You paid more for your holiday brisket this year because the meat industry is very concentrated. President Biden thinks that’s a big part of the reason why.
The White House said yesterday that it will give $1 billion to independent meat and poultry producers in order to make the industry more competitive. How concentrated is the food in this dish?
Is it true that only four big meatpacking companies control 85% of the beef market? Is that true? And because these companies have a lot of power, they can raise prices more than a market with a lot of different people would be able to.
Meat prices went up by 16% a year in November.
It’s part of a bigger plan. President Barack Obama’s administration has also taken aim at a number of other industries where the White House says that a few big players have caused prices to rise. Biden is now focusing on meat producers. It was in November, for example, that he asked the FTC to look into oil and gas companies because they’ve been acting “anti-consumer.” This has caused gas prices to go up.
Industry groups and some economists say that blaming a lack of competition for the recent rise in prices is like blaming apple juice for your hangover. After the White House said that profits for big meatpackers rose by 3000% during the pandemic, the North American Meat Institute said this analysis “conveniently” omits things that made prices rise, like worker shortages and supply chain bottlenecks, which made prices rise.
Biden’s economic strategy doesn’t matter if they cut down on inflation or not. Crackdowns on anti-competitive behaviour have become a big part of it. Over the summer, before prices rose too much, he signed an executive order with 72 directives about antitrust enforcement and encouraging competition.