By Lura Roti for South Dakota Farmers Union
Supply and demand drive the market. Or do they? Market manipulation was the focus of a panel discussion hosted during the South Dakota Farmers Union State Convention held in Huron, December 1.
U.S. Department of Justice Assistant Attorney General, Michael Kades was among the panelists to discuss this challenge with family farmers and ranchers. The timing of this discussion was spot on, explained Buffalo cattle rancher Joe Painter and Gregory cattle farmer Hank Wonnenberg.
Both producers recently witnessed prices driven by forces not connected to supply, plummet at two different auction markets.
“Cattle numbers are down, yet I saw calves November 20 only bring $1,150. These same calves in October would have brought $1,500,” Painter said.
On the 20th Painter was just an observer. But 300 miles away, Hank Wonnenberg’s calves had just sold. On November 18, he and his wife, Melissa took 65 weaned calves to the sale barn.
“They sold for $300 bucks less a head,” shared Wonnenberg, during the panel discussion. “If it is a healthy market, with vibrant competition, then it is supply and demand driven. But this year, supply was low, and the prices were great – until November when we sold – and the supply is still low. It feels obvious to me that at some level they are controlling the market.”
Wonnenberg and Painter and other South Dakota cattle producers are not alone in thinking that something is not quite right.
The Department of Justice is also concerned.
“We have concerns about how livestock markets are operating,” said Kades, after he qualified that he is not able to discuss specifics on any on-going investigations. “Anytime people think there is something suspicious going on, we want to hear about it. We feel strongly about this and are committed to promote competitive markets, particularly in agriculture.”
Farmers Union State Convention is not the first time Kades spoke with South Dakota cattle producers about market manipulation. He first met with them in fall 2021 during a National Farmers Union D.C. Fly-In.
“It had a ground-breaking effect on our staff – listening to folks talk about their specific problems. Not reading about them, in the way that anti-trust often works,” Kades said.
Wessington Springs cattle rancher, Scott Kolousek remembers the initial meeting with Kades. “I came out of that meeting with a sense of relief that things would happen,” Kolousek said. “I have a genuine feeling that things in D.C. are starting to change. My frustration is at the speed of it.”
After hearing Kolousek’s comments, Kades emphasized the impact of advocacy. “You have every right to demand action as fast as you can,” Kades said. “The old adage about more pressure is true in Washington, the squeaky wheel often gets the grease.”
And although Kades could not comment on investigations into the packers that are underway, Parade rancher and the panel moderator, Oren Lesmeister said he knows the Department of Justice is investigating.
“I have had calls from DOJ agents in Chicago asking questions,” Lesmeister said. “They are investigating this.”
Wonnenberg said he appreciated the opportunity to speak directly to the Department of Justice.
“I thought having him available and open for questions on the floor, where we could share our stories and voice our concerns and explain what we are going through was such an awesome opportunity,” Wonnenberg said. “And the way it was received by Michael, to me, it did not seem he was surprised by what we had to say. It seemed he was glad to hear the reinforcement of what he knows.”
Ahead of the Dec. 1 panel discussion, Kades toured the Mitchell sale barn and on Dec. 2 he visited a couple Jerauld County feedlots.
“He cares about doing his job thoroughly and fairly. That is why he was doing what he is doing, he has never been around anything like a sale barn or a feedlot and he wanted to know what they were like,” said Doug Sombke, President of South Dakota Farmers Union. “He is the right guy for the job because he cares about doing what is right. He cares about the average family farmer.”
Kolousek agreed. “After hearing from Kades, I felt reassured,” he said.
In addition to Kades, Lesmeister and Kolousek, Scott Blubaugh, President of American Farmers & Ranchers also served on the panel. To learn more about the work South Dakota Farmers Union does to advocate for grassroots policy that supports family farmers and ranchers, visit www.sdfu.org.