President Biden met with farmers, ranchers and independent processors from across the country Jan. 3 to outline the Biden-Harris administration’s Action Plan for a Fairer, More Competitive and More Resilient Meat and Poultry Supply Chain.
Events like the COVID-19 pandemic, the Tyson fire and the JBS cyberattack have underlined the issues a lack of competition creates in the meat markets. The middleman position of the four major packers creates a key bottleneck in the food supply chain and increases the power they wield at both ends – paying producers less and forcing consumers to pay more.
Biden’s action plan for increased competition includes four core strategies.
1. Expand independent processing capacity
The administration is setting aside $1 billion in American Rescue Plan funds to aid with the expansion of independent processing capacity. Phase I of this commitment will furnish $150 million to jump-start approximately 15 projects, beginning this spring, with Phase II to follow in the summer. More funds will be dedicated to strengthening the financing systems for independent processors and backing private lenders who invest in independent processors and infrastructure.
2. Support workers and the independent processor industry
The USDA will dedicate funding to supporting employee training and safe working conditions and promote innovation via publicly accessible expert knowledge to help independent processors create new capacity or expand existing capacity. The plan also provides for reduced overtime inspection costs to help small processing plants keep up with demand, and provides funding for the improvement and expansion of existing facilities.
3. Strengthen the rules that protect farmers, ranchers and consumers
The administration will issue new “Product of USA” labeling rules that will require animals to be raised and processed in the U.S. The Department of Justice and the USDA also announced a new joint initiative to better coordinate their efforts to crack down on market competition, which includes a new portal for reporting concerns about potential violations of the competition laws, set to go live by early February. They also promised stronger rules under the Packers and Stockyards Act, but details on those rules are currently unavailable.
4. Increase transparency in cattle markets
This process has already begun, with the USDA including more data in their cadre of reports. These, along with the legislation already being circulated through Congress, make up much of the efforts toward price discovery and market transparency.
Most industry groups have applauded the progress made to increase fair competition in the beef markets – but remain skeptical as to how effective Biden’s action plan will be.
