Why Are Beef and Pork Prices Lower
Packages of beefiness cuts are displayed at a Costco shop on May 24 in Novato, Calif. The prices of meats take surged, and the White House is partly blaming the handful of meatpackers that control the manufacture. Justin Sullivan/Getty Images hibernate caption
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Justin Sullivan/Getty Images
Packages of beefiness cuts are displayed at a Costco shop on May 24 in Novato, Calif. The prices of meats have surged, and the White House is partly blaming the handful of meatpackers that command the industry.
Justin Sullivan/Getty Images
Prices for beef, pork and craven have surged during the pandemic, and the Biden administration believes it knows who's partly behind it: a handful of big meatpacking companies that control about of the country's supply.
Beefiness prices alone jumped 12.2% over the last year, according to new consumer aggrandizement information on Tuesday, making information technology one of the costliest items in the surging bills that consumers face today at the grocery store.
"It's but outrageous. I tin't fifty-fifty understand how people are supposed to exist able to pay that kind of coin for bones stuff like ground beef," says Adam Jones, who raises Angus cattle in northwest Kansas. "We're non talking about filet mignon. We're just talking about being able to make spaghetti or beingness able to make tacos."
The surge in meat prices is contributing to loftier inflation. The Labor Section reported Tuesday that consumer price alphabetize rose 5.3% in the 12 months ending in August. That's down slightly from June and July when inflation was running at v.4% — but it'due south notwithstanding most the highest level in nearly thirteen years. Pork prices jumped 9.eight% in the final year while chicken prices jumped vii.2%.
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The White House is responding by shining a spotlight on "Big Meat," equally function of a larger campaign confronting what the Biden administration calls "anti-competitive" behavior by big business — fifty-fifty as meatpackers insist they are not to blame.
More than 80% of the beef in the U.S. is slaughtered and processed by but four big companies, including Tyson Foods and JBS United states. A like scattering of companies also controls processing of more than half the craven in the state and two-thirds of the pork.
That ways farmers and ranchers have few choices of where to sell their livestock.
Jones calls himself a conservative Republican. Merely he welcomes the administration's push to bring more contest to the highly consolidated meatpacking industry.
"There has been merger later merger," Jones said. "It'south really gotten to the point where there's no competition in our industry at all."
The administration says manufacture giants like Tyson and Smithfield accept such a stranglehold on processing operations that they tin command higher prices at the supermarket, while also putting the squeeze on farmers, who in some cases tin't fifty-fifty comprehend their costs.
"Farmers are losing money on cattle, hogs and poultry that they're selling at a fourth dimension when consumers are seeing higher prices at the grocery store," Agronomics Secretarial assistant Tom Vilsack said terminal week. "And at that place are now record profits or near-record profits for those in the eye.
"I retrieve talking to a producer the other solar day in Quango Bluffs [Iowa], and he said, 'I don't get this. I but sold my cattle and lost $150 a head. But the processor made $i,800 a caput. How can that exist?' " Vilsack said.
Agriculture Secretary Tom Vilsack speaks on ascension food prices at a press conference at the White House on Sept. eight. The Biden administration is taking steps to effort to bring more suppliers to the meatpacking manufacture. Kevin Dietsch/Getty Images hide caption
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Kevin Dietsch/Getty Images
Agronomics Secretary Tom Vilsack speaks on rising food prices at a press conference at the White Firm on Sept. 8. The Biden assistants is taking steps to try to bring more suppliers to the meatpacking industry.
Kevin Dietsch/Getty Images
The White Business firm wants to open the Big Meat manufacture
The administration is setting bated $500 million to help bankroll new meat processors to compete with the big four.
The Justice Section is also investigating alleged toll-fixing in the craven marketplace. The No. 2 chicken processor, Pilgrim's Pride, pleaded guilty this year to conspiring with others to limit product and keep chicken prices artificially high.
But meatpackers decline the idea that industry consolidation is hurting ranchers or consumers.
"The present spread between alive cattle and beefiness prices has everything to do with the law of supply and demand," says Shane Miller, grouping president for fresh meats at Tyson, the nation's largest beef and chicken processor.
Miller told a Senate committee this summer that the pandemic and other shocks have forced processors to slow down their slaughtering operations, so there are fewer cattle coming in and fewer steaks going out.
"This led to an oversupply of live cattle and an undersupply of beef, all while demand for beef products is at an all-time high," Miller said. "So it should not surprise whatsoever of u.s.a. that as a result, the cost for cattle fell while the cost for beef rose."
A customer shops for meat at a supermarket in Chicago on June x. A surge in meat prices is contributing to higher inflation, raising the Biden assistants'south concern. Scott Olson/Getty Images hide caption
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Scott Olson/Getty Images
A customer shops for meat at a supermarket in Chicago on June 10. A surge in meat prices is contributing to higher inflation, raising the Biden administration'south business organization.
Scott Olson/Getty Images
Ending sticker shock at the butcher counter
The meatpacking companies argue that in normal times, their giant size makes them more efficient and helps keep prices for consumers low.
In recent decades, that "consumer welfare" statement carried a lot of weight. Government regulators were willing to go along with 1 merger afterward some other, so long as hamburger was cheap.
Just a new generation of antitrust scholars — and the Biden administration — are more than skeptical of supersized corporate ability.
"Between these contempo price shocks in the pandemic and ongoing allegations of price-fixing, that [consumer welfare] argument for consolidation is falling apart," said Claire Kelloway, a researcher at the Open Markets Institute, an anti-monopoly remember tank. "There'southward increasing evidence and suspicions that this market power has gone too far and is beginning to hurt consumers."
A ransomware attack on JBS in June that temporarily idled nearly a quarter of the company'due south beefiness-processing chapters also highlighted the take a chance of having so much of the nation'southward food supply in the hands of a few big companies.
Almost exactly a century ago, the federal regime passed the Packers and Stockyards Human action to cleft down on excesses of what was so known equally the "Meat Trust."
The Biden administration is promising beefed-up enforcement of that 1921 law. And it may observe fresh support from shoppers facing sticker shock at the butcher counter.
Source: https://www.npr.org/2021/09/14/1036678722/chicken-beef-pork-meat-prices-inflation-biden
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