The Biden Administration is pointing to corporate consolidation as the reason for the rising costs Americans are paying for food, but Tyson Foods, the nation’s largest meat processing company, says it rejects this assessment.
It goes on to say that there is a processing bottleneck in the supply chain of these meats, dominated by four companies that own between 55 and 85 percent of the market. It says those companies have seen record profits in the first half of this year while wholesale prices paid to farmers have remained largely flat.
“It raises concern about pandemic profiteering,” said director of the National Economic Council, Brian Deese, who coauthored the report. “Companies that are driving price increases in a way that hurts consumers who are going to the grocery store, but also isn’t benefitting the actual producers, the farmers and the ranchers that are actually growing the product.”
Officials named Tyson Foods as well as JBS Foods as such companies at Wednesday’s White House press briefing.
Earlier this year, Tyson agreed to pay more than $200 million to settle a class-action suit that alleged price-fixing among chicken producers.
“It’s not something we’re dreaming up here,” Secretary of Agriculture Tom Vilsack said. “The profits are real—the fact that producers are not making a profit.”
Vilsack said many farmers are losing money on their livestock and most, 89.6 percent, do not make the majority of their income from farming. He proposes strengthening the regulatory system, providing more transparency on the prices paid to farmers and offering $500 million in federal aid meant to increase the processing capacity of smaller food processors.
He also says the agriculture department is expanding its Emergency Livestock Assistance Program (ELAP) to include assistance foe transportation expenses, focusing on farms in areas that have dealt with serious drought.
President Joe Biden signed an Executive Order on Promoting Competition in the American Economy in July that directs the Department of Justice (DOJ) to look into price gouging and other forms of market manipulation. Deese says any legal action will be left to the appropriate enforcement agencies.