Biden gives small meat processors $1B to support competition

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Dive Brief:

  • President Joe Biden announced a plan to increase competition in meat processing and ultimately lower prices for consumers by providing $1 billion in American Rescue Plan funds to help independent producers. In a statement, the president said his administration aims to help small processors compete with the four industry giants who dominate anywhere from 55% to 85% of U.S. beef, pork and poultry production.
  • USDA will offer grants totaling $375 million for independent processing projects, as well as funds to boost financing options for small producers, provide technical expertise, assist with inspection pressures and support worker safety and create jobs with fair wages in rural parts of the country. 
  • This latest effort at boosting independent processors and industry competition comes after the Biden administration announced plans last September to crack down on alleged meat price fixing among large meat processors.

Dive Insight:

High meat prices are currently hitting consumers hard at the grocery store, with beef alone having spiked by more than 20% last year, according to the Bureau of Labor Statistics. In remarks on Monday to a group of farmers and ranchers, Biden laid the blame for rising meat prices at the feet of the four biggest producers in beef, pork and poultry.

“Without meaningful competition… our farmers and ranchers have to pay whatever these four big companies say they have to pay, by and large,” Biden said. “These companies can use their position as middlemen to overcharge grocery stores and, ultimately, families.”

Agriculture Secretary Tom Vilsack announced an online portal, created with the Justice Department, that will make it easier for farmers to anonymously report practices in the industry that are anti-competitive. Vilsack said that $800 million of the plan’s funds will be used to address meatpacking capacity and workforce issues. This includes $375 million that will go toward grants for new facilities and expansions for smaller meatpackers, with $150 million invested in about 15 efforts this spring, and an additional $225 million this summer.

“We’re going to need a lot of innovation in this industry. We’re going to need new business models,” Vilsack said. “And small- and mid-sized facilities need to have the opportunity to have this innovation, as opposed to the big four.” According to White House estimates, four companies control 85% of the beef market, four firms command 54% of poultry and the top four pork processing firms dominate 70% percent of that market.

Responses to the president’s remarks and plan from meat industry groups were mixed. In a statement, industry group North American Meat Institute (NAMI) slammed Biden for “blaming inflation on private industry” and not prioritizing labor shortages as the biggest problem causing rising prices.

“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,” said NAMI President and CEO Julie Anna Potts.

The United States Cattlemen’s Association, which represents 175,000 cattle producers and feeders, praised the administration’s plan. “We are hopeful that the Action Plan unveiled today will help bring transparency and true price discovery to the cattle marketplace,” USCA President Brooke Miller said, ” … and invest in a stronger — and more American — meat industry.”



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