FORT PIERRE, S.D. (KELO) — U.S. Senator Mike Rounds and the South Dakota Retailers Association blended forces Friday and brought together a panel of cattle ranchers and small-town grocery and restaurant owners to talk about how a handful of packing companies steer U.S. beef prices.
The Republican senator told a small gathering at the Casey Tibbs Rodeo Center that South Dakota could set the example for the nation by informing consumers about what he described as “the choke point” that big processors pose in the beef supply chain.
He suggested that speaking in one voice on the packers issue and engaging consumers nationally is a route to take. He said just nine states have more cattle than people, and those 18 senators were well short of the 60 necessary for the U.S. Senate to debate potential solutions. Consumers need to hear the price message from stores and restaurants, he said.
“Their consumers, folks they do business with, they’re in talking about why they’re paying nineteen dollars for ribeyes, they’re in wanting to know why there’s this huge spread when it comes to hamburger over five bucks a pound,” Rounds said. “And the question on it is, so who’s making all this money? And why is it that the consumer shouldn’t be able to understand why it is the prices on this stuff are going out of sight?”
Others on the panel from the consumer side included retailers executive director Nathan Sanderson; RF Buche whose company owns grocery stores in Gregory, Mission, Oacoma, Pine Ridge, Sisseton and Wagner; Turtle Creek Steakhouse co-owner Kecia Beranek of Miller; and Dan Cahoy who has grocery stores in Bonesteel, Tyndall and Lake Andes.
“I feel our meat department makes our store successful and growing,” Cahoy said.
“Obviously we live with these people every day,” Beranek said. “We know they’re going through the same troubles as us. We want to make sure that they’re paying a fair price for really good product.”
Buche wants to figure out a path forward for some fair competition and to see cattle producers paid fairly for their hard work. “And finally I’d like to make grocery store customers understand high beef prices actually cause the grocers to make less money which has a severe impact in small-town South Dakota.”
From the cattle side were White River rancher Eric Iversen; South Dakota Stockgrowers Association executive director James Halverson of Rapid City; and R-CALF USA regional director Brett Kenzy of Gregory.
“We’ve seen there is profit to be made in this industry, quite a bit of it,” Iversen said. “It’s just not working the way it’s going. I can’t no longer just be the grower of the trees for the cabinetmakers. We need to get aligned with the next step to share our message and get a higher percentage of that consumer dollar.”
The event was moderated by Tri-State Livestock News editor Carrie Stadheim. “Everybody has really said, each of these small businesses whether they’re in cattle or sell meat or sell something else to the public is crucial to the survival of this state,” she said.
All of South Dakota’s top statewide elected officials –U.S. Senator John Thune, Congressman Dusty Johnson and Governor Kristi Noem — are pushing in various ways on the beef issue.
Four companies control more than 80% of the market. They are JBS, Tyson, Cargill, and National Beef.
“In the middle of this whole thing, we’re all pointing at the same location, and that is, we’ve got a choke point in the ability in our country to process the beef and to have open competition,” Rounds said.
The way to get a Senate debate, he said, is to grow the team, “We got a pretty good bench out there called consumers, and our focus has got to be on getting the message to the consumer about what’s going on and why they pay this huge price and who’s actually in the middle of it making the dollars and keeping the dollars.”
He added, “You don’t win this by having fights among yourselves. You do this by sitting down and figuring out what we can agree on, and then you move forward and build that team — and we got a ways to go to build that team.”
Consumers want to know about price as well as quality of food and food safety, according to Rounds. He said the problem won’t be solved with just one piece of federal legislation. “This has got to be a movement that has a whole lot of things that open us up to price transparency, to make sure that the rules that are on the books right now for anti-trust are being followed, and if they’re not, what we got to do to fix them. And then, how do we get more competition for beef and bring the price down in the grocery store.”
Rounds recalled that when he was governor more than a decade ago his administration worked to get a privately owned beef packing plant opened in Aberdeen. He said Hutterite farms in the Huron area banded together to open a turkey processing plant.
“There’s more than one way to skin this thing. I don’t know exactly what it is. But if we get folks talking back and forth to one another, we’re going to be able to come up with multiple ways to open this market up,” he said.