“Many of the meat-industry problems the Biden administration identifies as in need of fixing are very real. For example, the administration says meat prices are through the roof. That’s true. The administration says the meatpacking industry is highly consolidated, with just four giant companies responsible for slaughtering and processing nearly 7 out of every 8 pounds of beef (and slightly lower amounts of pork and poultry) we eat every year. That’s true, too. (It was also largely true 20 years ago and 100 years ago.) The Biden administration has also argued large meatpackers have been busy “raising prices, underpaying farmers—and tripling their profit margins during the pandemic.” Also true.
The Biden administration believes meat prices are sky high due largely to this industry consolidation and lack of competition.”
“the real obstacle that’s preventing ranchers and farmers that utilize these facilities from supplying more meat to more Americans is an outdated federal law that props up the large processors while preventing local meat producers from selling steaks, roasts, and other cuts of meat to consumers in grocery stores, at farmers’ markets, and elsewhere in their communities.”
“farmers and ranchers who want to sell their meat commercially (or for it to be re-sold) in this country must have their livestock slaughtered in USDA-inspected (or state equivalent) slaughter facilities, where an inspector must be present and inspect every animal that’s slaughtered. In order to be sold commercially, meat from those same animals also must be processed (cut into steaks, ground up, cured, etc.) in a USDA-inspected processing facility. There’s a shortage of slaughter and processing facilities available to most small farmers and ranchers, and many plants are owned by a handful of large companies that don’t cater to those farmers and ranchers. As all this suggests, the current system poses a giant hurdle to many small farmers and ranchers.”
“As a fix, the Biden administration proposes, under a wordy header announced this week—the Biden-Harris Administration’s Action Plan for a Fairer, More Competitive, and More Resilient Meat and Poultry Supply Chain—to give $1 billion to smaller meat processors so that they can ramp up their production efforts, which would in theory provide farmers and ranchers with more choices for slaughter and processing. The plan also includes other elements, including “launching a new portal to allow farmers and ranchers to report unfair trade practices by meatpackers.””
“The USDA has been aware of many of the aforementioned problems with its meat-inspection scheme for decades. As I explain in my book, Biting the Hands that Feed Us: How Fewer, Smarter Laws Would Make Our Food System More Sustainable, when the agency commissioned a study 10 years ago to look at ways to streamline these regulations, the authors of the study concluded “that no one with the USDA or . . . working as professionals within the meat industry believe[s] that streamlining regulations will ever occur.”
Righteous pessimism hasn’t stopped people who care about small farmers and the livestock they raise from trying to come up with various fixes. The PRIME Act, a tremendous bill that has repeatedly failed to pass Congress, would, I explained in a piece in the The Hill in 2018, “provide states with the option to regulate livestock slaughter and sale within their borders.” Local solutions exist, too, but the federal government largely ignores or seeks to undermine them. States such as Wyoming and Colorado that have sought to use federal law to foster more local competition have bumped up against threats from overzealous USDA bureaucrats.”
“The Biden administration, perhaps worried about the political toll that rising food prices could extract in next year’s midterms, announced plans earlier this month to offer up to $500 million in loan guarantees to beef producers. That’s on top of $500 million approved as part of the $1.9 trillion American Rescue Plan that was supposed to “expand processing capacity and increase competition in meat and poultry” industries, according to the U.S. Department of Agriculture.
The second prong of the White House’s plans seems to involve shaming meat-processing companies. “Just four large conglomerates control the majority of the market for each of these three products (beef, pork, and poultry), and the data show that these companies have been raising prices while generating record profits during the pandemic,” Brian Deese, director of the White House’s National Economic Council, said during a press briefing last Friday, the Detroit Free Press reports.
Taken together, the White House’s approach to high meat prices can be summarized as an argument for greater government subsidies based on the idea that stimulating more competition in the meat-packing industry will expand supply and reduce bottlenecks.
But, as David Frum details in The Atlantic today, there are some good reasons to be skeptical of this argument. For starters, it takes about $200 million (and several months, if not longer) to build a single new meat-processing plant. That means the Biden administration’s new loan programs will not purchase much additional capacity, and whatever gains are made will not happen immediately. Even if the plan is successful, smaller producers will likely need ongoing support beyond the initial loans—if there was a market for more, smaller meat processors, the private sector would be investing in them already.
