Price hike ‘smacks of pandemic profiteering’
The Biden administration has beef with the country’s big four meat producers. As inflation drives the cost of goods, especially food, higher in a recovering economy, the White House said Wednesday that the large companies that dominate beef, poultry, and pork sales have taken advantage of a lack of competition to raise prices and enjoy record profits.
“That’s why the Biden-Harris Administration is taking bold action to enforce the antitrust laws, boost competition in meat-processing, and push back on pandemic profiteering that is hurting consumers, farmers, and ranchers across the country,” a blog post by top Biden advisers on the White House website reads.
To that end, the administration is giving $1.4 billion in pandemic assistance to small meat producers, processors, and distributors as well as farmers markets and food and farm workers through the USDA.
The rise in beef, pork, and poultry prices accounts for more than half of price increases in non-restaurant food since December as other staples have seen price drops, an indication that rising consumer demand is not the only factor in the high cost of meat.
“Issuing inflammatory statements that ignore the fundamentals of how supply and demand affects markets accomplishes nothing,” said Mark Dopp, chief operating officer for the North American Meat Institute, which represents meatpackers including Cargill, Tyson, JBS, and National Beef Packing Co. “American consumers of most goods and services are seeing higher costs, largely due to a persistent and widespread labor shortage. The meat and poultry industry is no different.”
The top four companies in each sector control 54% of the U.S. poultry market, 66% of the pork market, and 82% of the beef market, the White House said. Poultry prices were 5.3% higher in July compared to a year earlier, pork 7.8% higher, and beef up 6.5%, according to the Consumer Price Index.
“We’ve helped sustain this market, and it’s frustrating to see these companies turn around and raise prices,” Bharat Ramamurti, a co-author of the blog post and the deputy director of the White House’s National Economic Council, told Reuters. “What we see here smacks of pandemic profiteering and that is the behavior the administration finds concerning.”