The Biden-Harris Administration recently revealed an action plan to create a “fairer, more competitive, and more resilient meat and poultry supply chain.” To boost competition in the meat and poultry processing sector, and support workers in the independent processor industry, the Administration will dedicate US$1 billion in American Rescue Plan funds.
The plan emerged in response to decades of market domination by a handful of large meat and poultry processing companies that control a majority of the business. According to a report from the Open Markets Institute, four firms control 85 percent of the beef market, four companies dominate 54 percent of poultry, and the top four processing firms control about 70 percent of the pork-processing market.
“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,” the White House states. “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.”
The Action Plan offers four core strategies for creating a more competitive, fair, resilient meat and poultry sector. The plan promises better earnings for producers and more choices and affordable prices for consumers.
“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,” the White House states.
Along with providing US$1 billion in funding for independent processors, the Biden-Harris Administration also aims to strengthen the rules that protect farmers, ranchers, and consumers. This includes issuing new, stronger rules under the Packers and Stockyards Act, a law designed to counteract abuses by the meatpackers and processors. The Administration will also issue new “Product of USA” labeling rules to help consumers understand where their meat comes from.
Another core strategy of the plan involves promoting “vigorous and fair enforcement” of existing competition laws and ensuring collaboration among different government agencies. In line with this strategy, the U.S. Department of Justice (DOJ) and the U.S. Department of Agriculture (USDA) recently announced a new joint initiative that would create a portal for reporting concerns unfair and anticompetitive practices.
The plan will also seek to increase transparency in cattle markets to ensure fair prices for ranchers. To do so, the USDA recently began issuing new market reports that provide insight into the overall market dynamics underpinning formula cattle trades. The Biden-Harris Administration will also work alongside Congress to pass legislation that ensures farmers and ranchers have fair access to processing capacity.
The plan is receiving mixed remarks from meat industry groups. In a recent statement, Julie Anna Potts, President and CEO of the North American Meat Institute (NAMI), said that the Biden-Harris Administration is “blaming inflation on private industry” and continues to ignore labor shortages, which are “the number one challenge to meat and poultry production.”
But Brooke Miller, President of the United States Cattlemen’s Association (USCA), praised the plan, saying the USCA hopes it “will help bring transparency and true price discovery to the cattle marketplace.”
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Photo courtesy of Etienne Girardet, Unsplash