This is the next in the series explaining the accusations against the beef packers.

Opening Statements

Charge (Media/Prosecution): The Big 4 suppress cattle bids in a thin cash market, underpay farmers and ranchers, and control what consumers pay for beef.

Defense (Packers): Cash trade shows breathing competition, not lockstep pricing. The beef dollar split does not evidence packer capture, and retail prices are formed largely downstream while wholesale formulas reference negotiated trade.

Ground Rules

Relevant market.

• Media: Fed-cattle cash trade is thin; formulas magnify any move.
• Packers: Price discovery occurs in regional draw areas; wholesale formulas are anchored to negotiated prices, not unilateral lists.

Burden of proof. Durable market power must appear in outcomes - persistently tight bid ranges, a rising packer take of the beef dollar, and wholesale/retail pricing detached from negotiated bases.

Facts Not in Dispute

• Fed-cattle concentration is high.
• Wholesale formulas have grown as a share of boxed beef sales.
• Negotiated trade (both cattle and wholesale) still exists and is the pricing reference for formulas.

The Media's Case (Defendant)

Count 1 - Thin cash lets packers control cattle prices

• Negotiated cattle sales only account for 12% of all trade in 2025.
• Fed-cattle marketing also relies heavily on arrangements; thin cash means a small nudge can move the base.
• Packers collude to control prices through different regions at different times.

Count 2 - Farmers and ranchers aren't paid fairly

• Packer fabrication is the chokepoint; if they control bids, the farm share should be squeezed.
• Beef packers get rich, while farmers and ranchers struggle.

Count 3 - Packers control consumer beef prices

• Because formula sales dominate, packers can push through higher wholesale prices that retailers must accept, ultimately raising the shelf price.

Media's ask: Find that packers control cattle bids, short the farm gate and dictate consumer prices.

The Packers' Case (Plaintiff)

Count 1 - Cash is thin, but it's not collusive; formulas still point to cash

• Bid dispersion shows time of major spikes during shock periods. We don't see continue periods of near zero bid dispersion by region.

• Cash cattle sales are at 12.1%, but that is up 202.4% from 2014.

• What is the right amount of negotiated trade? 20%, 30%, 50%?

• Retailer dollar increased from $1.24 (2000) to $3.70 (2025), an increase of 198%.
• Farm dollar increased from $1.49 (2000) to $4.90 (2025), an increase of 229%.
• Packer dollar increased from $0.33 (2000) to $0.44 (2025), an increase of only 34%.
• Despite the rhetoric, the packer share of total beef dollars has decreased from 10.9% (2000) to 4.9% (2025).

Count 3 - Packers control wholesale prices

• Negotiated sales have decreased in recent years, but are still above the 20% mark.
• Internal goals for retail, foodservice, and distributors incentivize buyers to buy as close to the USDA negotiated price as possible. Formula sales are a result of such incentives.

Cross-Examination

For the Media

1. Identify multi-month stretches in Exhibit A where dispersion is near zero through stress periods.
2. Reconcile a "packer squeeze" with packer at 4.9% and farm at 54.2% of the beef dollar in 2025 (Exhibit C).
3. Explain how packers "dictate" prices when Exhibit D states formulas typically reference a robust negotiated market.

Jury Instructions (Deciding tests from the exhibits)

• Dispersion: Exhibit A must show persistent compression to prove control.
• Beef dollar: Exhibit C must show a large, rising packer share to prove capture.
• Pricing mechanism: Exhibit D must show formulas detached from negotiated to prove unilateral control.
• Spot trend: Exhibit B shows whether negotiated liquidity is eroding or improving.

Verdict (Reasoned)

• Bid behavior: Variable and shock-responsive with reversion (Exhibit A).
• Economics: Packer value is small and falling in share; farm value is largest and rising (Exhibit C).
• Mechanics: Formulas reference negotiated; negotiated participation in fed cattle is up since 2015 (Exhibit B).

Finding: The claims that packers control cattle bids, short producers and set consumer beef prices are not proven on the economic record.