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Nebraska Senator questions who is being hurt most by rising packer margins

The issue of cattle prices and packer margins came up during a recent Senate Ag Committee hearing.

Nebraska Senator Deb Fischer says widening packer margins are worrisome.  “I’m looking at last week’s close,” she says.  “Fed cattle, down.  Feeder cattle, down.  Wholesale prices, up.  So I just want to be clear on this – who is being hurt right now?”

Tennessee cattle producer Jennifer Houston, president of the National Cattlemen’s Beef Association, says the current situation isn’t great – but it could be worse.  “There was a long time where packers didn’t have a lot of margins and other parts were making a lot more money,” she says.  “We hope things will stabilize pretty soon.  Certainly, the optics to our members are bad.”

Montana cattle producer Shane Eaton, a member of the US Cattlemen’s Association, says his members are concerned this is the new normal.  “The packers created this additional margin,” he says.  “The cutout went up $20 to $22 the first three days after the fire before a fat calf was even purchased.  Then we lowered the fat cattle prices $7 and they maintained that margin going ahead in the weeks ahead.”

The USDA is currently investigating whether packers engaged in price manipulation, collusion, or other unfair practices following the fire. 

AUDIO: Nebraska Senator Deb Fischer, Senate Ag Committee Hearing