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Grocery chains compete for supplies and set retail meat prices - not meat processors - she noted, and Americans are willing to pay higher prices for beef. 'The market is behaving predictably,' said Sarah Little, vice president of communications for the North American Meat Institute.

Chamber of Commerce argue that higher meat prices are a temporary result of forces stoking inflation across the economy, including labor shortages. The North American Meat Institute, representing beef and pork packers, and the U.S. And the ones that got bigger survived,' Peel said.

#M.e.a.t. discount tickets driver

'The main driver of why we have the industry structure we have today is because of the economics of cost efficiency. He blames them not on deliberate anti-competitive behavior, but on 30 years of market-driven consolidation that left the industry with no spare capacity to handle the COVID-19 demand surge. 'The margins have been extremely wide' in beef, said Derrell Peel, a livestock economist at Oklahoma State University, citing the processing bottlenecks. beef operation more than doubled its third-quarter operating margin - the rough difference between revenue and costs - to 21%, compared with the same periods of 20, the Brazilian company's earnings statement shows. That is after a White House said in a December analysis that the four big meatpackers - Tyson Foods Inc (TSN.N), JBS SA (JBSS3.SA), Marfrig Global Foods SA and Seaboard Corp (SEB.A) - had tripled their net profit margins during the pandemic.

The administration's action plan includes $1 billion for grants and loans for new independent processing plants, $100 million for worker training, new labeling rules and ways for farmers to report anticompetitive practices. President Joe Biden has announced steps to boost competition in beef, pork and poultry processing to curb what he argues is 'exploitation' of consumers and farmers. The price cattle farmers earned declined slightly over the same period, and the National Farmers Union argues that more competition is needed in meat packing. meat processing system already stretched to its limits by a decades-long drive for maximum efficiency and profit, leaving just four companies to dominate the beef packing market.ĬOVID-driven plant shutdowns, safety protocols spacing employees further apart and labor shortages cut the number of cows these plants could process, reducing prices they paid to cattle farmers even as the cost of the end product spiked for consumers.īeef retail prices rose 30% from the beginning of 2020, before pandemic lockdowns started, to a peak of $7.90 per pound in October, before declining slightly in November and December, according to U.S. And capacity problems aren't going to be fixed overnight.'Ĭattlemen are frustrated with limited options for selling their herds, he said, adding: 'I don't think it's a bad thing that the government is looking in to this stuff.'Īt the heart of the issue, just as with supply chain snarls, is unusually strong consumer demand for meat, and especially beef.Īmericans hunkered down during the pandemic and splurged on consumable treats instead of travel or entertainment, and Chinese traded Australian imports for grain-fed U.S.

'What we're seeing with prices, I would argue as an economist, that's exactly what we should see given this bottleneck. 'I think there's probably some truth on both sides,' said David Anderson, a livestock economist at Texas A&M University, about the White House's battle with meat processors. They deny the administration's pandemic profiteering allegations.Īgricultural economists say that pandemic-stoked meat demand has exposed a shortage of slaughterhouse capacity, especially in beef, a supply-chain problem similar to those of other industries. meatpacking industry is dominated by a few global companies which say prices reflect a surge in demand, pandemic-constrained supplies, and rising costs for labor and transportation. WASHINGTON, Jan 19 (Reuters) - The Biden administration is targeting a small group of meat packers for high beef, pork and poultry prices that it says are squeezing consumers and fueling inflation, arguing that they are abusing their market power.