Biden plans on meat prices according to the administration’s Meat Price Control Plan intends to take a harder stance against meatpacking companies that it believes contribute to grocery store sticker shock.
Four companies dominate much of the US meat processing market, and in a blog post on Wednesday, top advisers to President Joe Biden accused those companies of rising meat prices and it’s why Biden plans on meat prices look to rein on the ‘rogue’ pricing.
The administration will direct $1.4 billion in COVID-19 pandemic stimulus funding to small meat producers and workers as part of a set of programs, administration aides said in a blog post. Further, they committed to “take action to combat illegal price-fixing.”
According to the most recent USDA data, four companies butchered approximately 85 percent of the grain-fed cattle in the United States processed into steaks, beef roasts, and other consumer cuts of meat in 2018.
Cargill, a global commodity trader, headquartered in Minnesota; Tyson Foods Inc, a chicken producer and the largest meat company in the United States by sales; Brazil-based JBS SA, the world’s largest meatpacker; and National Beef Packing Co, which is owned by Brazilian beef producer Marfrig Global Foods SA.
Tyson Foods, which sells beef, pork, and chicken, refuted the White House’s statement that concentration in the meatpacking industry is causing price increases. The corporation cited the pandemic and workforce scarcity in the United States as reasons for the production constraints. Its stock dropped 1.4 percent to $76.17.
“Tyson’s size enables it to function efficiently, which results in lower consumer prices,” the business stated.
Cargill, JBS, and National Beef have all remained silent.
A Rise in Meat Prices
Issuing provocative statements that disregard the basics of how supply and demand drive markets achieves nothing, said Mark Dopp, chief operating officer of the North American Meat Institute, a trade association representing meatpackers.
According to the White House, beef, pork, and poultry price increases accounted for more than half of the rise in Americans’ prices for the food they eat at home since December. The administration believes those companies are reaping undue profits due to the stimulus’s intervention in boosting demand for their products.
“We’ve contributed to the market’s sustainability, and it’s disheartening to see these companies reverse course and raise prices,” Bharat Ramamurti, deputy director of the White House’s National Economic Council, said in an interview.
“What we are witnessing today reeks of pandemic profiteering, and this is precisely the type of activity that the administration finds alarming.”
Biden plans on meat prices vis-a-vis US CPI, & Inflation
In July, beef and veal prices increased 6.5 percent yearly in the United States, while poultry prices increased 5.3 percent and pork prices increased 7.8 percent. Poultry prices have increased by the most since 2004, and beef, veal, and pork prices have increased since 2014.
Inflation has presented a severe threat to Biden’s efforts to contain the COVID-19 pandemic-his priority as President-and to implement an economic recovery from the recession created by the pandemic.
In part, the Biden administration has responded by stepping up efforts to crack down on what it sees as price-fixing and monopolistic activity that could lead to price increases. Friday is the first meeting of Biden’s new White House Competition Council.
The USDA and the Department of Justice have been investigating price-fixing in the poultry processing sector for some time.
“Over time, the objective is to bring these prices down,” Ramamurti explained.
US lawmakers seek heightened oversight of the beef industry in response to growing worries about anti-competitive activity in the wake of the pandemic and a cyberattack on JBS USA.
The administration stated on its blog that it is “encouraged” by bipartisan legislation that might facilitate more price bargaining in the meat industry.