“There’s a real risk,” writes Frum, “that the initial commitment of $500 million in aid and loan guarantees to small packers will expand into continuing intervention in the marketplace to keep smaller competitors in business in the face of the higher efficiency and lower prices of the big packers.””
“Offering $500 million in loan guarantees to anyone who wants to build a new meat-processing plant isn’t going to address the supply chain problems at the existing plants or end the Western drought.
Higher prices, while politically difficult for the Biden administration, will send signals up the supply chain that result in more workers being hired and more cows being raised.”
“whichever rules the Biden administration might impose, if they reduce worker density at meat plants that are already operating at capacity, then there simply won’t be room—or jobs—for all of the workers that currently staff these plants.
That’s because meatpacking plants are designed to maximize output while complying with existing rules. Changing the rules means changing the plants. That’s not easy.”
“Imagine a dog. She spends her entire life in an iron crate so small that she cannot turn around. Her tail has been cut off so that other dogs in cages jammed up against hers won’t chew it off in distress. When she has puppies, the males are castrated without painkillers. They are left close enough for her to nurse, but too far away for her to show them any affection.
Fortunately, this dog is a fictional creation. We have laws preventing people from treating pets this way.
Unfortunately, we are doing this to animals that are very similar to dogs. This is an all-too-real description of how we treat some of the millions and millions of pigs we raise for meat on factory farms.
So why do we treat the animals we eat in ways we would never, ever treat our pets?”
“The working conditions in meatpacking plants create a perfect storm for coronavirus transmission. Workers are unable to maintain the recommended 6 feet of distance on the processing floor, and they breathe heavily while hauling cuts of meat, possibly spreading virus particles in the cold air.
Companies that own these plants have sought to implement temperature checks and social distancing measures in common spaces outside the processing floor, as well as administer additional protective equipment. But it’s also possible that the virus is spreading outside the plants themselves, as low-wage, mostly immigrant workers live in crowded conditions and commute via public transit.
Consumers are seeing the effects at the grocery store and fast food restaurants. Meat and pork prices have jumped at least 3 percent. And while America isn’t at risk of running out of food generally, there have been spot shortages of meat such that some retailers, including Costco and Kroger, have started limiting the number of meat items that customers can purchase.”
“The phenomenon isn’t isolated to the US: There have been coronavirus outbreaks at meatpacking plants worldwide, including Canada, Spain, Ireland, Brazil, and Australia. Clearly, there is something inherent to the meatpacking industry that has made it a breeding ground for the coronavirus.”
“More than 3,000 meat processing workers across the country have tested positive for the virus in recent weeks, leading to additional spread in their communities, and more than 15 have died. Dozens of facilities have been forced to close temporarily or indefinitely.
Executives at America’s largest meat and poultry processing companies have warned of disastrous consequences for consumers should these facilities stay closed: Tyson Foods chair John Tyson said on Sunday that the “food supply chain is breaking.” Livestock prices have plunged because farmers have nowhere to send their animals for slaughter, while the price of consumer-ready meat has spiked.
While supply chain experts don’t anticipate a nationwide shortage of meat in light of the recent closures, they say there could be spot shortages at local grocery stores of certain types or cuts of meat.
But reopening the plants could come at great cost to their workers, who assert that their companies are doing too little to protect them from the virus. They say companies are failing to enforce social distancing on the production line and only recently beginning to offer additional protective equipment, if they do so at all.
Many employees also say they don’t have paid sick leave, health benefits, or substantial savings, offering them little assurance should they get infected and incentivizing them to work while sick.”
“Trump’s executive order instructs the Department of Agriculture to ensure that meat and poultry plants can continue operating uninterrupted as much as possible while abiding by guidance for Covid-19 preparedness issued by the Centers for Disease Control and Prevention and the Occupational Safety and Health Administration. The executive order leaves room for the agency to provide personal protective equipment to workers or issue additional regulations concerning worker safety — but it doesn’t explicitly provide any additional worker protections.”