The Biden administration is taking steps to give power back to small farmers and processors. Advocates say it’s a ‘monumentous’ step toward upending consolidation in beef, pork, and poultry.
It may seem like supermarkets sell a variety of chicken, beef, and pork products, but most of those options come from the same tiny handful of companies.
Consolidation within meat and poultry processing has increasingly concentrated power and profits at the top over the past few decades. Four companies now control more than half of the market in chicken processing (Tyson, JBS, Perdue, and Sanderson), close to 70 percent in pork (Smithfield, JBS, Tyson, and Hormel), and nearly three quarters in beef (JBS, Tyson, Cargill, and National Beef), according to one recent analysis.
As advocacy groups see it, this sweeping change has taken place at the expense of farmers, communities, and consumers. And while the federal government has largely taken a hands-off approach—delaying and failing repeatedly to put lasting rules in place to regulate consolidation over the last four decades—industry groups have fought hard against reforms over the years.
Now, real change could be in works. On July 9, President Biden issued an executive order that included 72 actions to tackle corporate consolidation across a range of industries, including agriculture. On the same day, in conjunction with that order, the U.S. Department of Agriculture (USDA) laid out a multipronged plan to increase competition and fairness in the meat and poultry industries. And although the USDA had already signaled some attention to the issue earlier this year, advocates for farmers and ranchers were struck by the historic nature of the actions.
“This is monumental,” National Farmers Union (NFU) President Rob Larew told Civil Eats. “It’s an enormous shift in tone, and we certainly hope that it leads to a restoration of power for farmers in the marketplace.”
Other groups that have struggled for years to get policymakers and administrations to consider the impacts of consolidation on farmers and rural communities put out statements that echoed that sentiment at a rapid clip.
“Not since Teddy Roosevelt and Franklin D. Roosevelt has a president taken on corporate power to this extent,” said Joe Maxwell, a Missouri farmer and the president of Family Farm Action Alliance.
“We’ve urged administration after administration for the past 20 years to begin proper enforcement of both antitrust laws and the 100-year-old Packers and Stockyards Act and this is the first administration to actually take action,” said Bill Bullard, a former Montana rancher and CEO of the ranching trade group R-CALF USA.
Meanwhile, industry groups say new regulations are unnecessary and could interfere with markets in negative ways. The North American Meat Institute (NAMI), which represents the country’s biggest meatpackers, criticized the Biden administration’s announcements, with CEO Julie Anna Potts saying the changes would likely “have unintended consequences for producers and consumers.”
The Biden administration’s actions represent a turning of the tides to some, but they’re also just the first steps in processes that can take years and can shift measurably along the way.
The Consolidation Problem
One sentiment many farmer advocates share is that while consolidation in meat and poultry is not a new problem, things feel different at this moment for several reasons.
While many agricultural groups have long fought any kind of regulation, Larew said that at this point, markets in meat and poultry have become consolidated to a point at which the prices that farmers receive are no longer tied to the “true marketplace.” That reality is increasingly impacting the public. “As bad as it is for farmers and ranchers, it’s also a huge problem for consumers,” he said. “We have a growing disparity between what farmers are receiving and what consumers are having to pay. And in the middle is where the largest packing plants are seeing record profits.”
Disruptions to meat supply chains in 2020 due to COVID-19 put those disparities in the spotlight. As demand for meat skyrocketed, prices went up at grocery stores. But most ranchers did not get more for their beef, and companies that had to temporarily close plants due to outbreaks left pork producers without income or ways to sell their animals. Meanwhile, meat companies’ profits largely increased. Tyson’s revenue went up 2 percent to $43.2 billion in 2020, and Cargill’s revenue increased by 17 percent to $3 billion in 2020.
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