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The Biden administration announced Monday it will allocate $1 billion to expand independent beef, pork and chicken processing in an effort to increase competition in the meatpacking industry and reduce costs for consumers.
The White House said the plan also is aimed at boosting profits for livestock producers, who have complained they are getting low prices while consumer costs have soared. President Joe Biden met Monday with farmers, ranchers and independent processors to roll out the initiative, tapping the $1.9 trillion American Rescue Act to fund the effort.
The action comes after Biden, whose administration has blamed a near-monopoly in meatpacking for the sharp increases in costs, signed an executive order in July seeking to increase competition.
Meat prices were the single largest contributor in November to the rising cost of food Americans prepare at home, the administration said, with beef, pork and poultry price hikes making up a quarter of the overall increase.
“In too many industries, a handful of giant companies dominate the market,” Biden said in Monday’s meeting. “And too often they use their power to squeeze out smaller competitors and stifle new entrepreneurs, making our economy less dynamic, giving themselves free rein to raise prices, reduce options for consumers or exploit workers.
“The meat industry is a textbook example,” Biden said.
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.
Biden’s plan calls for providing financing, worker training and technical assistance to independent processing companies that expand capacity. It includes $500 million the U.S. Department of Agriculture announced in July it would make available to expand slaughter capacity and competition.
Some highlights of the Biden policy initiative include providing:
- $375 million in “gap financing” grants to jumpstart meat processing projects that “truly expand capacity outside the largest meat and poultry processors.” The agriculture department will provide $150 million in its first phase for roughly 15 projects, and another $225 million in the second phase.
- Up to $275 million in capital for banks to provide loans and other financing with favorable terms for independent processors investing in cold storage, specialized equipment and other needs.
- $100 million to provide loan guarantees for more than $1 billion in loans.
- $100 million to train workers for well-paying, safe jobs.
- $50 million to provide technical assistance and research that will lower barriers for entrepreneurs, independent companies and others looking to add meat processing. The effort is intended to help businesses better understand environmental, food safety and worker safety requirements.
- $100 million to reduce overtime and holiday inspection costs for small and very small poultry, meat and egg processing plants so they can keep up with unprecedented demand. The initiative is expected to cut fees 30% to 75%.
