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President Biden Met Virtually with Farmers, Outlines Plans to Tackle Meat Prices

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.”

Jeff Stein and Laura Reiley reported in today’s Washington Post that, “The White House unveiled measures Monday designed to boost competition in the meatpacking sector.

“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.

“Biden Makes Push to Tackle Meat Prices,” by Patrick Thomas and Catherine Lucey. The Wall Street Journal (January 4, 2022).

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.”

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.”

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.”

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.

“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.”

“Biden Launches Plan to Fight Meatpacker Giants on Inflation,” by Mike Dorning. Bloomberg News (January 3, 2022).

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:

Keith Good Photo

Keith Good is the Farm Policy News editor for the farmdoc project. He has previously worked for the USDA’s National Agricultural Statistics Service, and compiled the daily News Summary from 2003-2015. He is a graduate of Purdue University (M.S.- Agricultural Economics), and Southern Illinois University School of Law.

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