White House announces $223 million investment to fight "Big Meat"
The Biden administration on Wednesday morning announced a $223 million investment meant to expand meat and poultry processing capacity in the U.S., part of an effort to tame sky-high food inflation.
Why it matters: Meat and poultry prices are soaring at the moment, but the White House efforts are long-term — the funds go toward loans and grants for smaller meat processing companies and farmers that can compete against "Big Meat." The payoff will take awhile.
- "There are multiple reasons for increased [meat and poultry] costs. This is obviously going to have an impact," said Secretary of Agriculture Tom Vilsack on a call with reporters Tuesday.
- "It will take some time. There's no question about that."
Catch up quick: The latest announcement is part of a plan Biden announced back in January, committing $1 billion in funding from the American Rescue Plan.
Details: The broad idea is to support regional meat and poultry processors who can compete with the big four — Cargill, Tyson Foods, JBS, and National Beef Packing Co. — that dominate the industry.
- More processors would mean that farmers would theoretically fetch a better price for cattle and poultry, while at the same time increasing competition among processors would lower prices for consumers.
- Context: Meat prices are up 22% since January 2020, according to CPI data.
The other side: Business groups say higher energy and labor costs — not excessive market power — are driving up meat and poultry prices.
Zoom out: The administration came in hot on tackling antitrust issues even before soaring inflation became the most pressing economic issue. And it has since turned the fight against corporate consolidation into a cornerstone of its efforts to combat rising prices.
- “Over the last few decades, we’ve seen too many industries become dominated by a handful of large companies that control most of the business and most of the opportunities — raising prices and decreasing options for American families, while also squeezing out small businesses and entrepreneurs," reads a statement from January, announcing the meat and poultry processing plan.