Administration hopes funds will bring down meat prices
Taking on the rise in meat prices, which are up 16% from last year, the Biden administration is allocating $1 billion from the American Rescue Plan to independent beef, pork, and poultry producers to help them compete against large conglomerates.
“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 White House said.
Four companies account for 85% of beef sold in the U.S., and the figure is 70% in pork, while the top four chicken producers cover 54% of that market, according to statistics released by the White House. Inflation because of demand and supply chain issues is a real problem, but the administration has accused the large producers of exploiting the situation to artificially raise meat prices higher.
The $1 billion includes $375 million for independent processing plants, $275 million to strengthen financial systems for independent processors, $100 million for workforce development, $100 million in reduced overtime inspection costs, and $50 million for research & development and technical assistance. There is also $100 million in backing for private lenders that invest in independently owned food processing and distribution infrastructure.
New “Product of USA” labeling rules could change which products qualify for such a label. Under current USDA guidelines, meats grown in other countries but processed into cuts in the U.S. qualify. The administration and USDA are also working on stronger rules under the Packers and Stockyards Act to combat abuses by large meatpackers and processors.
Grocery prices have been an area where consumers have noticed the impact of pandemic-era inflation the most, and a reduction in meat prices could make a real difference in household budgets in addition to making small businesses more competitive.