The White House will make funds available to support a total of US$1 billion in guaranteed loans for private investors backing independently owned food processing and distribution businesses.
The programme guarantees loans of up to $40 million to finance start-ups or expansions of food aggregation, processing, manufacturing, storage, transport, wholesale, and distribution. The loans are designed to improve resilience in America’s food supply chain.
The Administration has followed up the announcement, made last month, by meeting farmers, ranchers and independent meat suppliers on January 3rd.
The move is the latest in ongoing efforts to address a lack of competition in the meat industry.
A White House statement of January 3rd reads, “As farmers’ share of profits have dwindled, American consumers are paying more – with meat and poultry prices now the single largest contributor to the rising cost of food people consume at home.
“Four large meat-packing companies control 85 per cent of the beef market.
“Fifty years ago, ranchers got over 60 cents of every dollar compared to 39 cents today”
“Meatpackers and processors buy from farmers and sell to retailers, 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.
“Fifty years ago, ranchers got over 60 cents of every dollar a consumer spent on beef, compared to about 39 cents today. Similarly, hog farmers got 40 to 60 cents on each dollar spent 50 years ago, down to about 19 cents today.”
It said 50 beef slaughter plants owned by a handful of companies process nearly all the cattle in the United States, currently.
It added that a new portal will be launched allowing farmers and ranchers to report potentially unfair and anticompetitive practices in the agricultural sector. Their confidentiality will be protected.
“Tyson told investors that pricing actions more than offset the higher cost of goods”
And new “Product of USA” labelling rules will make it clear when meat was raised overseas and simply processed in the United States.
In September meat processor Tyson said, ”It is inaccurate to suggest that consolidation in the meat processing industry is leading to higher prices for consumers.
“Data shows that while the concentration of the industry has remained relatively constant for close to 30 years, quality has significantly improved.”
It added, “Tyson Foods is committed to working with the Administration, the US Congress and others to find ways to better feed this growing country – and keep consumer prices affordable.”
A December White House blog pointed out that Tyson told investors in its earnings call, that pricing actions “more than offset the higher cost of goods sold.”
Comparing the fourth quarter of 2021 to the same quarter in 2020, it had increased the price of beef by more than 35 per cent, making “record profits while actually selling less beef than before”.
The January 3rd White House statement said it would support better training and safety measures for meat processors, creating “good-paying, quality jobs” in rural communities.
This follows an independent investigation which counted nearly 100,000 cases and 466 deaths from Covid-19 among farm and food processing workers.
“Research was hamstrung by a chronic lack of data from private companies and public health”
The Food and Environment Reporting Network found that nearly 2,000 outbreaks at fruit and vegetable farms, snack food facilities, meat processing plants, and seafood trawlers drove rural infection rates. They also established a link between meat plant processing speeds and the spread of Covid-19.
On January 2nd it updated a table showing Tyson Foods was responsible for the most Covid deaths in the food system, by company, with 39 deaths reported in meat packing. JBS ranked second with 18.
The Network said its research was hamstrung by a chronic lack of data from private companies and public health departments, adding, “While a couple of meatpacking companies once shared worker testing data, the vast majority of food companies never reported any information on worker illness or death.
“A few states have been committed to full transparency about the location of Covid-19 outbreaks, but most did not collect or publish that data at any point during the pandemic. No federal agency has stepped in to collect or publish occupational illness data for food system workers.
“The number of reliable sources for this project has fallen significantly. Meanwhile, workers continue to contract Covid-19 and food system worker vaccination rates appear to be below the national average.
“There likely hasn’t been another surge like the one witnessed at meatpacking plants in the spring of 2020, but data constraints mean that the true toll of the pandemic on food system workers is unknown.”
