Brief

Biden debuts $1 billion meatpacking competition plan

By: - January 4, 2022 10:19 am
Carcasses in a meat processing plant

Beef carcasses at a meat processing plant. (USDA photo by Preston Keres; public domain, via Flickr)

President Joe Biden unveiled plans Monday to allocate $1 billion in federal money to increasing competition in the meatpacking industry. 

“Without meaningful competition, farmers and ranchers don’t get to choose who they sell to,” Biden said. “Put another way, our farmers and ranchers have to pay whatever these four big companies say they have to pay.”

The top four companies in the pork, beef and poultry industries control more than half of their markets. Biden said the lack of competition allows those companies to drive up the prices of meat at the grocery store without paying more to farmers.

“This reflects the market being distorted by lack of competition… Capitalism without competition isn’t capitalism, it’s exploitation,” Biden said in a livestreamed address.

Biden’s initiative to increase competition has four components, he explained:

  • Investing $1 billion in new and expanded meat and poultry processing. The funding will come from the American Rescue Plan and is meant to give farmers more options than “giant processing conglomerates.” 
  • Strengthening federal rules to protect meat producers. Biden ordered the USDA to rewrite rules in the Packers and Stockyard Act, a 1921 law that regulates meatpackers. 
  • Enforcing existing competition laws “vigorously,” including launching a new program to make it easier for individuals to report violations of laws that restrict anti-competitive behavior.  
  • Making the industry more transparent by requiring additional reporting on meat prices.

Congress is also working to address competition in the industry. Iowa lawmakers have led an effort to increase price transparency between packers and producers. Sens. Chuck Grassley and Joni Ernst introduced the bill in the Senate, and all four of Iowa’s representatives introduced it in the House.

“I will continue to work with my colleagues from both sides of the aisle and the White House to pass the legislation to help level the playing field for family farmers,” Rep. Cindy Axne, a Democrat, said in a statement Monday.

Biden has led several initiatives in the past year to address meatpacking competition. 

In July, Biden ordered the Department of Agriculture to write new rules that would give farmers more power in pricing their livestock. He pointed toward meatpacking monopolies as the cause of increased meat prices in the U.S. 

“Four large meatpacking companies dominate over 80% of the beef market and, over the last five years, farmers’ share of the price of beef has dropped by more than a quarter — from 51.5% to 37.3% — while the price of beef has risen,” a July White House fact sheet read.

The USDA announced a $500 million grant program to establish new meat-processing facilities or support existing small operations.

The White House announced in September that the USDA would invest $1.4 billion in pandemic assistance to small producers and processes.

GET THE MORNING HEADLINES DELIVERED TO YOUR INBOX

Iowa Capital Dispatch is part of States Newsroom, a network of news bureaus supported by grants and a coalition of donors as a 501c(3) public charity. Iowa Capital Dispatch maintains editorial independence. Contact Editor Kathie Obradovich for questions: [email protected] Follow Iowa Capital Dispatch on Facebook and Twitter.

Our stories may be republished online or in print under Creative Commons license CC BY-NC-ND 4.0. We ask that you edit only for style or to shorten, provide proper attribution and link to our web site. Please see our republishing guidelines for use of photos and graphics.

Katie Akin
Katie Akin

Reporter Katie Akin began her career as an intern at PolitiFact, debunking viral fake news and fact-checking state and national politicians. She moved to Iowa in 2019 for a politics internship at the Des Moines Register, where she assisted with Iowa Caucus coverage, multimedia projects and the Register’s Iowa Poll. She became the Register’s retail reporter in early 2020, chronicling the impact of the COVID-19 pandemic on Central Iowa’s restaurants and retailers.

MORE FROM AUTHOR