US pledges $500 million to increase meat processing capacity

The US government is investing at least $500 million to expand processing capacity for beef, pork and poultry, Agriculture Secretary Tom Vilsack said Friday after consumers faced restrictions on meat purchases during the COVID-19 pandemic last year.

Money from the $1.9 trillion pandemic response package approved in March will be made available to meat processors in the form of grants and loans to make the supply chain more resilient and increase competition in the sector, according to a Reuters report, Vilsack said at a press conference. conferences in Council Bluffs, Iowa.

President Joe Biden signed a sweeping executive order that pushes the USDA to crack down on "abuse by certain meat processors" and increase competition in the US economy.

Cattle ranchers say there are too few processing companies that buy livestock to process into beef, forcing farmers to accept fixed prices for the animals.

Ranchers are now selling livestock at a loss, although meat companies make a profit by selling beef to consumers, Vilsack said. “I think, frankly, profits should go both ways,” he added.

The meat processing sector has come under increased scrutiny after slaughterhouses temporarily closed during the COVID-19 pandemic as workers fell ill.

When large meatpacking plants close, meat supplies dwindle and ranchers get stuck with cattle that would otherwise be slaughtered. This means that the price of cattle usually falls, while the price of meat in supermarkets rises.

The cyberattack on the North American division of Brazilian meat processor JBS SA, which shut down US beef facilities last month, has highlighted concerns about the situation in the meat processing sector.

Biden's order directs the USDA to consider new rules to make it easier for farmers to file and win lawsuits against large processors.

In June, the USDA said it would adhere to three rules to strengthen enforcement of the Meat Processing and Stockyards Act, passed 100 years ago to protect farmers from unfair trading practices.

The North American Meat Institute, which represents meat companies, said on Friday that Biden's order would "open the floodgates for litigation."

“Government intervention in the market will increase the cost of food for consumers at a time when many are still suffering from the economic impact of the pandemic,” said Julie Anna Potts, president of the Meat Institute.

And this fact will be taken into account when preparing the monthly analytical report Meatinfo.ru