With inflation raising red flags for consumers across the country, the Biden administration is continuing its war on big meat processors that it claims are reaping record profits at the expense of consumers and smaller competitors.
The White House has released what it calls an action plan for “a fairer, more competitive, and more resilient meat and poultry supply chain” complete with a wide range of initiatives.
BIDEN’S BEEF: WHITE HOUSE ATTACKS MEAT INDUSTRY AS INFLATION RAGES
“In too many industries, a handful of giant companies dominate the market,” President Joe Biden said in a Monday meeting to discuss the issue. “Too often, they use their power to squeeze out smaller competitors and stifle new entrepreneurs, making our economy less dynamic and giving themselves free rein to raise prices, reduce options for consumers, or exploit workers. The meat industry is a textbook example on the price side.”
The White House has gone after meat processors repeatedly in recent months, blaming them for much of the inflation consumers face today. While overall inflation has hit a 39-year high of 6.8%, the cost of beef and veal is up as much as 20% year over year, with pork up 14% and chicken up nearly 9%.
Industry consolidation is to blame, according to the administration, with four companies controlling between 54% and 85% of the market for beef, pork, and poultry.
“You could call it corporate greed, sure,” White House press secretary Jen Psaki said in December. “You could call it jacking up prices during a pandemic.”
The Biden administration plans to allocate $1 billion from the “American Rescue Plan” to help make more room for independent processors. It also plans to step up enforcement of the Packers and Stockyards Act of 1921, the Sherman Antitrust Act of 1890, and the Clayton Antitrust Act of 1914 as a means of promoting competition. The U.S. Department of Agriculture and the Department of Justice will team up for the effort, and plans call for setting up a portal for people to report concerns about violations of the laws.
Referring to processors as a middleman, the White House fact sheet says processors can drive down profits for farmers while driving up prices for consumers. Increasing competition is touted as a way of creating stable jobs in rural areas in partnership with labor unions.
Industry groups aren’t sold on the plan.
“The Biden Administration continues to ignore the number one challenge to meat and poultry production: labor shortages,” said North American Meat Institute CEO Julie Potts in a written statement. “This tired approach is not surprising because they have refused to engage with the packing and processing sector they attack, going so far as to hold a roundtable on meat packing without a single beef or pork packer present.”
Neil Bradley, chief policy officer for the U.S. Chamber of Commerce, told the Associated Press that labor and energy costs are behind higher costs, not a surge in corporate greed. He predicted government intervention would backfire, leading to further constraints on supply and even higher prices.
The White House isn’t training all of its fire on meat processors, also calling out the Trump administration for weakening enforcement of the Packers and Stockyards Act. Other actions will include issuing new rules for labeling meat a “Product of USA,” which under current regulations only require processing to be done in the United States.
Some of the ideas enjoy bipartisan support. In November, a group of two Democratic and Republican senators from Midwestern and Western states announced the Cattle Price Discovery and Transparency Act. Iowa Sen. Chuck Grassley praised Biden for his meeting to discuss how the big four packers “screw” cattle producers and consumers.
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“I’ve long worked to restore competition in cattle market & hope [the White House] urges support of bipartisan Fischer Grassley Tester Wyden cattle market bill,” he tweeted on Jan. 3.
