Lack of Competition in US Meat Industry Equates “Exploitation”, Biden Says


The move comes amid growing fears that a handful of large beef, pork and poultry companies have too much control over the U.S. meat market, allowing them to dictate wholesale prices and retailers to profit from them at the expense of their suppliers and customers.

“Capitalism without competition is not capitalism. It’s exploitation, ”Biden said. “This is what we are now seeing in the meat and poultry industries. “

A recent White House analysis found that the top four meat packers – Cargill, Tyson Foods Inc, JBS SA and National Beef Packing Co – control between 55% and 85% of the market in the pork, livestock industries. and chicken..

The Department of Agriculture will spend $ 1 billion in US bailout funds to develop the independent meat processing sector, including funds to finance grants, guaranteed loans and worker training, he said. said Agriculture Secretary Tom Vilsack, speaking at an event with Biden.

The USDA will also be proposing rules this year to strengthen enforcement of packers and stockyards and to clarify the meaning of “Product of the United States” meat labels, which national breeders say benefits unfairly multinational corporations that raise cattle overseas and slaughter only in the United States. .

Attorney General Merrick Garland, also speaking at the event, said “too many industries have become too consolidated over time” and that the Department of Justice’s antitrust division has been chronically under- funded.

The Biden administration last year issued an executive order that called for a whole-of-government approach to antitrust issues.

A central concern in agriculture has been meat prices, which have risen as the White House is fighting inflation. A December analysis by the White House’s economic council found a 120% increase in gross profits for the top four meat packers since the start of the pandemic.

The meat industry said the White House analysis was inaccurate and criticized the new plan.

National Chicken Council President Mike Brown called the plan “a solution in search of a problem.”

North American Meat Institute spokeswoman Sarah Little said factory staffing remains the biggest problem for meat packers and the White House plan would not solve it.

“Our members of all sizes cannot function at full capacity as they struggle to employ a stable workforce for the long term,” she said. “The new capacities and the increased capacities created by the government will have the same problem. “

Eric Deeble, policy director of the National Sustainable Agriculture Coalition, applauded the plan, calling it “a very positive step in ensuring that farmers and ranchers receive fair prices.”

The regulation under the Packers and Stockyards Act “could have a significant impact,” said Peter Carstensen, professor emeritus of law at the University of Wisconsin-Madison and former antitrust lawyer at the Department of Justice. But he noted that investing in independent processing itself would not solve market concentration.

Austin Frerick, deputy director of the Thurman Arnold Project at Yale University, an antitrust research center, said the plan does not go far enough to tackle the power of the best meat packers.

“I don’t think this (plan) will significantly change the concentration numbers,” he said.

(Additional report by Diane Bartz and Trevor Hunnicutt; Editing by Marguerita Choy)

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