President Biden announced a four-point plan for increased competition in the meat industry on Monday, including “across the board” enforcement of antitrust laws and support of legislation to inject transparency into cattle pricing. During a virtual meeting with farmers and ranchers, Biden said meatpacking, dominated by a handful of big processors, was a textbook example of the perils of corporate consolidation.
The Justice Department and the USDA said they would prioritize competition in agriculture and would create a central site on the internet for producers to submit complaints about unfair treatment; “a one-stop shop,” said Attorney General Merrick Garland,”to report complaints of potential violations of our competition laws,” including antitrust laws.
“I’m pleased to see Congress is taking action as well to increase competition,” said Biden, pointing to a bipartisan Senate bill to create a cattle-contract library and require packers to buy a portion of their slaughter cattle on the cash market. “And I’ll be inviting the bipartisan group to come together and make progress legislatively. . .even as we continue doing everything we can on the executive branch side.” It was the first time Biden commented on the bill.
The two other elements of the administration’s “action plan” were previously-announced initiatives to spend $1 billion to increase the number of independent processors and to toughen USDA’s fair-play rules governing meatpackers.
The cattle-contract library was the only market reform to gain traction in Congress in 2021. The House passed a bill to create a cattle-contract library, HR 5609, on Dec 8. The bill would make public the terms of contracts that packers offer to producers and it would require regular reports from USDA on the number of cattle committed to packers in the coming months. Backers say both of those provisions will help farmers and ranchers know if they are being offered a fair price and determine the best time to send stock to market. There already is a contract library for hog producers.
“Without meaningful competition, farmers and ranchers don’t get to choose who they sell to,” said the president. “These companies use their position as middlemen to over-charge grocery stores and ultimately families. . .And the big companies are making massive profits.”
A meat industry trade group dismissed the action plan as a gimmick. “For the third time in six months, President Joe Biden and his administration announced the same plans to spend $1 billion to fund government intervention in the market in an attempt to increase prices livestock producers receive while blaming inflation on private industry,” said Julie Anna Potts, chief executive of the North American Meat Institute.
Farm and ranch groups applauded the package. “We must get to the bottom of why farmers and ranchers continue to receive low payments while families across America endure rising meat prices,” said Zippy Duvall, president of the largest US farm group, the American Farm Bureau Federation. The National Sustainable Agriculture Coalition, a small-farm advocate, called for “serious reform to restore fairness, transparency and competition in agriculture.”
Scott Blubaugh, president of the Oklahoma Farmers Union, said farmers and rural communities would benefit if there were more processing plants throughout the countryside, rather than one or two packers who set market prices for a region.
“For too long, we have seen the multinational meatpackers suck out all of the wealth of rural America and put it in their corporate coffers, and in some cases, even overseas,” said Blubaugh, who took part in the virtual meeting with Biden.
Austin Frerick, a critic of the meat industry, said the Biden plan “is a good first step.” But he said it doesn’t go far enough because it would not dismantle the advantages held by big meatpackers. “When has throwing a billion dollars of taxpayer dollars ever de-concentrated an industry?” Frerick said structural remedies were needed, such as a ban on packer ownership of livestock or a prohibition on big packers being active in more than one line of protein.
To read the White House fact sheet on the action plan, click here.