President Biden recently supported an initiative providing $1 billion to independent meat processors through the American Rescue Plan in an effort to combat a perceived lack of competition in the meatpacking industry leading to price increases.
The White House is concerned about rising meat prices as it tries to temper inflation brought on by the COVID-19 pandemic, according to a Reuters report. The top four meatpackers in the U.S. have seen a 120% jump in profits since the pandemic began, according to an analysis by the White House economic council.
“Capitalism without competition isn’t capitalism,” Biden said, as reported by Reuters. “It’s exploitation. That’s what we’re seeing in meat and poultry industries now.”
The plan, to be administered by the U.S. Department of Agriculture, will assist independent meat processors by way of increasing processing capacity, improving financing options and providing additional resources for employers to train and pay employees in line with their skills, a fact sheet released by the White House said.
“Anticompetitive practices in agriculture, as in any industry, hurt the American people – producers, consumers and workers alike,” U.S. Attorney General Merrick Garland said in a statement released Jan. 3. “And they hurt the American economy. Too many industries have become too consolidated over time. Too many companies have pursued corporate conduct and more aggressive mergers that have made all of us vulnerable. Against this background, our antitrust efforts cannot and will not slow down."
The Biden administration has blamed soaring meat prices on an industry that has operated without enough competitive pressure, The Sacramento Bee reported. Opponents argue the price shift was due to other issues including more people eating at home during the pandemic rather than restaurants.
“Prices are high because of increased consumer demand,” Sarah Little, spokeswoman for the North American Meat Institute told The Sacramento Bee. “When the demand curve shifts like that, prices go up.”
