More competition will reduce meat prices in fight against inflation, says Biden
Acknowledging “we need to get inflation under control” as part of the economic recovery from the pandemic, President Biden said on Wednesday that the administration will inject competition into the highly consolidated meat industry to bring down prices at the grocery store. Meat prices soared by 14.8% during 2021, part of overall food inflation of 6.3%.
“Like I said, you have a circumstance where people are paying more for a pound of hamburger meat than they’ve ever paid,” said Biden during a news conference at the White House. “One of the reasons for that is … you’ve got the big four [processors] controlling it all.”
Biden announced a four-point plan early this month to boost competition in the meat industry, including up to $1 billion in loans and grants to increase the number of independent processors; across-the-board enforcement of antitrust laws; giving producers more leverage through tougher USDA fair-play rules to deal with processors; and encouraging cattle-market reforms by Congress. The president also signed an executive order in 2021 that directed federal agencies to support competition.
“You’re going to see, more and more, we’re going to move on this competition piece, to allow more and more smaller operations to come in and be able to engage buying and providing access to much cheaper meat than exists now,” Biden said at the press conference. “But it’s going to be a haul.”
The Justice Department and the Federal Trade Commission launched a joint public inquiry on Wednesday aimed at strengthening their enforcement tools against mergers that would reduce competition. They set a March 22 deadline for comments on how to review proposed mergers, such as whether to change how it’s determined that a merger would result in too little competition.
“Our country depends on competition to drive progress, innovation, and prosperity,” said Assistant Attorney General Jonathan Kanter. “We need to understand why so many industries have too few competitors, and to think carefully about how to ensure our merger enforcement tools are fit for purpose in the modern economy.”
Farm activists called for a moratorium on food and agribusiness mergers during testimony before a House Judiciary subcommittee on Wednesday. “Longer-term solutions will also require updating our antitrust laws for agriculture, food, and retail,” said Joe Maxwell, president of the group Farm Action. Trina McClendon, a poultry farmer in Mississippi, joined Maxwell in calling for a moratorium on mergers and stronger enforcement of antitrust law.
Allison Johnson of the Natural Resources Defense Council, an environmental group, said antitrust laws should be amended “to more clearly target unfair practices that result in environmental and health harms and include more opportunity for public participation and citizen lawsuits.”
Economists from the Heritage Foundation and the International Center for Law and Economics said at the hearing that other factors, such as supply chain disruptions or surging consumer demand, were responsible for inflation. “The purpose of antitrust law is to protect competition rather than to guarantee low prices in and of themselves,” said Geoffrey Manne of the ICLE.
To watch a C-SPAN video of Biden’s news conference, click here.
To watch a video of the House hearing or to read the statements of witnesses, click here.