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BIDEN ADMINISTRATION ANNOUNCES PLAN FOR A FAIRER, MORE COMPETITIVE, MORE RESILIENT MEAT AND POULTRY SUPPLY CHAIN
Jan. 4, 2022
Source: The White House news release
In July, President Biden signed an Executive Order on Promoting Competition in the American Economy to create a fairer, more resilient, and more dynamic economy. Over the last few decades, we've seen too many industries become dominated by a handful of large companies that control most of the business and most of the opportunities-raising prices and decreasing options for American families, while also squeezing out small businesses and entrepreneurs.
The meat and poultry processing sector is a textbook example, with lack of competition hurting consumers, producers, and our economy.
Four large meat-packing companies control 85 percent of the beef market. In poultry, the top four processing firms control 54 percent of the market. And in pork, the top four processing firms control about 70 percent of the market. The meatpackers and processors buy from farmers and sell to retailers like grocery stores, making them a key bottleneck in the food supply chain.
When dominant middlemen control so much of the supply chain, they can increase their own profits at the expense of both farmers-who make less-and consumers-who pay more. Most 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.
Even as farmers' share of profits have dwindled, American consumers are paying more-with meat and poultry prices now the single largest contributor to the rising cost of food people consume at home.
To view the complete report, click here.
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