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USDA: No Price Fixing In Kansas

June 18, 1996

WASHINGTON (AP) _ An intensive government investigation into cattle purchases by the nation’s top four meatpacking companies last year found no evidence that major slaughterhouses fixed prices, the Agriculture Department reported today.

The Kansas ’95 investigation, as it was known, is significant in that cattle ranchers and some feedlot operators complain that a handful of meatpackers have so much clout they can control prices. The investigation looked at four months’ worth of purchases in Kansas. During the period, Kansas slaughterhouses accounted for almost a fourth of meat produced in the United States.

The report by the department’s Grain Inspection, Packers and Stockyards Administration concluded that supply and demand were the primary causes of price declines for cattle in late spring 1995. Prices fell at the time as much as $10 per hundred pounds of cattle.

Agriculture Secretary Dan Glickman, a Kansan, has complained about concentration in meatpacking and other agricultural industries and has said he wants to step up enforcement of laws that assure fair pricing. The department said it is conducting similar investigations of cattle pricing in Texas and hog pricing in Iowa and Minnesota.

The investigation examined procurement data covering February through May 1995 and included a look at more than 10,000 cellular telephone calls made by 40 cattle buyers for the firms in question. ``No evidence suggested that the buyers were using their cellular phones to collude while purchasing livestock,″ the investigative summary said.

The investigators looked at purchases by IBP Inc. in Holcomb and Emporia, Kan.; National Beef Packing Co. in Dodge City and Liberal; Montfort Inc. in Garden City; and Excel Corp. in Dodge City. The companies account for practically all the beef slaughtered in Kansas.

Investigators looked at 15,000 transactions covering more than 2 million head of cattle.

The results were released as the Senate Agriculture subcommittee on research, nutrition and general legislation opened a hearing on concentration in the livestock industry.

Just as last spring, many cattle suppliers believe that concentration among meatpackers has contributed to a decline in cattle prices, which fell to a 10-year low this spring. Others argue that the slump is due to an oversupply, aggravated by drought and high feed prices.

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