Cattle Prices Crash While Consumers Continue Paying Record Beef Prices $180 All Fresh Beef Prices — $ Per Pound (Consumers’ Costs) Note: Consumer beef prices go off Consumers’ All Fresh Beef Prices 1 the top of historic chart in 2020. $170 1100-1300 Ib. Steer Price $5.75 $160 Source: USDA Economic Research Services Graph produced by: R-CALF USA $150 Numbered paragraphs produced by The Milkweed $5.25 $140 2 $130 4 5 6 $120 $4.75 $110 7 $100 3 $4.25 8 $90 9 10 Dollars Per Hundredweight (Livestock Producers’ Prices Received) $80 $3.75 Jan-11 Jan-12 Jan-13 Jan-14 Jan-15 Jan-16 Jan-17 Jan-18 Jan-19 Jan-20 Jan-12 Sep-11 Sep-12 Sep-13 Sep-14 Sep-15 Sep-16 Sep-17 Sep-19 Sep-20 Sep-12 May-11 May 12 May 13 May 14 May 15 May 16 May 17 May 18 May 19 May 20 May 12 Sep-18I This graph was created by the staff at R-CALF USA, the progressive prices received by producers’ slaughter cattle, as well as costs paid by con- U.S. cattle producers’ group. R-CALF USA combats the political agenda of sumers at retail for all cuts of fresh beef. The (numbered) points were created “Big Beef.” The graph above depicts the past eight years of data for both by The Milkweed. The spread between the data lines is criminal. 1) Late summer 2014:. Precisely at the time when cattle producers’ prices to some shut-downs and slow-downs. Supermarkets’ supplies of fresh meat (beef, were at their peak, USDA Secretary Tom Vilsack announces that the U.S. may pork and poultry) are seriously depleted amid fears of meat shortages. But bot- import beef from Brazil and Argentina. tlenecks at meat processing plants mean that market-weight livestock are backing 2) Early July 2015: Tom Vilsack announces U.S. has agreed to import beef up at the farm. Prices for beef and pork producers fall, compounding losses in- from Brazilian regions deemed “free” of dreaded Foot-and-Mouth Disease. Prices curred by producers having to maintain market-weight critters. across the entire cattle complex – from calves to animals ready for slaughter, start 7) May 2020: First shipments of fresh, chilled beef from Brazil start arriving sharply collapsing. in the U.S. Slaughter prices for beef and dairy livestock continue nose-diving, 3) September 2016: First shipments of beef from Brazil start arriving in despite high retail prices paid by consumers. U.S. ports. Prices for slaughter cattle further collapse – both beef animals and 8) July-August 2020: Massive quantities of fresh, chilled beef from Brazil dairy steers and culls. are imported into the U.S. Slaughter cattle prices continue to decline. From their 4) January 31, 2020: Sonny Perdue blows off letter from Connecticut Con- early summer peak, prices for top-end dairy cull cows drop by 12-15 cents per gresswoman Rose DeLauro, asking for more oversight of JBS, in light of federal pound, according to The Milkweed’s coverage of dairy auction markets. investigations into JBS and other beef processors operating in the U.S. Perdue 9) September 2020: Slaughter prices paid to U.S. producers for their beef labels Delauro’s references to federal investigations of JBS as “alleged.” and dairy animals continue collapsing. 5) February 20, 2020: USDA Secretary Sonny Perdue announces that the 10) October 14, 2020: Two JBS subsidiaries operating in the U.S. agree to U.S. will start importing fresh, chilled beef from Brazil. pay millions of dollars in fines, to settle federal investigations involving bribery 6) March-April 2020: Covid-19 pandemic shocks the United States, leading of foreign officials and price-setting in poultry in the U.S. In poultry, the settlement to many businesses, educational institutions, and government agencies constrict- blocks any more federal investigations into JBS’ Pilgrim’s Pride possible misdeeds ing operations. Covid-19 also starting to appear in meat-packing plants, leading to date. Following those settlements, JBS’ stock goes up 16%. Crime pays! 2020: U.S. Resumes Imports of Fresh & Frozen Beef from Brazil by Peter Kane Brazil had resolved food safety concerns, and the From Brazil, with blood USDA would again allow fresh beef from certain re- In May 2020, the United States began import- Brazil is the world’s largest beef exporting na- gions of Brazil that were deemed “free” of the ing fresh, chilled beef from Brazil for the first time tion. In 2018, that South American nation accounted dreaded Foot and Mouth Disease (FMD). since 2017. for more than 20 percent of global beef exports, and Roughly two months after Perdue’s declara- continues to expand rapidly into new markets around Three years prior, scandals involving Brazilian tion, the first imports of uncooked Brazilian beef the world. Through summer 2020 — aided by an in- food inspection officials compelled the United States reached ports in the United States. During May-Sep- creased demand for affordable meat during the