White House Unveils $1B Plan to Boost Meat Processing Competition and Lower Prices for Consumers
The White House announced its “Action Plan for a Fairer, More Competitive, and More Resilient Meat and Poultry Supply Chain,” a $1 billion investment of American Rescue Plan Funds to finance and support independent processing projects “that will give farmers and ranchers more and better options.”
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The plan aims to lower meat prices for consumers and boost competition, according to a statement.
“Capitalism without competition isn’t capitalism; it’s exploitation,” President Joe Biden said on Monday, Jan. 3, at a virtual meeting with family and independent farmers and ranchers, according to the transcript of his remarks. “That’s what we’re seeing in meat and poultry — in those industries — now. Small, independent farmers and ranchers are being driven out of business — sometimes businesses that have been around for generations. It strikes at their dignity, their respect, and the family legacies so many of them carry for generations after generation.”
Biden added that four big corporations control more than half the markets in beef, pork and poultry and that without meaningful competition, farmers and ranchers don’t get to choose who they sell to, according to the transcript.
These four large meat-packing companies control 85% of the beef market. In poultry, the top four processing firms control 54% of the market. And in pork, the top four processing firms control about 70% 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, according to the plan’s fact sheet.
“Or put another way, our farmers and ranchers have to pay whatever these four big companies say they have to pay, by and large. But that’s only half of it. These companies can use their position as middlemen to overcharge grocery stores and, ultimately, families,” Biden added.
Meat and poultry prices are now the single largest contributor to the rising cost of food people consume at home. Indeed, the November Consumer Price Index data, released Dec. 10, shows that meat prices are still the single largest contributor to the rising cost of food people consume at home. Beef, pork, and poultry price increases make up a quarter of the overall increase in food-at-home prices last month, according to the plan’s fact sheet.
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According to the fact sheet, some of the steps the administration will take include increasing competition and creating more options for producers and consumers in the near term by jump-starting independent processing projects that will increase competition and enhance the resiliency of the food supply chain, for which the U.S. Department of Agriculture (USDA) will provide gap financing grants totaling up to $375 million; $150 million to jump-start 15 projects, focused on deploying financial support for projects with the greatest near-term impact, as well as an additional $225 million to support additional projects in Summer 2022; to $275 million to strengthen the financing systems for independent processors; and $100 million in reduced overtime inspection costs to help small and very small processing plants keep up with unprecedented demand.
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This article originally appeared on GOBankingRates.com: White House Unveils $1B Plan to Boost Meat Processing Competition and Lower Prices for Consumers
