WASHINGTON, DC – Following empty meat cases early on in the pandemic and supply chain issues that continue yet today, it didn’t take long for the Biden administration to turn its attentions to the nation’s food supply, specifically meat.
That led to President Biden issuing an executive order in June 2021 to address anticompetitive practices and more, with new rules to protect ranchers and farmers from corporate abuse.
Now, amid soaring meat prices in grocery stores, an update on the progress made since the executive order was issued – along with future plans – will be given by President Biden, US Attorney General Merrick Garland and US Secretary of Agriculture Tom Vilsack Mon.
The White House announced that the trio will meet virtually with “family and independent farmers and ranchers” on Monday, Jan. 3 as the administration will roll out a plan to “boost competition and reduce prices in the meat-processing industry.”
They will announce what they are calling “the Biden-Harris Administration’s Action Plan for a Fairer, More Competitive, and More Resilient Meat and Poultry Supply Chain.”
The plan rolls out a variety of meatpacking processing initiatives at USDA, plans to tighten up enforcement of the Packers and Stockyards Act, and a strategy by USDA and the Department of Justice to “better coordinate” antitrust efforts as well.
The White House cited that the meat and poultry processing sector “is a textbook example” of corporate consolidation that is “hurting consumers, producers and our economy.” The White House cited that the four largest packers control 85% of the beef market and 54% of the poultry processing. In pork, it’s about 70% of the market.
The White House will highlight $1 billion from the American Rescue Plan to expand packing capacity for independent meat processors. Vilsack had announced as far back as July that USDA would be providing up to $500 million in loans and grants to independent packers, but those funds have not been released.
Along with that, the Biden-Harris administration will also highlight plans to tighten the Packers and Stockyards Act, revisiting rules that USDA has been trying to finalize since the late days of the Obama administration. USDA has three proposed rules to tighten enforcement of the Packers and Stockyards Act meant to provide producers with more leverage and the ability to sue for unfair competitive practices by packers.
USDA and DOJ also will create a portal to report concerns about violations of antitrust laws that will allow them to better understand farmers’ and ranchers’ concerns, the White House stated. Along with that, the White House will work with Congress to create more transparency in cattle markets.
The White House endorsed legislation by Sens. Chuck Grassley, R-Iowa, Deb Fischer, R-Neb., Jon Tester, D-Mont., and Ron Wyden, D-Ore., that would require a set level of negotiated cash trade in cattle markets based on regions in the country. That legislation has been divisive in the Senate and in the cattle industry despite multiple hearings last summer over the state of cattle markets.
USDA will also issue new “Product of USA” labeling rules to help consumers better understand where their meat comes from. Under current rules, meat can be labeled “Product of USA” if it was processed here — meaning livestock raised outside the U.S. can be labeled Product of USA if the animal or meat is further processed in the U.S. The White House stated, “We believe this could make it hard for American consumers to know what they are getting. USDA has already begun its top-to-bottom review of the current labeling rules and consumers’ understanding of the labels, with the goal of new rulemaking to clarify ‘Product of USA’ standards.”
Regarding processing funds, the White House detailed that USDA will release plans for at least $375 million of those funds today. USDA will open up a request for proposals for approximately $150 million to “jump-start” at least 15 processing projects and release those funds this spring. Another $225 million will be rolled out in phase II this coming summer, the White House stated.
Also to help independent packers, USDA will release another $275 million in loan guarantees with lenders as well to provide “long-term affordable capital” with those funds expected to be released by the summer as well.
USDA will also dedicate another $100 million to support the expansion of the work force for packers as well “to support development of a well-trained workforce, safe workplaces, and good-paying, quality jobs by working closely with partner organizations, including labor unions, with expertise in workforce development and worker health and safety.”
Another $100 million will go to reduce overtime inspection costs for small and “very small” processing plants to keep up with demand. Those funds had also been provided by Congress to help small processors ship meat across state lines with federal inspection approval. USDA had already issued $32 million in grants to 167 meat and poultry processing facilities for them to become certified for federal inspections.
Another $50 million will go to helping expand technical assistance for environmental and food-safety issues to help independent businesses expand processing capacity as well.
“The meatpackers buy from farmers and sell to retailers like grocery stores, making them a key bottleneck in the food supply chain.”
The White House added, “Most ranchers and farmers now have little or no choice of buyer for their product and little leverage to negotiate, causing their share of every dollar spent on food to decline. Fifty years ago, ranchers got over 60 cents of every dollar a consumer spent on beef, compared to about 39 cents today. Similarly, hog farmers got 40 to 60 cents on each dollar spent 50 years ago, down to about 19 cents today.”
