Prices for beef, pork and chicken have surged during the pandemic, and the Biden administration believes it knows who's partly behind it: a handful of big meatpacking companies that control most of the country's supply.
Beef prices alone jumped 12.2% over the last year, according to new consumer inflation data on Tuesday, making it one of the costliest items in the surging bills that consumers face today at the grocery store.
"It's just outrageous. I can't even understand how people are supposed to be able to pay that kind of money for basic stuff like ground beef," says Adam Jones, who raises Angus cattle in northwest Kansas. "We're not talking about filet mignon. We're just talking about being able to make spaghetti or being able to make tacos."
...The surge in meat prices is contributing to high inflation. The Labor Department reported Tuesday that consumer price index rose 5.3% in the 12 months ending in August. That's down slightly from June and July when inflation was running at 5.4% — but it's still near the highest level in nearly 13 years. Pork prices jumped 9.8% in the last year while chicken prices jumped 7.2%.
...The White House is responding by shining a spotlight on "Big Meat," as part of a larger campaign against what the Biden administration calls "anti-competitive" behavior by big business — even as meatpackers insist they are not to blame.
The administration is setting aside $500 million to help bankroll new meat processors to compete with the big four.
The Justice Department is also investigating alleged price-fixing in the chicken market. The No. 2 chicken processor, Pilgrim's Pride, pleaded guilty this year to conspiring with others to limit production and keep chicken prices artificially high.
But meatpackers reject the idea that industry consolidation is hurting ranchers or consumers.
"The present spread between live cattle and beef prices has everything to do with the law of supply and demand," says Shane Miller, group president for fresh meats at Tyson, the nation's largest beef and chicken processor.
Miller told a Senate committee this summer that the pandemic and other shocks have forced processors to slow down their slaughtering operations, so there are fewer cattle coming in and fewer steaks going out.
"This led to an oversupply of live cattle and an undersupply of beef, all while demand for beef products is at an all-time high," Miller said. "So it should not surprise any of us that as a result, the price for cattle fell while the price for beef rose."...MORE
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