MARTA LAVANDIER/AP PHOTO
This article appears in The American Prospect magazine’s February 2022 special issue, “How We Broke the Supply Chain.” Subscribe here.
According to data released by the Bureau of Labor Statistics, the consumer price index for meats, poultry, fish, and eggs increased 12.8 percent over 12 months, with the index rising 20.9 percent for beef and veal alone.
In September, the White House had already released a briefing identifying the true culprit—the four major meatpacking firms. According to U.S. Department of Agriculture data, the top four firms in beef, pork, and poultry own 82 percent, 66 percent, and 54 percent of the packing and processing industry, respectively.
These firms began the process of vertical integration around the turn of the century and since have managed to monopolize this critical aspect of the industry, which sits directly in between farm and table on the supply chain. The briefing also noted that, during the pandemic, these middleman conglomerates have raked in record profits.
While consumers stretch household budgets and ration whatever meat does make it to their tables, farmers and ranchers are receiving less and less for their livestock and are unable to financially sustain their operations. But Joe Maxwell, co-founder and president of the advocacy group Farm Action, points to a historic lack of policy enforcement since the Packers and Stockyards Act—a century-old law that according to the USDA was “originally designed to protect poultry and hog farmers and cattle ranchers from unfair, deceptive, and anti-competitive practices in the meat markets.” The resurgence of this exploitation of farmers, ranchers, and consumers (and thus, the dire state of the industry at large) has economic impact far beyond that of the small family farms being squeezed out of the business every year.
“When we lose the farmer, or the farmer doesn’t have profitability, then that impacts every business in our rural communities. We talk about the hollowing out of rural America,” said Maxwell. “This extraction of all the wealth that can be taken off the farm extracts wealth out of that community. That farmer doesn’t have the money to go down to the automobile dealership and buy a new truck. They lose a farmer; they don’t go to the independent feed store anymore. These companies will begin to own the feed company. They begin to own the fertilizer company.”
In early January, President Biden held a roundtable with Department of Agriculture Secretary Tom Vilsack, Attorney General Merrick Garland, National Economic Council Director Brian Deese, as well as farmers, ranchers, and independent processors to discuss the need for competition in the industry. On the same day, the Biden-Harris administration released their action plan to address this long-standing issue, which included solutions such as strengthening the Packers and Stockyards Act, a new DOJ/USDA initiative to coordinate their competition-promotion efforts, providing additional support for workers and independent processors, and, most notably, expanding independent processing capacity with $1 billion in American Rescue Plan funds. Despite all of these efforts, it will take consistent work and considerable time to relieve the American public of the pressure from this choke point in the meat supply chain.
