Those who enjoy a breakfast of steak and eggs are feeling better about half of their plate. Egg prices have come down sharply in the past year. But now beef prices are the problem, soaring well beyond the level of other foods.
Most analyses of the situation point to two primary culprits. The first is drought, which parched grazing land and caused hay prices to spike. When these conditions emerged a few years ago, ranchers responded by slaughtering cattle sooner. Initially, this increased supply and pushed prices down. But now the herds are smaller and output is down, putting upward pressure on prices.
The other culprit are tariffs, especially those Trump capriciously imposed on Brazil, a major source of U.S. red meat imports, to punish the country for prosecuting former president Jair Bolsonaro in connection with a January 6-type attempted coup.
A federal court in Minnesota is focusing on another cause: collusion among the major beef producers to keep prop up prices. Starting in 2020, groups of beef buyers filed several lawsuits that came to be consolidated in a multidistrict action against the giants of the industry.
The litigation alleged that from at least 2015 Cargill, JBS, Tyson Foods, and National Beef Packing Company agreed among themselves to reduce live cattle purchasing and slaughter volumes for the purpose and effect of increasing their margins. The plaintiffs alleged that the companies accomplished and perpetuated this agreement through collusion at trade association conferences and industry events between executives and key employees, and through ensuing collusive relationships. This anti-competitive, the plaintiffs argued, caused them to pay artificially and illegally inflated prices for boxed beef, which in turn elevated prices for consumers.
Plaintiffs have achieved a series of substantial settlements. In 2022 JBS agreed to pay $52.5 million to direct purchaser plaintiffs. Earlier this year, JBS said it would pay $83.5 million to settle allegations it had conspired with other processors to suppress the prices paid to ranchers. Earlier this month, Cargill and consumer indirect purchaser plaintiffs announced that they had reached a settlement, but details have not yet been announced.
Along with conspiring to keep prices high, the big beef producers have been accused of colluding to depress wages of their employees. A 2022 lawsuit filed in Colorado has resulted in another series of multi-million-dollar settlements, including a $72 million payout by Tyson Foods and $55 million by JBS. Cargill and National Beef Packing coughed up another $43 million.
JBS, Tyson Foods, and Cargill have also been connected to illegal child labor via the hiring of underaged workers by Packers Sanitation Services to do dangerous cleaning work at their plants.
Despite their lawsuit payouts, it is likely that the beef giants have not completely mended their ways and are still finding ways to push up prices and push down wages. Drought and Trump’s tariffs are not the whole story behind rising beef prices. Plain-old corporate greed is also playing a role.