President Biden prepares meat price controls

MEAT prices in the US could come under tighter controls dictated by Washington. According to the current administration, four companies monopolistically control the market, which has led to unjustified price increases that harm the consumer.

Brian Deese, DIRECTOR of the National Economic Council, and deputy directors of the same body Samira Fazili (Department of Production, Innovation and National Competition) and Bharat Ramamurthy (Department of Consumer Protection) issued a manifesto in which they explained that four large companies control most of the market of three specific products: beef, pork and poultry. In particular, we are talking about:

- Cargill Meat Solutions, Minnesota.

- Tyson Foods of Springdale, Arkansas.

- JBS based in Brazil.

- National Beef Packing, controlled by the Brazilian manufacturer Marfrig Global Foods.

The four companies raised prices during the pandemic, generating record profits, Biden advisers said. In fact, they say that meat, or more accurately, the speculation these companies had with it, was the source of half the increase in the cost of the American food basket.

 Washington intends to take strong action to combat illegal pricing, enforce antitrust laws, and promote greater transparency in the meat processing industry.

The USDA is pursuing an ongoing joint investigation with the Department of Justice into pricing in the chicken processing industry, which has already resulted in a guilty plea to Pilgrim's Pride.  

The USDA also announced increased enforcement policies to prevent meat processors from using their market dominance to abuse farmers and ranchers.

The USDA is providing more transparency by releasing new market reports on how much meat processors are paying.

New rules will be introduced to ensure consumers get what they pay for when meat says "Product USA".

The authorities also intend to help small businesses and workers affected by covid-19 and create a more competitive food supply chain.

The USDA is investing $1.4 billion in pandemic relief to help small scale producers, processors, distributors, farmers' markets, seafood processors, and agricultural and food workers impacted by COVID-19.

The USDA is also investing $500 million in American Rescue Plan Act funds to support new entrants to expand local and regional meat and poultry processing capacity.

USDA will provide grants, loans, and technical assistance to build new meat and poultry processing facilities that will compete with big companies to cut prices and give farmers and ranchers access to better options and fairer prices in local and regional food systems.

Meat processors have enormous price-setting power, often set in opaque contracts that force independent livestock producers to sell their product at prices that are not the product of free and fair negotiation. The administration will work on legislation that will improve prices in livestock markets and facilitate real price negotiations between livestock producers and processors.