Wednesday, January 19, 2022

Biden targets US meat firms in effort to tame surging prices

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On Monday, the Biden administration announced a plan to increase competition in the meat industry and mitigate rising food prices amid rising inflation.

The White House said the plan includes $ 1 billion to expand processing capacity for meat processing firms independent of the American Recovery Plan.

This amount includes $ 275 million for capital support for independent firms and $ 100 million for job development and training.

The initiative is President Biden’s latest move to ease pressure on Americans as inflation has reached its highest level in decades. Biden and senior administration officials said the big companies have stifled competition, boosted inflation and caused high costs for daily necessities such as meat and gas.

Under the White House plan, the Department of Justice and the Department of Agriculture will begin joint efforts to coordinate anti-competitive actions.

President Biden noted that large companies have stifled competition, boosted inflation and raised the prices of daily commodities such as meat and gas.

The Biden administration will also strengthen, among other steps, the rules governing “US-made” meat labels.

“Even though farmers’ profits are declining, American consumers are paying more – the price of meat and poultry is the biggest contributor to the rise in the price of food people consume at home.” , says a fact sheet detailing the White House plan. .

“And when so much of the market is controlled by so few companies, our food supply chains are prone to shocks,” officials added.

The U.S. consumer price index in November 2021 rose 6.8 percent from the same month a year earlier.

Administration officials said the plan will help alleviate ongoing supply chain problems and ease financial pressures for consumers and competitors. The White House said the four largest meat producers control 85 percent of the beef market, 70 percent of the pork market and 54 percent of the poultry market.

The White House said excessive control over the market would lead to “a major hurdle in the food supply chain.”

President Biden and other senior administration officials will discuss the plan with a group of farmers and independent meat processors during a virtual event on Monday.

The White House has announced a plan that the Department of Justice and the Department of Agriculture have launched a joint effort to coordinate efforts to combat competition.
The White House has announced a plan that the Department of Justice and the Department of Agriculture have launched a joint effort to coordinate efforts to combat competition.

The U.S. consumer price index rose 6.8 percent in November 2021 compared to the same month a year earlier. The increase was the 12-month high since 1982.

According to the Department of Labor, beef prices in November were up 21 percent from a year earlier.

In December, White House spokeswoman Jen Psaki said the rise in prices was due to “the greed of meat conglomerates.”

However, some critics have pushed back elements of the president’s anti-inflation strategy. Last month, former Treasury Secretary Larry Summers warned that the fight against monopolies could lead to worsening rather than improving inflation.

“The claim that antitrust can fight inflation” reflects the denial of science Summers wrote on Twitter at the time. “There are many areas where serious economists differ, such as transient inflation,” he said. Antitrust is not one of them as an anti-inflation strategy. ”

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