Reuters writer Leah Douglas reported this week that, “The United States will issue new rules and $1 billion in funding this year to support independent meat processors and ranchers as part of a plan to address a lack of ‘meaningful competition’ in the meat sector, President Joe Biden said on Monday.
“The initiative comes amid rising concerns that a handful of big beef, pork and poultry companies have too much control over the American meat market, allowing them to dictate wholesale and retail pricing to profit at the expense of their suppliers and customers.”
“The steps include $375 million in grants to help independent meat producers; $275 million in capital; $100 million in training for the meat and poultry workforce; and $100 million to reduce inspection costs on ‘small and very small processing plants,’ a statement said. The White House said the funding comes from the $1.9 trillion American Rescue Plan passed by Democrats through Congress in March.”
And Wall Street Journal writers Patrick Thomas and Catherine Lucey reported in today’s paper that, “The Biden administration on Monday outlined tighter regulations for U.S. meatpackers, accusing the industry of inflating Americans’ food bills, as meat companies say they are experiencing persistent supply chain problems and labor shortages as the economy recovers from the pandemic.
“President Biden’s push to tackle meat prices comes as his administration seeks to ease inflation, which hit a nearly four-decade high in November. Inflation has emerged as a pressing concern for American voters, a Wall Street Journal poll released last month found, and Republicans have been criticizing Mr. Biden over high prices for months.
“The White House’s efforts to bring down meat prices aim to foster competition and bolster U.S. farmers in a roughly $213 billion industry in which the four largest companies control 85% of beef production and 54% in poultry, according to the administration. The steps range from funds for regional meat processors to help them better compete with big companies, to stricter rules for livestock purchasing and meat labeling, which are aimed at supporting U.S. farmers.”
Four big companies control 50+% of meat processing.
These middlemen use their position to overcharge grocery stores and ultimately, consumers. @POTUS is announcing an action plan to strengthen competition and keep fighting for fair prices for farmers, ranchers, and families. pic.twitter.com/QiIEwEBByH
— Jen Psaki (@PressSec) January 3, 2022
The Journal article noted that, “Mr. Biden has alleged that the biggest U.S. meat companies use their scale to pay farmers less while lifting meat prices.”
“Capitalism without competition isn’t capitalism—it’s exploitation,” Biden says, vowing to take on big meat conglomerates that have squeezed out small farmers https://t.co/xNoSjoSG9R pic.twitter.com/3uUvqFjIYe
— Bloomberg Quicktake (@Quicktake) January 3, 2022
The Journal article pointed out that, “Meat industry officials have pushed back, attributing higher price tags in meat cases to deepening labor challenges in meatpacking plants and rising costs for transport, packaging and animal feed. In November, the price of items such as bacon and ground beef were up 26% and 17%, respectively, from a year earlier, according to the Labor Department’s consumer-price index.”
To stem rising food prices, the U.S. will launch a plan to combat the market power of giant conglomerates in the meat and poultry industry that “squeeze out” smaller processors https://t.co/XJYZnw9ftP pic.twitter.com/WSgeiwbSkK
— Bloomberg Quicktake (@Quicktake) January 3, 2022
Meanwhile, James Politi reported on Monday at The Financial Times Online that, “The steps announced by Biden on Monday include financial incentives, including grants, to bolster capacity among independent meat processors, and measures to facilitate credit to smaller meat producers.
Grain News on AgFax
“The White House also said it would press ahead with tighter labelling standards for ‘Made in America’ meat products, which would hurt large producers and processors that rely on imports in their production process. This could fuel tensions with exporters of meat to the US who have often complained of barriers to access the US market.”
Also on Monday, Bloomberg’s Mike Dorning reported that, “Biden didn’t answer a question on whether he would seek to break up large meat-processing companies. His efforts to inject more competition in the industry run counter to decades of consolidation since the late 1970s as the industry shifted to larger plants to cut costs and courts adopted a more permissive interpretation of antitrust law.”
Donnelle Eller, writing on the front page of today’s Des Moines Register reported that, “Biden said he wants to give producers selling their cattle more information about pricing, address consumer labeling issues, and strengthen a law designed to combat meatpacker abuses.”
The Register article added that, “The administration cited four Iowa lawmakers — U.S. Sens. Chuck Grassley and Joni Ernst, both Republicans, and U.S. Reps. Cindy Axne, a Democrat, and Randy Feenstra, a Republican, for their bipartisan legislation seeking to improve transparency in cattle pricing.”
Lawmakers from both political parties addressed cattle and meat pricing issues related to the administration’s outline in Twitter posts yesterday:
Pres Biden is mtg w farmers 2day like IA Farm Bureau Pres Brent Johnson to discuss how Big 4 packers screw cattle producers + consumers I’ve long worked to restore competition in cattle market & hope WH urges support of bipartisan Fischer Grassley Tester Wyden cattle market bill
— ChuckGrassley (@ChuckGrassley) January 3, 2022
I continue to work to advance my bipartisan legislation with @ChuckGrassley that makes important cattle market reforms to ensure robust negotiated cash sales, the building blocks of price discovery/transparency.https://t.co/Y7Mag5uyv4
— Senator Deb Fischer (@SenatorFischer) January 3, 2022
Montana ranchers must be able to compete on a level playing field.
We need to fully investigate allegations of price fixing and market manipulation, increase transparency in the cattle markets and hold big packers accountable — all things I’m working to get done.
— Steve Daines (@SteveDaines) January 3, 2022
— Rep. Cindy Axne (@RepCindyAxne) January 3, 2022
.@ChuckGrassley and I have been working across the aisle to return fairness to the cattle marketplace and improve market transparency for Iowa’s hardworking cattle producers.
Our bipartisan effort needs to be part of President Biden’s conversation with farmers today.
— Joni Ernst (@SenJoniErnst) January 3, 2022
For years, meatpackers have been seeing their profits increase while cattle producers have suffered losses. Our proposal will ensure robust negotiated trade, upholding a level playing field for all producers & packers.
Learn more about our bill here:https://t.co/L10MeMW5yf
— Rep. Randy Feenstra (@RepFeenstra) January 3, 2022
#AZ01 farmers have struggled for too long without the federal assistance they need. I’m pleased to see the Administration fighting to lower meat prices for Arizona families and protect our hardworking rural farmers, ranchers, and independent processors. https://t.co/Bxqf6svboN
— Rep. Tom O’Halleran (@RepOHalleran) January 3, 2022
Our ranchers produce the highest quality beef in the world, & they deserve access to fair markets. We continue pressing DOJ to investigate alleged price manipulation/anticompetitive behavior in cattle markets & update Congress on its inquiry into the meatpacking industry.
— Senator John Hoeven (@SenJohnHoeven) January 3, 2022
Consolidation in the ag industry has been a problem as long as I’ve been a farmer. I’m glad to see the Administration has a plan to tackle the root problems and implement many of my efforts to level the playing field for our family farmers and ranchers. 🧵https://t.co/vC6pPik2cF
— Senator Jon Tester (@SenatorTester) January 3, 2022