Utah State Professor Presents to U.S. Senate Committee

Utah State Professor Presents to U.S. Senate Committee

Utah State economics professor DeeVon Bailey recently presented testimony to the U.S. Senate Committee on the Judiciary about the buying power of meat processors in the nation’s agricultural markets. The hearing, where Bailey reported on research he conducted with Lynn Hunnicutt, addressed the potential that large meat processors have for exercising power over prices in the marketplace.

Beef prices increased 18 percent in October and are still rising. There has been speculation that prices have been driven up by higher demands for beef among dieters adhering to high-protein, low-carbohydrate diets. But Bailey said the driving force behind the price increase is the closure of the U.S. border to Canadian beef imports due to mad cow disease diagnosed there earlier this year.

The hole in the market was being filled by bringing cattle out of feedlots earlier than usual to get meat to market, Bailey said. Taking cattle off feedlots early has also resulted in a lack of beef that qualifies to be graded choice. As a result, restaurants that serve finer cuts of meat are finding it difficult to get theproducts they are used to and are paying premium prices for what is available.

"We haven’t just broken price records, we've shattered them," Bailey said.