In July 2021, President Biden signed an Executive Order on Promoting Competition in the American Economy, with the intention to create a fairer, more adaptable economy.  Over the past several decades, we’ve witnessed many industries fall to the control of large companies, in turn raising prices and limiting options for American households as well as pushing out small businesses. An example of an industry that has been affected by this movement is meat and poultry processors.

In the meat and poultry industry, four large meat- packing companies control 85 percent of the beef market and the top four poultry processing forms control 54 percent of the market. Additionally, the top four pork processing firms control about 70 percent of the market. Meatpackers and processors are a vital part of the food supply chain, as they buy from farmers and sell to retailers, such as grocery stores. These processors and meatpackers manage a great deal of the supply chain, so much that they can increase their own profits at the expense of both farmers and consumers. Majority of farmers do not have the authority to choose who buys their product and little opportunity to negotiate, resulting in their share of every dollar spent on food to plummet. To compare, fifty years ago, farmers were receiving 60 cents for every dollar a customer spent of beef, where nowadays they are receiving 39 cents.

When a small number of companies control such a decent amount of the market, the food supply chains are likely to be shaken up. President Biden met with farmer and processors across the country on January 3, 2022, to discuss how they’ve been impacted by the change in supply chains and to discuss his administration’s action plan for a “fairer, more competitive, and more resilient meat and poultry supply chain.”

In the Action Plan, there are several strategies dedicated by the Biden- Harris Administration to support meat and poultry processors, which include:

• Contributing $1 billion in American Rescue Plan funds for expansion of independent processing capacity.
• Ramp up competition and create more options for producers and consumers in the near future by creating independent processing projects that will increase competition and enhance resiliency of the food supply chain.
• Support private lenders that invest in independently owned food processing and distribution infrastructure.
• Build a well- trained workforce, in a safe environment with fair wages.
• Issue new rules under the Packers and Stockyards Act, which is the law designed to dispute abuses by the meatpackers and processors and have stronger enforcement of the act.
• Publish new “Product of USA” labeling rules so shoppers can have a better understanding of where their meat and poultry products are coming from.
• Strengthen transparency in the cattle markets so ranchers are paid fairly for their work.

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Picture Credit Susanne Kuehne 

Posted on 27 January 2022