President Biden met virtually Monday with farmers to discuss his $1 billion plan to expand and diversify meat and poultry processing capacity. The plan, dubbed the Biden-Harris Administration’s Action Plan for a Fairer, More Competitive, and More Resilient Meat and Poultry Supply Chain, aims to tackle the issue of dwindling profits for farmers and increased food prices for consumers.
“50 years ago, ranchers got over $0.60 for every dollar a family spent on beef,” Biden says. “Today, they get about $0.39. 50 years ago, hog farmers got $0.40 to $0.50 for each dollar they spent. Today, it’s about $0.19, and the big companies are making massive profits. While their profits go up, the prices you see at the grocery stores go up commensurate. The prices farmers receive for the products they are bringing to market go down.”
According to a release from The White House, four large meat-packing companies control 85 percent of the beef market. In poultry, the top four processing firms control 54 percent of the market. And in pork, the top four processing firms control about 70 percent of the market.
“Without meaningful competition, farmers and ranchers don’t get to choose who they sell to. Or put another way, our farmers and ranchers have to pay whatever these four big companies say they have to pay by and large. But that’s only half of it. These companies can use their position as middlemen to overcharge grocery stores and, ultimately, families.”
Biden adds that USDA is rewriting the rules under the Packers and Stockyards Act, the law designed to combat abuses by meatpackers and processors. They’re also looking to issue new “Product of USA” labeling rules.
“I’ve said it before, and I’ll say it again- capitalism without competition isn’t capitalism. It’s exploitation. That’s what we’re seeing in meat and poultry and those industries now. Small, independent farmers and ranchers are being driven out of business, sometimes businesses that have been around for generations.
More details of the $1 billion plan from The White House can be found here.
American Farm Bureau Federation President Zippy Duvall commented, “AFBF appreciates the Biden administration’s continued work to ensure a fair and competitive meat processing system. We must get to the bottom of why farmers and ranchers continue to receive low payments while families across America endure rising meat prices.
“Farmers and ranchers want a fair shake. The joint initiative between USDA and the Department of Justice to create an online portal to report competition law violations, and efforts to strengthen the Packers & Stockyards Act, will go a long way to ensuring fairness in the industry. More accurately defining ‘Product of the USA’ labeling will also allow families to make more well-informed decisions at the grocery store.
“We are encouraged by the administration’s willingness to work with lawmakers on both sides of the aisle to improve price discovery in the cattle markets. We urge bipartisanship throughout this process. Securing fair prices for farmers and for families is a goal that transcends party lines.”
On the other hand, the North American Meat Institute, the nation’s trade association for meat and poultry packers and processors of all sizes, released the following statement:
“For the third time in six months, President Joe Biden and his Administration announced the same plans to spend $1 billion to fund government intervention in the market in an attempt to increase prices livestock producers receive while blaming inflation on private industry,” said Julie Anna Potts, President and CEO of the North American Meat Institute. “The Biden Administration continues to ignore the number one challenge to meat and poultry production: labor shortages. 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.
“Press conferences and using taxpayer dollars to establish government-sponsored packing and processing plants will not do anything to address the lack of labor at meat and poultry plants and spiking inflation across the economy,” said Potts. “The Administration wants the American people to believe that the meat and poultry industry is unique and not experiencing the same problems causing inflation across the economy, like increased input costs, increased energy costs, labor shortages and transportation challenges. Consumers know better.”
Potts goes on to say that the plan leaves many questions unanswered. You can read more of her response here.