Food inflation bites Biden
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.