the volatility is another indication that the market concentration problem needs to be addressed…

“That’s been bothering us for quite some time; you know we wanted some things in the Farmers Fair Practice rules in the Packers and Stockyards Act and that was thrown out some…a few years ago as well, but yeah that’s just the concentration is something that needs to be looked at and…and we’ll see what comes out of this investigation.”
Deering says there does need to be some improvements made to the Packers and Stockyards Act in order to protect cattle producers…

“Whether there is a monopoly or not; whether their created; they’re treating it like a monopoly. Obviously it does have the potential to be that way, so that’s something that needs to be looked at. If…let’s…let’s hope the market can go on and the markets have corrected themselves some. It was, you know, the fire at the Holcomb plant was basically; I heard it coined the straw that broke the camel’s back and that’s pretty accurate. Kinda let us see how vulnerable we are.”
Following the Tyson Kansas plant fire, cattle prices dropped dramatically while retail beef prices rose. All of that prompted the USDA to begin the investigation.