Biden’s beef: White House attacks meat industry as inflation rages

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The Biden administration is targeting meat-makers as villains in the inflation debate, saying the industry enjoys record profits even as consumers suffer from high prices at their local grocery store.

The White House blames the issue on industry consolidation and corporate greed, but critics say meat producers are being used as a scapegoat for problems caused by the government itself.

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White House press secretary Jen Psaki hit on the issue repeatedly during recent briefings, saying it’s time to “crack down” on the industry’s high profits.

“Gross profit margins for big meat processors are up 50%, and net margins are up over 300%. That should not be the case,” Psaki said last Friday. “That is not all attributed to the supply chain issues.”

Up to 25% of the overall jump in grocery store prices is attributable to meat purchases, Psaki added, faulting corporate avarice as the cause.

She reiterated that during another press briefing on Tuesday.

“You could call it corporate greed. Sure,” Psaki added. “You could call it jacking up prices during a pandemic.”

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The statements followed a blog post by White House National Economic Council Director Brian Deese and other officials, which claimed that just four companies, Tyson, JBS, Marfrig, and Seaboard, control 55% to 85% of the market for meat and that these dominant players are leveraging their market power to raise prices and grow profit margins.

But that argument only distracts from the real issue, according to economist and former Trump economic adviser Stephen Moore.

“The Biden administration is trying to blame inflation on big business. The real culprit is big government,” Moore said. “Why don’t they look in the mirror?”

Alfredo Ortiz, CEO of the conservative business group Job Creators Network, echoed the sentiment.

“They’re blaming the meat companies when just yesterday, the Producer Price Index showed we’re at the highest 12-month increase for wholesale prices in over a decade,” Ortiz said in a written statement. “Now, Biden needs to look in the mirror … he just might find Jimmy Carter looking back at him, pleased that someone is making his presidency look good.”

Producer prices increased 9.6% for the year ending in November, marking it the fastest pace on record, according to a report on producer costs by the Bureau of Labor Statistics. Some economists say wholesale inflation is likely peaking, but the latest numbers eclipsed predictions by forecasters and were the highest in the gauge’s 11-year history.

The White House has struggled to contain consistently high and rising inflation, saying at first that it was transitory and that easing supply chain woes would help. Despite repeated assurances that rising prices would be transitory and that the $2.4 trillion Build Back Better bill will help ease inflationary pressures, polls show the public losing confidence in the Biden administration as 2021 draws to a close.

There’s no denying meat prices are a factor. The cost of beef and veal is up as much as 20% year over year, with pork up 14% and chicken up nearly 9%.

Calls are now circulating for stronger antitrust enforcement in meat production, echoing the raging debate about monopolistic practices in the tech industry.

“Families are rightly upset that the price of meat has gone through the roof. Who’s to blame?” Sen. Elizabeth Warren tweeted Monday. “Meatpacking monopolies that are using inflation as cover to raise prices and make record profits. I’m fighting for stronger antitrust enforcement to lower prices.”

An industry group called the North American Meat Institute came out swinging at the claims of corporate greed and record profits, saying the National Economic Council is ignorant of both agricultural economics and the basic fundamentals of supply and demand.

“Beef, pork and poultry all have their own supply and demand market fundamentals,” Meat Institute President and CEO Julie Potts said in a written statement. “The calculations used by the Economic Counsel awkwardly and misleadingly combine these sectors, and the council’s analysis conveniently excludes data on rising input costs, rising fuel costs, supply chain difficulties and labor shortages that impact the price of meat on the retail shelf.”

Potts noted that the same four-firm concentration ratio has existed in the market for close to three decades. “Why the sudden inflation?” she asked.

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Nonetheless, there is at least some appetite for reforming the industry. A bipartisan group of senators introduced legislation in November aiming to improve fairness in the cattle market.

Consisting of two Republicans and two Democrats, the group of senators from Midwestern and Western states announced the Cattle Price Discovery and Transparency Act last month. The legislation aims to boost transparency and create more timely reporting of beef trades in an effort to improve market conditions for independent producers.

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