President Biden announced another crackdown on the meat processing industry on Monday in an effort to “fight for a fair price” for both cattle ranchers and farmers and the American people.
Citing monopolies in the meat processing market, the Biden administration announced on Monday that it would spend $1 billion from a US rescue plan to expand the capacity of independent meat processors.
Biden said, ‘I was sitting in my kitchen yesterday and there was a sunroom outside the kitchen, my wife was there with her sister and a good friend. ‘ She was saying, ‘Do you know if it’s over $5 for a pound of hamburger meat? five dollars!’
‘A pound of beef today costs Rs 5, compared to less than Rs 4 before the pandemic.’
white House A release noted that four large firms control 85% of the beef market, four processing firms control 54% of the poultry market and four firms control 70% of the pork market.
“Our farmers and ranchers have to pay whatever these four big companies say, but that is only half of it. These companies can use their position as a middleman to overcharge grocery stores and eventually families,’ Biden said.
‘Yet in many industries, a handful of large companies dominate the market.. and often they use their power to squeeze out smaller competitors and suppress new entrepreneurs.’
The new plan will provide grants to independent processors to increase competition, work with lenders to provide more capital for independent processors and back private lenders who invest in independently owned food processing and distribution.
Biden is launching another crackdown on the meat processing industry in an effort to fight rising prices
The White House noted in a release that four large firms control 85% of the beef market, four processing firms control 54% of the poultry market and four firms control 70% of the pork market.
‘I’ve said it before and I’ll say it again – capitalism without competition is not capitalism, it is exploitation. This is what we are seeing in meat and poultry farming.
The President said that farmers and ranchers earn much less for their share of the produce as compared to previous years.
‘Fifty years ago, cattle ranchers got more than 60 cents for every dollar a family spent on beef. Today, he gets about 39 cents. Fifty years ago, hog farmers would get 40 to 50 cents for every dollar they spent. Today, it’s about 19 cents,’ Biden said.
The President largely ignored the shouted questions of journalists on the Covid-19 test, as he was thrown out of the room before the meeting.
The White House said meat and poultry prices are the biggest contributors to rising food costs at grocery stores.
Of the $1 billion allocation, $100 million will go to defraying the cost of inspections of smaller processing facilities. Another $100 million is going to address supply chain challenges like cold storage and warehousing.
Another $800 million will go to grants and loans for smaller facilities.
The Biden administration is also tightening restrictions on what could be called a ‘product of the USA’. Under current labeling rules, meat products must only be packaged in the US, and may be raised overseas but still be labeled as a US product. It will issue stronger rules to combat ‘abuse’ by meat processors and the Department of Justice and the Department of Agriculture will launch a new portal for whistleblowers to report potential violations of competition laws.
The Biden administration has long blamed the meat industry for rising prices at grocery stores and has taken steps to tackle illegal pricing.
According to Labor Bureau data, the consumer price index rose to a 39-year high of 6.8% in November on a year-on-year basis.
In December, White House Press Secretary Jen Psaki blamed the “meat conglomerate’s greed” for the price hike.
‘So, for example, the President, the Secretary of Agriculture have both talked about what we see as the lure of the meat conglomerate.
‘This is an area where people go to the grocery store and they’re trying to buy a pound of meat, two pounds of meat, 10 pounds of meat, that’s it – the prices are high.’
He continued, ‘You could call it ‘corporate greed. Sure. You can call it ‘raising prices during a pandemic’.
Psaki said global supply chain issues – for which even Biden’s critics blame him – have also contributed to rising prices, before finally admitting that Biden blamed pandemic profiteering.
“There are other areas where we’ve seen growth because of supply chain issues, and we’re seeing those increases around the world as it relates to gas prices, oil supply and things along those lines,” she said. .
‘So, I would say there are some areas where we’ve seen corporations benefit from — benefit from the pandemic. And — and, of course, the President would agree with that component.’
Biden’s July executive order cracking down on monopolies strengthened existing antitrust enforcement and aimed to tackle high prescription drug prices.
He has also gone ahead with easing supply chain issues through public-private partnerships and expanding operating hours at two of America’s largest ports.
But inflation has become a major political liability for Biden, who last week called rising prices a ‘bump in the road’, with a recent poll finding that just 28 percent of Americans believe he is. Delegating the issue correctly while 69 percent reject it.
The Consumer Price Index rose 6.8% in November over the previous year, the fastest growth in 39 years. Bacon costs 21% and beef costs 25%. According to the Bureau of Labor Statistics, the index for meat, poultry, fish and eggs is up 16% from November last year.
The White House published an analysis in November that found meatpackers’ profits rose 300% during the pandemic.
But, Julie Anna Potts, president of the North American Meat Institute, said the calculations “weirdly and misleadingly combine these areas, and the council’s analysis includes data on rising input costs, rising fuel costs, supply chain difficulties and labor shortages.” are not easily included which affect the price of the meat. Retail shelf.’
Democratic economist Larry Summers, who has long warned that last year’s inflation was more than ‘temporary’ and said Biden’s stimulus package could push prices up further, said the administration’s antitrust measures amount to ‘science. denies’.
The emerging claim that mistrust can counter inflation reflects a “denial of science,” tweeted a Harvard economist who served in both the Clinton and Obama governments. ‘There are several areas, such as temporary inflation, where serious economists differ. Antitrust as an anti-inflation strategy is not one of them.
Summers said Biden should instead focus on the labor shortage.
“The hipster Brandeisian antitrust, with which the administrator and his appointees flirt, is more likely to rise than lower prices,” Summers said.
Samar said the dismantling of industries such as meat packing would reduce supplies in the short term and drive up prices.
Summers said that in addition to taking more action to address the labor shortage, Biden should reduce his ‘Buy America’ emphasis in favor of buying cheaper goods, easing restrictions on energy production and other regulations, and lowering tariffs. should do.
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