New Programs Will Increase Competition and Ensure Fairer Earnings for Producers and More Affordable Prices for Consumers
WASHINGTON, D.C. [1.4.22] – Today, U.S. Senator Tina Smith and Representative Angie Craig (both D-Minn.) announced new plans to create a more competitive, fair, and resilient meat and poultry sector.
These initiatives will help secure better earnings for producers while ensuring more choices and affordable prices for consumers. The funding for this plan is available through the American Rescue Plan, which Senator Smith and Rep. Craig helped pass earlier this year.
“Just a handful of large companies have come to dominate the meat and poultry processing industry, which means higher prices for consumers and shrinking earnings for producers,” said Sen. Smith, a member of the U.S. Senate Committee on Agriculture, Nutrition and Forestry. “Throughout my time in the Senate, I have advocated for solutions to support Minnesota farmers facing fewer processing options and Minnesota families stuck paying higher prices due to this lack of competition. I applaud these new programs, which will make the meat and poultry industry more fair, dynamic and competitive.”
“For far too long, a handful of major meat processors have dominated the market, controlling prices and limiting options for American consumers while reducing profits for family farmers and producers,” said Representative Angie Craig. “Alongside members of both parties, I have long urged the Biden Administration to take immediate action to bolster competition and build greater resiliency in the American food supply chain. I am grateful that the White House is taking immediate steps to support small and regional processors in Minnesota and across the country – which will support farmers and ranchers, help to lower costs for hardworking American families and foster economic growth in rural America.”
The Department of Agriculture (USDA) will dedicate $1 billion in American Rescue Plan funds to expand independent meat and poultry processing capacity. This new processing capacity will help address issues stemming from a hyper-concentrated market.
Four large meat-packing companies control 85 percent of the beef market. In poultry, the top four processing firms control 54 percent of the market. And in pork, the top four processing firms control about 70 percent of the market. The meatpackers and processors buy from farmers and sell to retailers like grocery stores, making them a key bottleneck in the food supply chain.
When dominant middlemen control so much of the supply chain, they can increase their own profits at the expense of both farmers—who make less—and consumers—who pay more. Most farmers now have little or no choice of buyer for their product and little leverage to negotiate, causing their share of every dollar spent on food to decline.
And, when too few companies control such a large portion of the market, our food supply chains are susceptible to shocks. When COVID-19 or other disasters such as fires or cyberattacks shutter a plant, many ranchers have no other place to take their animals. Our overreliance on just a handful of giant processors leaves us all vulnerable, with any disruptions at these bottlenecks rippling throughout our food system.
More information about the programs can be found here.