This case study is motivated by recent developments in the U.S. beef packing industry involving allegations of an illegal exercise of buyer and seller market power by the four largest beef packers in the markets for fed cattle and beef products, respectively. In 2019, fed cattle producers and beef buyers filed class action antitrust lawsuits against these companies alleging that they engaged in an unlawful conspiracy with the purpose of decreasing fed cattle prices and increasing wholesale and retail prices of beef as early as January 2015 and violated Section 1 of the Sherman Act. The case study focuses on applications of economic models that may explain conduct and performance of the beef packing industry using the perspectives of plaintiffs and defendants in the ongoing cattle and beef antitrust litigation. The case study also introduces a basic empirical analysis of beef production, beef values, and marketing margins in the beef supply chain based on publicly available data reported by the U.S. Department of Agriculture. The intended audiences are undergraduate and graduate students. The teaching note summarizes student learning objectives and teaching strategies. It also includes multiple-choice questions, as well as suggested answers and guidance to analytical, discussion, and multiple-choice questions.

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Tovar, K. 2020. “Antitrust and the Meatpacking Industry.” Ames: Iowa State University, Center for Agricultural Law and Taxation. https://www.calt.iastate.edu/article/antitrust-and-meatpacking-industry

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U.S. Department of Agriculture, Economic Research Service. 2022b. Meat Price Spreads: Historical Monthly Price Spread Data for Beef, Pork, Broilers. https://www.ers.usda.gov/data-products/meat-price-spreads/

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Ward, C.E., T.C. Schroeder, and D.M. Feuz. 2017. “Grid Pricing of Fed Cattle: Base Prices and Premiums-Discounts.” Stillwater:  Oklahoma State University Extension, Division of Agricultural Sciences and Natural Resources, Id: AGEC-560. https://extension.okstate.edu/fact-sheets/print-publications/agec/grid-pricing-of-fed-cattle-base-prices-and-premiums-discounts-agec-560.pdf

Court Documents

Beef Antitrust Litigation Settlement. 2023. https://www.beefcommercialcase.com/

Beef Direct Purchaser Class Action. 2023. https://beefdirectpurchasersettlement.com/

In Re Cattle and Beef Antitrust Litigation. Case No. 20-cv-01319 JRT-HB. Direct Purchaser Plaintiffs’ Third Consolidated Amended Class Action Complaint (Redacted Public Version) filed on January 18, 2022. https://beefdirectpurchasersettlement.com/assets/Documents/Operative%20Complaint.pdf

In Re Cattle Antitrust Litigation: Memorandum Opinion and Order Granting Defendants’ Motions to Dismiss dated September 28, 2020. https://www.calt.iastate.edu/files/files-article/in_re_antitrust_order_granting_motion_to_dismiss.pdf

In Re Cattle Antitrust Litigation: Memorandum Opinion and Order dated September 14, 2021. https://aglaw.psu.edu/wp-content/uploads/2022/09/In-re-DPP-Beef-Memo-Opinion-9.14.21.pdf

In Re Cattle Antitrust Litigation: Memorandum of Law in Support of Defendants’ Joint Motion to Dismiss the Consolidated Amended Class Action Complaint dated September 13, 2019. http://oklahomafarmreport.com/wire/news/2019/09/media/04832_BeefPackerAntitrustResponseSept2019.pdf

In Re Cattle Antitrust Litigation: Ranchers Cattlemen Action Legal Fund United Stockgrowers of America et al. v Tyson Foods, Inc. et al. 2019. Class action complaint filed by fed cattle producers on May 7, 2019.  https://aglaw.psu.edu/wp-content/uploads/2022/09/In-re-Cattle-Complaint-5.7.19.pdf

Pacific Agri-Products v. JBS USA Food Company Holdings et al. 2019. Class action complaint filed by a direct buyer on October 16, 2019. https://www.courtlistener.com/recap/gov.uscourts.mnd.183132/gov.uscourts.mnd.183132.1.0.pdf

Peterson et al. v. Agri Stats, Inc. et al. 2019. Class action complaint filed by indirect buyers on April 26, 2019. https://www.hbsslaw.com/uploads/case_downloads/beef-antitrust/2019-04-26-hagens-berman-beef-antirust-class-action-lawsuit-complaint.pdf

U.S. and Plaintiff States v. JBS S.A. and National Beef Packing Company, LLC. 2008. https://www.justice.gov/atr/case-document/complaint-137