Updated Jan 9, 2022 - Politics & Policy

Food inflation bites Biden

Biden.
President Biden holds a virtual meeting with farmers and ranchers. Photo: Roberto Schmidt/AFP via Getty Images

Rising food prices are bedeviling the Biden administration, fueling consumers’ concerns about inflation and prompting the president to target the meatpacking industry.

Why it matters: American families are fretting over food prices, which rose 6.1% from November 2020 to November 2021, according to the latest Consumer Price Index data.

  • Biden’s disapproval rating reached a new high in a CNBC/Change Research poll released Tuesday, with 72% disapproving of his handling of the price of everyday items.

State of play: Biden accused the meat sector of “exploitation” and detailed plans to devote $1 billion to independent meat processors to boost competition.

  • The top four meat processors in beef, pork and poultry control 85%, 70% and 54% of their markets, respectively.
  • The price of meats, poultry, fish and eggs rose 12.8% in the latest CPI report.

The other side: The Biden administration’s action reflects a “tired approach” that “continues to ignore the No. 1 challenge to meat and poultry production: labor shortages,” Julie Anna Potts, president and CEO of the North American Meat Institute, said in a statement.

Analysts say many factors — including shipping slowdowns, supply chain problems and increased demand — are driving up prices.

  • “Almost none of it has to do with concentration and market power issues,” Purdue University agricultural economist Jayson Lusk tells Axios.

Yes, but: The Justice Department last year accused the broiler-chicken industry of "price fixing, bid rigging and other anticompetitive conduct" as part of an ongoing investigation.

  • “I can see why the administration wants to scrutinize” the industry, CFRA Research food sector analyst Arun Sundaram tells Axios. But "the fallacy is attributing rising meat prices to a single factor.”

What we're watching: Food inflation is expected to remain at elevated levels in the first half of 2022, fueling further frustration among consumers.

Editor's note: This story was originally published on Jan. 4.

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