Despite his recent senile, rambling comments about the meat industry, President Biden stands ready to try and do something to help get the industry going on the right track. Putting $1 billion towards these efforts, he is reappropriating the money from the $1.9 trillion American Rescue Plan. This $1 billion will offer grants to help independent meat processors, provide funding to review anti-competitive practices within the meat industry, and boost the capacity for meatpacking as a whole in the country.
With prices going sky high on most meat products as a result of inflation, this is kind of like sticking a band-aid on something that needs stitches. Until the costs to grow, transport, slaughter, package, distribute, and sell the meat comes down, this really won’t do much of anything. That’s the dangerous part about this move.
Tyson Foods, Cargill, the National Beef Packing Company, and JBS will receive massive protections at the same time. These four producers make up 85% of the market currently. Years ago, that number was as low as 35% and the local meatpacking plants and butcher shops had a solid foothold within the industry. As things currently sit, there is little being done to help them regain that status either.
Back in October 2021, Biden hammered another nail in the coffin of the small level meatpacker by having the Department of Homeland Security (DHS) announce the end of Immigration and Customs Enforcement (ICE) raids for undocumented workers. This never-ending supply of cheap and reliable labor may have kept the factories open, but more than that, it ensured profits would continue to grow year after year no matter what the economy does.
This move was done in staunch opposition to the push for robotics and innovation over illegal immigrant workers as pushed for by President Trump. Claire Kelloway of the Open Markets Institute laid out some framework for steps Biden could take if he truly wants to fix the situation. “It can start by issuing stronger rules under the Packers and Stockyards Act — a 1921 law that is supposed to protect farmers against unfair and deceptive business practices. Biden’s USDA could pass rules that actually give contract farmers the opportunity to seek justice when jerked around by meatpackers, and cut loopholes for corporations that justify farmer mistreatment as a reasonable business decision.”
Kelloway has some great ideas here, and she could certainly use some extra support from other government officials. One of her best ideas would require massive government involvement, yet it could yield the longest-lasting and best results. “But effective antitrust enforcement needs to go beyond breaking up Big Meat or cracking down on price-fixing. Regulators also need to set new rules of fair play to ensure alternative meatpacking models have a chance to succeed. The FTC has extensive power to issue fair competition rules that would do far more to dismantle corporate dominance, in meatpacking and beyond, than breaking up Big Meat alone.”
The idea of making ‘big meat’ break up and be formed into smaller groups is just smart business. Competition keeps prices fair for consumers, encourages proper levels of cleanliness, ensures adequate compensation for workers, and breeds innovation. It also ensures that there is a market for all; not just the cheapest to produce products. However, this is a fruitless effort if there is no other action behind it.
Aside from more competition, there needs to be more done about inflation. If other workers making the supplies (farmhands, truck drivers, diesel techs, meat tray producers, etc) are needing to be paid more because their dollar is worth less, that means the cost of the final product is still sky-high. This is truly an all-in process as each key to the process is reliant on the other.
