WASHINGTON – President Joe Biden met virtually with family farmers and ranchers on Monday to highlight his administration’s ongoing effort to support independent meat processors, and to pressure the four biggest meatpacking companies into easing prices for consumers.
With meat and poultry prices leading the broader nationwide increase in the cost of groceries, the White House has spent months arguing that anti-competitive consolidation within the meatpacking industry is to blame for the soaring prices.
Four companies – Tyson, JBS, Marfrig and Seaboard – control as much as 85% of the nationwide meatpacking business, according to a White House estimate.
Overall, the price of groceries has climbed 6.4% over the past year, according to November data from the U.S. Department of Agriculture. Yet meat, poultry, fish and egg prices have grown even more over the same period, at a rate of 12.8%.
“While profits go up [at the biggest meatpackers], the prices you see at the grocery stores go up commensurate,” Biden said at the Monday event at the White House.
At the same time, he said, “the prices farmers receive for the products that they are bringing to market go down. This reflects the market being distorted by lack of competition.”
The administration’s plan to tackle this lack of competition is centered around supporting smaller and independent meatpackers, essentially creating new competition for the big four.
“Capitalism without competition isn’t capitalism. It’s exploitation,” Biden said. “That’s what we’re seeing in the meat and poultry” industries, he added.
The industry pushed back on Biden’s remarks. Following the White House event, Julie Anna Potts, president of the North American Meat Institute, a leading meatpacking industry group said Monday the White House was ignoring the number one challenge facing the meatpacking industry: labor shortages.
“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,” Potts said in a statement to CNBC.
“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,” said Potts. “Consumers know better.”
Accompanied by Attorney General Merrick Garland and Agriculture Secretary Tom Vilsack, Biden detailed an effort underway at USDA to allocate around $1 billion in Covid relief funds to support independent meatpackers and lower barriers of entry to the industry.
Source Article from https://www.cnbc.com/2022/01/03/inflation-biden-aims-to-help-small-meatpackers-as-prices-soar.html
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