Last week, several Midwestern feedlot owners along with the Ranchers-Cattlemen Action Legal Fund (R-CALF) filed a class-action lawsuit alleging that dominant meatpackers conspired to depress cattle prices starting in 2015. The case argues that JBS, Tyson, Cargill, and National Beef strategically cut back on open market cattle bids, closed plants, and imported costly foreign cattle in order to force farmers to accept lower prices and manipulate spot market cattle values.(No paywall)
Cattle prices are stronger than expected this year but they they are likely to run below 2017 levels, with the result that retail beef prices rise modestly, at most, said the monthly Food Price Outlook. The United States is headed for the third year in a row of lower than average food inflation - 0.5 percent compared to the 20-year average of 2.1 percent annually.
Big Ag is back on the offensive in Oklahoma, less than a year after voters defeated a bill that would have stripped the state’s residents of their ability to regulate corporate farming. The Oklahoma Cattlemen’s Association wants ranchers to pay an additional $1 tax per head of cattle sold in the state, and will hold a Nov. 1 vote on the tax for Oklahoma cattle producers. Family farm advocates say that much of the money collected under such checkoff taxes is funneled to private industry groups that use it to promote the interests of corporate agriculture over independent farmers.
Two-thirds of the way through 2017, the government says grocery prices are headed for a barely perceptible increase of 0.25 percent this year, thanks to lower red meat, egg and fresh produce prices. This year's marginal increase follows the first instance of retail food price deflation in half a century, the 1.3-percent year-on-year decline in grocery prices in 2016.
Texas is easily the largest cattle state in the country, with 12.3 million head, or nearly one of every seven head in the U.S. inventory of 93.6 million cattle. The 54 Texas counties declared a disaster area due to damage by Hurricane Harvey hold 1.2 million beef cows, the animals that are the foundation of the cattle industry, says livestock economist David Anderson of Texas A&M.
The mid-summer count of the U.S. cattle inventory was the largest in nine years, which means more beef production and lower beef prices in the supermarket for the second year in a row. "Lower beef prices are most likely adding pressure to lower pork prices," say USDA economists in the monthly Food Price Outlook.
Overall U.S. grocery prices will not rise at all this year — the first time in four decades of records that the inflation rate would hit zero, says the Agriculture Department, pointing to the effects of low petroleum prices, the strong dollar and falling prices for beef, pork and poultry. Retail food prices were flat or fell during six of the first eight months of 2016, assuring "a rate of inflation (or possibly deflation) that would again fall below the 20-year historical average of 2.5 percent," says the Food Price Outlook.
The strong dollar and low oil prices are slowing food price inflation to its lowest rate in six years, a barely noticeable 1.5 percent this year, says the Agriculture Department. And, looking ahead, USDA economists say 2017 will be the third year in a row that food inflation is far below normal.
Americans faced relentlessly higher beef prices at the grocery store in 2014 and 2015 due to drought, tight supplies and high demand. Shoppers will get a break this year, with retail prices forecast to dip 1 percent, says the monthly Food Price Outlook.