Meat+Poultry - February 2022 - 14

WASHINGTON
Consolidation concerns
To combat consolidation in the US
meat processing industry, the Biden
administration has pledged to invest
approximately $1 billion to expand
independent meat processing capacity
in the United States. The money to
be used will come from the American
Rescue Plan that was signed into law in
March 2021.
The US Department of Agriculture
(USDA) will provide financing grants
up to $375 million in two phases as
part of the program. Phase I will
invest approximately $150 million
for an estimated 15 projects that are
considered to have the greatest nearterm
impact. The USDA will deploy
an additional $225 million to support
additional projects in phase II, which
will take place in summer 2022.
Additionally, the USDA will work
with lenders to make more capital
available to independent processors
that need credit. Up to $275 million
will be deployed as part of the
program. The Biden administration
also said it will support private
lenders that invest in independently
owned food processing and
distribution infrastructure.
Other initiatives will include creating
job opportunities in rural communities;
investing an estimated $50 million
in technical assistance and research
and development to help independent
business owners, entrepreneurs,
producers, and other groups create new
capacity or expand existing capacity;
and providing $100 million in reduced
overtime inspection costs to help small
and very small processing plants keep
up with demand.
In July, President Biden signed an
executive order to promote competition
in the agriculture, labor, health care and
technology sectors. Specifically related
to agriculture, the proportion of dollars
spent on food reaching farmers and
ranchers has been falling for decades,
according to the order.
" For example, four large meatpacking
companies dominate over 80%
of the beef market, and, over the last
five years, farmers' share of the price
of beef has dropped by more than a
quarter - from 51.5% to 37.3% - while
the price of beef has risen, " the Biden
administration said.
The order directed the USDA
to develop a plan to " increase
opportunities for farmers to access
markets and receive a fair return,
including supporting alternative food
distribution systems like farmers
markets and developing standards and
labels so that consumers can choose to
buy products that treat farmers fairly. "
The agency also was tasked with
making it easier for farmers to " bring
and win claims " under the Packers
and Stockyards Act, related to how
farmers are paid to protect them from
retaliation when farmers " speak out
about bad practices. "
The USDA and the US Department
of Justice said on Jan. 3 they will jointly
develop a centralized process for
farmers, ranchers and other producers
and growers to submit complaints about
potential violations of the antitrust laws
and the Packers and Stockyards Act.
The North American Meat
Institute (NAMI) pushed back on
the administration's claims that
concentration is responsible for
the prices producers receive and
consumers pay for meat.
" Prices reflect supply and demand
in a healthy market, " NAMI said.
What's driven higher prices for
consumers has been labor shortages in
plants due to the COVID-19 pandemic,
according to NAMI. Likewise, the
prices producers have received is due
to a backlog of livestock, also due to
the pandemic.
" The administration wants the
American people to believe that the
meat and poultry industry is unique
and not experiencing the same
problems causing inflation across the
economy, like increased input costs,
increased energy costs, labor shortages
and transportation challenges, " said
Julie Anna Potts, president and chief
executive officer of NAMI. " Consumers
know better. "
KEITH NUNES | meatpoult r y@sos land.com
" The administration wants the American
people to believe that the meat and
poultry industry is unique and not
experiencing the same problems causing
inflation across the economy. "
- JULIE ANNA POTTS
14 MEAT+POULTRY | 02.22 | www.meatpoultry.com
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Meat+Poultry - February 2022

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