Biden Plays The Blame Game With The Economy

Written By BlabberBuzz | Friday, 07 January 2022 10:50 AM
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Biden Plays The Blame Game With The Economy

With inflation showing bad signs for consumers across the country, the Biden Administration persists in its war on big meat processors. The Administration asserts these producers are reaping record profits at the cost of consumers and smaller competitors.

The White House has published what it calls an action plan for "a fairer, more competitive, and more resilient meat and poultry supply chain" complete with a comprehensive scope of initiatives.

"In too many industries, a handful of giant companies dominate the market," President Joe Biden said in a Monday meeting to discuss the issue. "Too often, they use their power to squeeze out smaller competitors and stifle new entrepreneurs, making our economy less dynamic and giving themselves free rein to raise prices, reduce options for consumers, or exploit workers. The meat industry is a textbook example on the price side."

In recent months, the White House has repeatedly gone after meat processors, accusing them of causing the current inflation. While total inflation has hit a 39-year high of 6.8%, the cost of beef and veal is up as much as 20% year over year, with pork up 14% and chicken up nearly 9%.

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Industry consolidation is to blame, according to the administration, with four companies controlling between 54% and 85% of the market for beef, pork, and poultry.

"You could call it corporate greed, sure," White House press secretary Jen Psaki said in December. "You could call it jacking up prices during a pandemic."

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The Biden Administration intends to allot $1 billion from the "American Rescue Plan" to help make more room for independent processors. It also plans to double up enforcement of the Packers and Stockyards Act of 1921, the Sherman Antitrust Act of 1890, and the Clayton Antitrust Act of 1914 as a means of encouraging competition. The U.S. Department of Agriculture and the Department of Justice will cooperate for the effort and will set up a portal for people to report concerns about violations of the laws.

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Referring to processors as a middleman, the White House fact sheet says processors can drive down profits for farmers while causing prices to increase for consumers. Growing competition is encouraged as a way of creating stable jobs in rural areas in partnership with labor unions. Industry groups aren't sold on the plan.

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“The Biden Administration continues to ignore the number one challenge to meat and poultry production: labor shortages," said North American Meat Institute CEO Julie Potts in a written statement. "This tired approach is not surprising because they have refused to engage with the packing and processing sector they attack, going so far as to hold a roundtable on meat packing without a single beef or pork packer present."

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