White house down rating11/20/2022 ![]() ![]() Government regulators were willing to go along with one merger after another, so long as hamburger was cheap.īut a new generation of antitrust scholars - and the Biden administration - are more skeptical of supersized corporate power. In recent decades, that "consumer welfare" argument carried a lot of weight. The meatpacking companies argue that in normal times, their giant size makes them more efficient and helps keep prices for consumers low. A surge in meat prices is contributing to higher inflation, raising the Biden administration's concern.Įnding sticker shock at the butcher counter "So it should not surprise any of us that as a result, the price for cattle fell while the price for beef rose."Ī customer shops for meat at a supermarket in Chicago on June 10. "This led to an oversupply of live cattle and an undersupply of beef, all while demand for beef products is at an all-time high," Miller said. Miller told a Senate committee this summer that the pandemic and other shocks have forced processors to slow down their slaughtering operations, so there are fewer cattle coming in and fewer steaks going out. "The present spread between live cattle and beef prices has everything to do with the law of supply and demand," says Shane Miller, group president for fresh meats at Tyson, the nation's largest beef and chicken processor. 2 chicken processor, Pilgrim's Pride, pleaded guilty this year to conspiring with others to limit production and keep chicken prices artificially high.īut meatpackers reject the idea that industry consolidation is hurting ranchers or consumers. The Justice Department is also investigating alleged price-fixing in the chicken market. The administration is setting aside $500 million to help bankroll new meat processors to compete with the big four. The White House wants to open up the Big Meat industry The Biden administration is taking steps to try to bring more suppliers to the meatpacking industry. "And there are now record profits or near-record profits for those in the middle.Īgriculture Secretary Tom Vilsack speaks on rising food prices at a press briefing at the White House on Sept. "Farmers are losing money on cattle, hogs and poultry that they're selling at a time when consumers are seeing higher prices at the grocery store," Agriculture Secretary Tom Vilsack said last week. The administration says industry giants like Tyson and Smithfield have such a stranglehold on processing operations that they can command higher prices at the supermarket, while also putting the squeeze on farmers, who in some cases can't even cover their costs. "It's really gotten to the point where there's no competition in our industry at all." "There has been merger after merger," Jones said. But he welcomes the administration's push to bring more competition to the highly consolidated meatpacking industry. Jones calls himself a conservative Republican. That means farmers and ranchers have few choices of where to sell their livestock. A similar handful of companies also controls processing of more than half the chicken in the country and two-thirds of the pork. is slaughtered and processed by just four big companies, including Tyson Foods and JBS USA. The White House is responding by shining a spotlight on "Big Meat," as part of a larger campaign against what the Biden administration calls "anti-competitive" behavior by big business - even as meatpackers insist they are not to blame. Pork prices jumped 9.8% in the last year while chicken prices jumped 7.2%. That's down slightly from June and July when inflation was running at 5.4% - but it's still near the highest level in nearly 13 years. The Labor Department reported Tuesday that consumer price index rose 5.3% in the 12 months ending in August. The surge in meat prices is contributing to high inflation. We're just talking about being able to make spaghetti or being able to make tacos." ![]() I can't even understand how people are supposed to be able to pay that kind of money for basic stuff like ground beef," says Adam Jones, who raises Angus cattle in northwest Kansas. Prices for beef, pork and chicken have surged during the pandemic, and the Biden administration believes it knows who's partly behind it: a handful of big meatpacking companies that control most of the country's supply.īeef prices alone jumped 12.2% over the last year, according to new consumer inflation data on Tuesday, making it one of the costliest items in the surging bills that consumers face today at the grocery store. The prices of meats have surged, and the White House is partly blaming the handful of meatpackers that control the industry. Packages of beef cuts are displayed at a Costco store on May 24 in Novato, Calif. ![]()
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