Agricultural News
USDA Undersecretary Greg Ibach Briefs Beef Industry on USDA Investigation into Possible Price Manipulation in Conjunction with Tyson Packing Plant Fire
Thu, 12 Sep 2019 13:21:34 CDT
USDA Under Secretary for Marketing and Regulatory Programs Greg Ibach joined Superior Livestock Auction's Danny Jones and Beth Brian on Superior Sunrise this morning to offer beef producers insight into the investigation USDA has initiated to examine possible price manipulation in the marketplace since the recent fire at the Tyson packing plant in Holcombe, Kansas. Ibach explained USDA's role in providing market oversight to ensure all parties are treated fairly.
"We have the responsibility of making sure the market reacts appropriately and that producers are treated fairly. That's done through our Fair Trade Practices Division. We have a lot of experience in this area, analyzing markets and looking for signals that might says things are out of balance," he explained. "One of our other major responsibilities that helps us with this is mandatory market news reporting."
The collection of this data not only provides the USDA with daily updates of market action but also provides a historic perspective so that in the event of suspected price fixing, USDA can investigate the past performance of the market to pinpoint when that activity might have occurred.
The beef industry is particularly vulnerable to rumors, and especially when there is significant uncertainty and lacking information to fuel the fire. During these instances, producers are often times exposed to the risk of being taken advantage of. There is evidence that this potentially occurred since the incident in Kansas, which caused decreased harvesting capacity within the beef industry. Ibach says that is what has prompted the Department's investigation. According to him, the USDA noticed a spread starting to develop within packer margins in relationship to payouts to producers and consumer segments in the industry. Ibach notes that this spread is the largest recorded since data collection began.
"That's what told us it would be appropriate for USDA to begin the next phase of our investigation which gave us the ability to share prices between market news and mandatory price reporting with the Packers and Stockyards Division to be able to look further at the market," Ibach said.
Early analysis suggests that the reaction was heavily influenced by the timeframe of the situation that at the time was leading up to the Labor Day weekend, a common landmark for the seasonal shift in beef demand that generally heralds a depression in the fall market. This, Ibach says, most likely accentuated the market's reaction to the fire. Moving forward, though, the investigation will continue to look at the timeline of the events that occurred leading up to and after the fire incident and at all the factors that played into the current market situation to determine whether or not there is any substantial evidence that price manipulation did in fact occur.
WebReadyTM Powered by WireReady® NSI
Top Agricultural News
More Headlines...
