Biden pledges $ 1 billion in bailout funds to small independent meat processors
President Biden virtually met with independent farmers on January 3 alongside Agriculture Secretary Vilsack and Attorney General Garland to discuss what he called a stifling consolidation in the U.S. meat industry and to announce news measures to counter it. In order to stimulate competition, Biden and Secretary Vilsack said the Biden administration would wipe out $ 1 billion in spending from the Covid relief bill passed last year for grants and loans for independent small businesses. packaging of meat.
The funds, according to Agriculture Secretary Vilsack, will include $ 800 million in grants and loans for small independent meat processing companies, $ 100 million in loans to help tackle the challenges of the food chain. supply industry and $ 100 million to help reduce the cost of inspections for smaller meat-packing facilities.
Loan guarantees for supply chain expansion, said Vilsack, would go to industry-specific solutions like cold storage and potentially cost ten times his initial investment: “We think that $ 100 million dollars will mobilize nearly a billion dollars of investment, ”he said.
In his own remarks, Biden focused on the effect of the consolidation on prices, saying that 50 years ago ranchers received 60 cents for every dollar a consumer spent on meat, whereas today hui that figure fell to 59 cents, and noting that the price of a pound of beef jumped during the pandemic.
According to the Associated Press, meat prices have climbed 16% year-over-year and beef prices have risen more than 20% over the same period.
“Without real competition, farmers and ranchers can’t choose who they sell to. In other words, our farmers and ranchers have to pay what these four companies say they have to pay, overall,” said Biden, who has added that meat producers can also use their leverage to “overload grocery stores and ultimately families.”
Without naming names, the White House noted on Monday that the top four beef processors in the United States collectively control 85% of its beef production, while the top four pork and poultry processors control 70% of its beef production. % and 54% of their respective markets. .
This is consistent with USDA data from 2021, which shows Cargill US, Tyson Foods Inc., JBS SA, and National Beef Tracking Co. slaughtered 85% of grain-fed cattle in the United States for consumer products. .
In its response, the National American Meat Institute insisted that the latest announced measures were wrong and would harm rather than help meat producers and consumers. In a statement, NAMI CEO Julie Anna Potts accused the Biden administration of “refusing to engage” with meat packers and of noting that today’s roundtable did not include any industry representatives.
“Press conferences and the use of taxpayer dollars to establish government-sponsored packaging and processing plants will do nothing to address labor shortages in meat and poultry factories and to increase inflation in the economy, ”Potts said. She went on to note that producers are currently seeing an upward trend in livestock prices as members of the industry deal with a backlog caused by the COVID disruptions.
As the White House views the consolidation of meat packers as a responsibility for supply chains, Mark Dopp, a vice president of NAMI, said last year that “the ultimate black swan event” of COVID does not indicate that the system as it exists needs to be dismantled and that the consolidation of meat packaging is not new.
In a letter to the USDA submitted in June 2021, Dopp noted that the share of the four companies of slaughtered cattle had changed little in about a quarter of a century and claimed that the effectiveness of the existing model allows meat packing companies. to pass savings on to consumers, resulting in cheaper food as a percentage of personal income for US consumers. Instead of funding smaller meat-packing companies or developing additional capacity, Dopp said, the USDA should instead focus on a more uniform pandemic response plan and reducing labor shortages. ‘work.
NAMI submitted the comments last year in response to USDA’s request for comment on the measures, which was released in April 2021 after President Biden signed an executive order in February on anti-competitive practices. The Jan. 3 announcement itself builds on an executive order signed in July last year that ordered the USDA to tightly enforce price fairness laws through its Packers & Stockyards division. .