Department of Agriculture to ban imports of un- tember, this country imported 11,207.2 metric tons Covid-19 pandemic — Brazil enjoyed record-break- cooked Brazilian beef. of frozen beef and 227.5 metric tons of fresh, chilled ing beef exports to China, Egypt, and other nations Remember last spring? By May, the Covid-19 beef from Brazil — the highest numbers in years. concerned about limited domestic beef production. virus had already reached many meat processing Compared to the amount of beef this nation imports But uncooked Brazilian beef is a relatively new plants’ workforces, temporarily closing some plants from Canada, Mexico, New Zealand and Australia, competitor in the United States. And the late-summer and slowing the butchering capacity of many other fa- that’s not a lot of beef. But the reappearance of fresh 2020 imports marked the beginning of a new chapter cilities. Meanwhile, consumers were emptying super- Brazilian beef in United States markets threatens to in the history of United States/Brazilian beef trade: market supplies of beef, pork, and chicken – panicked be detrimental to domestic beef and dairy producers, a tumultuous tale marked by years of international stockpiling spurred by fear of pending meat shortages. whose products must now compete with lower-cost corruption, tainted meats and import bans, corporate The policy change to resume importing frozen Brazilian beef imports, an unscrupulous major beef chicanery and court-ordered settlements. At the cen- and fresh beef from Brazil was announced February processor owned by Brazilians, and millions of cattle ter of this complex plot, one company survives, 20th, 2020. At that time, high-level government of- in beef feedlots in the United States owned by those scandal after scandal, largely unscathed and still ficials knew of the po tential devastation that might same Brazilian interests. This nation’s cattle produc- churning out massive profits: the Brazilian-owned result from Covid-19 infections. Perhaps with the ers face vertically-integrated competition, both for- JBS, SA (JBS). goal of maintaining national food supplies, U.S. Sec- eign and domestic – largely owned by one decidedly Now the world’s largest meat processor, JBS has retary of Agriculture Sonny Perdue proclaimed that corrupt Brazilian firm. spent the better part of two decades consolidating the 8 — The Milkweed • November 2020 Continued on page 9 The Rise of JBS: A Brief History of Corruption and Scandal by Peter Kane company acquires Swift & Co in 2007 for $225 mil- Batista Sobrinho (the company’s namesake), suc- lion, Smithfield Beef Group in 2008 for $565 mil- ceeds Wesley as CEO of JBS. JBS’ ascent to the top of the protein-processing lion, and the majority shares of Pilgrim’s Pride world is heavily laden with scandal. Below, a brief 2018- (February/March): Wesley and Joesley Corporation in 2009 for $800 million. The Batistas timeline highlights many of the known, nefarious ac- Batista are released from prison after serving six will later admit (in 2017) the company receiving tions of JBS’ owners, Joesley and Wesley Batista. In months for insider trading. Separate rulings by the $3.2 billion from the Brazilian national investment the past 15 years the Batistas have busily expanded Superior Justice Court gave them their freedom. bank (BNDES) to finance their takeover of the their company from humble origins – founded by (November 9): Joesley Batista is again ar- global food network. “It wouldn’t have worked,” their father as a one-man slaughterhouse — into a rested along with the former Brazilian ag minister Joesley later said, “if it hadn’t been so fast.” multinational corporation. Testimonies from execu- and other lawmakers for a 2014-2015 bribery tives caught red-handed reveal the company’s growth 2014- (October): JBS and its parent company, scheme that yielded benefits to JBS. Batista is re- was largely bankrolled by investments from Banco J+F Investimentos, are among the largest ndonors i leased after less than a week. the 2014 elections resulting in the re-election of Nacional de Desenvolvimento Econômico e Social (December 14): An investigation by the President Dilma Rousseff. The Batistas spent over (BNDES) the Brazilian national investment bank. USDA Agricultural Marketing Service finds that $100 million on candidates like Osmar Serraglio, 2005- (September): JBS begins a spree of for- JBS USA violated the Packer’s and Stockyards Act who in 2014 received $59,000 from JBS, the single- eign acquisitions by purchasing Swift Armour SA, a by fudging the weights of cattle sold to a plant in largest donation to his campaign. When Serraglio leading Argentinian beef firm, for $200 million. Grand Island, Nebraska. The company agrees to pay was named Minister of Justice by President Michel BNDES loans JBS $80 million for that purchase.