A presidential executive order signed last Friday (July 9) will weaken monopolies and promote competition in the U.S. – and includes half a billion dollars aimed at combatting consolidation in the meat & poultry category.
President Joe Biden's executive order includes elements designed to lower the price of prescription drugs, protect consumers' privacy and increase scrutiny of the tech industry. And it includes $500 million allocated to USDA "to expand meat and poultry processing capacity so that farmers, ranchers and consumers have more choices in the marketplace," USDA announced.
"Dominant companies can use their power to engage in abusive practices and make it harder for farmers, ranchers and consumers to get a fair price," the USDA announcement continued. "Farmers’ share of every dollar spent on food has declined consistently from 35 cents in the 1970s to around just 14 cents in recent years."
There has been a spate of legal activity recently against big processors in the meat & poultry sector, resulting in criminal and civil prosecutions for price-fixing and antitrust activities. Search "price fixing" on FoodProcessing.com and you'll see 10 different but recent stories just on the first page of results.
Food Processing devoted a cover story to the issue in March, noting 53% of the meat market is controlled by four firms, which process 85% of America's beef and 65% of its chicken. Plant shutdowns during the Covid pandemic only aggravated the situation.
USDA also will allocate "more than $150 million for existing small and very small processing facilities to help them weather COVID, compete in the marketplace and get the support they need to reach more customers. USDA is also holding meatpackers accountable by revitalizing the Packers and Stockyards Act, issuing new rules on 'Product of USA' labels, and developing plans to expand farmers’ access to new markets."
"This is a once in a generation opportunity to transform the food system so it is more resilient to shocks, delivers greater value to growers and workers, and offers consumers an affordable selection of healthy food produced and sourced locally and regionally by farmers and processors from diverse backgrounds," said Agriculture Secretary Tom Vilsack. "I am confident USDA’s investments in expanded capacity will spur millions more in leveraged funding from the private sector and state and local partners as our efforts gain traction across the country.”
The effort is a push by President Joe Biden’s administration to focus on competition as part of the economic recovery from the pandemic. “Forty years ago, we chose the wrong path, in my view, following the misguided philosophy of people like Robert Bork and pullback on enforcing laws to promote competition,” Biden said, citing the late solicitor general. “We are now 40 years into the experiment of letting giant corporations accumulate more and more power. And what have we gotten from it? Less growth, weakened investment, fewer small businesses … I believe the experiment failed.”
