January 3, 2022
In the first week of 2022, the U.S. meat and poultry industry is in the spotlight with the White House releasing an action plan to create a “fairer, more competitive, and more resilient meat and poultry supply chain.”
Per a White House press release, “In July, President Biden signed an Executive Order on Promoting Competition in the American Economy to create a fairer, more resilient, and more dynamic economy. Over the last few decades, we’ve seen too many industries become dominated by a handful of large companies that control most of the business and most of the opportunities—raising prices and decreasing options for American families, while also squeezing out small businesses and entrepreneurs.
“The meat and poultry processing sector is a textbook example, with lack of competition hurting consumers, producers, and our economy. Four large meat-packing companies control 85% of the beef market. In poultry, the top four processing firms control 54% of the market. And in pork, the top four processing firms control about 70% of the market. The meatpackers and processors buy from farmers and sell to retailers like grocery stores, making them a key bottleneck in the food supply chain.
“When dominant middlemen control so much of the supply chain, they can increase their own profits at the expense of both farmers—who make less—and consumers—who pay more. Most farmers now have little or no choice of buyer for their product and little leverage to negotiate, causing their share of every dollar spent on food to decline.
“Even as farmers’ share of profits have dwindled, American consumers are paying more—with meat and poultry prices now the single largest contributor to the rising cost of food people consume at home. And, when too few companies control such a large portion of the market, our food supply chains are susceptible to shocks. When COVID-19 or other disasters such as fires or cyberattacks shutter a plant, many ranchers have no other place to take their animals. Our over-reliance on just a handful of giant processors leaves us all vulnerable, with any disruptions at these bottlenecks rippling throughout our food system.
“On January 3, President Biden met with farmers, ranchers, and independent processors from across the country to hear from them and to announce the Biden-Harris Administration’s Action Plan for a Fairer, More Competitive, and More Resilient Meat and Poultry Supply Chain.”
The Action Plan includes four core strategies and will utilize $1 billion in American Rescue Plan funds for expansion of independent processing capacity. Specifically, the Biden-Harris Administration plans to:
Expand independent processing capacity, and support workers and the independent processor industry.
Increase transparency in cattle markets, so that ranchers can get a fair price for their work.
Issue new, stronger rules under the Packers and Stockyards Act—the law designed to combat abuses by the meatpackers and processors.
Issue new “Product of USA” labeling rules so that consumers can better understand where their meat comes from.
At press time, a few agricultural organizations had commented on the announcement from the Biden-Harris Administration.
Bill Bullard, R-CALF USA CEO said in a recent interview, “We recognize that this level of government involvement is unprecedented, and that it’s critical for reversing the decades of inattention, neglect and denial that facilitated the elimination of competition in our U.S. cattle industry.
“Our nation’s cattle industry is in a serious crisis and while we appreciate the administration’s plans to write rules with which to implement portions of the Packers and Stockyards Act, correct the exploitive ‘Product of USA’ beef label, and increase market transparency by requiring more information, as well as its attempt to identify any new, potential violations of competition laws, the fact remains that the administration has not announced that it will take decisive enforcement action to protect America’s cattle producers from the harms they’ve been experiencing for the past seven years, and we remain disappointed with that omission.”
Brooke Miller, United States Cattlemen’s Association president, said in a statement, “Today's announcement puts into motion what our members have, for years, urged action on - empowering the independent producer and processor to create a more robust and resilient food system.
“USCA commends the Biden-Harris Administration for its persistence in working to restore competition throughout the U.S. economy. We are hopeful that the Action Plan unveiled today will help bring transparency and true price discovery to the cattle marketplace, bring back truth in labeling through the closure of the Product of the U.S.A. loophole, and invest in a stronger - and more American - meat industry. We look forward to working with the Administration to implement the provisions outlined in this Action Plan."
Additional information on this Action Plan can be referenced by the White House Competition Council. Click here to read more.
The opinions of Amanda Radke are not necessarily those of beefmagazine.com or Farm Progress.
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