Livestock prices fluctuate daily.
Viewed over time and corrected for
inflation, the longrun trend in live-
stock prices, like prices in the rest of the
sector, is downward. Growth in productiv-
ity and economic competition have driven
the longrun decline in the number of U.S.
producers of most agricultural commodi-
ties. Declining real prices cause serious
financial problems, leading to a decline in
the number of producers.
Some producers allege that the livestock
pricing system is one of the causes of
declining prices. Many of the producers
who are concerned about price discrimi-
nation or corporate farming have com-
plained about concentration and captive
supplies, and have called for Government
action. This pressure has produced results,
with several state legislatures enacting
anti-price-discrimination and anti-corpo-
rate-farming laws. And the U.S. Congress
enacted new mandatory livestock price
reporting legislation in 1999.
Can declining livestock prices be attrib-
uted to structural changes in the industry?
The U.S. livestock pricing and coordina-
tion system has been a topic of debate and
a focus of public policy for well over a
century. An excerpt from an 1890 report
of the Senate Select Committee on the
Transportation and Sale of Meat Products
In place of the old system when
shippers and butchers went from
one cattle raiser to another, com-
peting in the purchase of cattle,
there is now a concentration of the
market at a few points… So far has
this centralizing process continued
that for all practical purposes the
[Chicago] market… dominates
absolutely the price of beef cattle
in the whole country.
Concerns about industry practices contin-
ued into the 1900s. President Theodore
Roosevelt ordered an investigation of the
meatpacking industry after reading Upton
Sinclair’s novel The Jungle, which drama-
tized unsanitary processing plant condi-
tions and manipulative business practices.
When Roosevelt met Sinclair, he indicat-
ed that while he disapproved of the book’s
socialist leanings, he