Meat Industry Consolidation Creates Expensive BBQ

Jack Payne, Opinion Contributor

Consumers will pay 17% more — or about $10 — for their July 4 meals this year, according to a basket survey by the American Farm Bureau Federation.

The biggest year-over-year price increase is for ground beef that Americans will use to shape their burger patties. The survey found that the retail price of two pounds of ground beef is currently at a staggering $11.12, up 36% from last year.

Ongoing supply chain disruptions, the war in Ukraine and inflation were all cited in the survey as drivers of rising costs, but there’s another factor to consider: business consolidation. .

Today, the “big four” meatpacking companies – Tyson, JBS, Cargill and National Beef Packing – control about 85% of the slaughter of steers and heifers in the United States, more than twice the market share that prompted Congress to pass antitrust legislation in 1921. A White House memo released in December 2021 said these companies had enjoyed increases in net margins of more than 300% since before the pandemic . This excess cash has allowed them to announce more than $1 billion in new dividends and share buybacks, in addition to the more than $3 billion they have paid out to shareholders over the past two years.

As multinational meat companies marinate in their record revenues, Americans are burning out. In an oligopoly like the one we know today, companies have little incentive to compete for consumer market share or the livestock they need for their finished product. This means that producers are paid less and consumers have to pay more, while corporate shareholders reap the benefits.

On the first business day of 2022, President Joe Biden announced his administration’s action plan for a fairer, more competitive, and more resilient meat and poultry supply chain.. He outlined four basic strategies for creating an industry that offers “better incomes for producers and more choice and affordable prices for consumers”.

One such strategy is to work to increase transparency and true price discovery in the livestock market. Two bills currently before the House and Senate seek to achieve this goal: the Meat and Poultry Special Investigators Act of 2022 and the Livestock Price Discovery and Transparency Act of 2022.

Led by Chair Debbie Stabenow (D-Mich.), the Senate Agriculture Committee recently advanced both bills nearly unanimously with bipartisan support. They are now awaiting the approval of the entire Senate.

Let’s be clear. Producer-run organizations – like the U.S. Cattlemen’s Association and the National Farmers Union, as well as state breeders’ groups like the Iowa Cattlemen’s Association, Nebraska Cattlemen, Independent Cattlemen’s Association of Texas, and others – support these bills. Groups allied to packagers — like the North American Meat Institute and others — oppose these bills.

On this Independence Day, let’s turn up the heat on corporate consolidation. It is time to pass the Meat and Poultry Special Investigators Act and the Livestock Price Discovery and Transparency Act.

Jack Payne is currently Regional Director for California and Nevada with the US Cattlemen’s Association. He owns and operates Nevada Livestock Marketing in Fallon, Nevada.

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