Biden to use $1B to help small and mid-size meat processors
The Biden administration announced Monday it would use $1 billion from the American Rescue Plan to help small and independent meat processors.
The funds are intended to counteract corporate consolidation across the industry. Only four companies own about 85% of the beef processing market. Top hog and chicken processors have majority market control, too.
Early in the pandemic, the companies’ large processing plants slowed down as workers got sick. With so many animals needing processing, and limited alternatives to the major companies, livestock prices for farmers and ranchers sunk while consumer prices soared.
Still, the big processors profited, as an analysis recently published by the White House shows.
“Capitalism without competition isn’t capitalism. It’s exploitation,” President Joe Biden said on Monday.
The issues with large processors and a move towards smaller butchers didn’t start when COVID-19 came to the U.S., though.
“There were already bottlenecks,” said Dawn Thilmany, a Colorado State University professor of agricultural economics.
“So of course, when the shock happened almost two years ago, it only exacerbated the issue. And, in addition, we’ve seen some additional interest from consumers in wanting to support local businesses.”
Instead, she says the pandemic was the impetus for state and federal agencies to finally start taking action.
“It was the market driving it anyway, and it’s just the government stepping in to help support and grow something faster than the market could get there entirely by itself,” she said.
Already, Thilmany says efforts last year (both state and federal) helped increase competition. And she says the new federal grants and loans could help even more small processors open up shop.
“Some people have concerns about the government getting too involved in the private sector, but in places like this where there was clearly some supply chain disruptions and bottlenecks … I think that gives people a little less concern,” she said.
The funding also includes job training and bolstering related industries, like cold storage. Beyond that, federal plans include cracking down on what they consider unfair competition among producers.
This story was produced by the Mountain West News Bureau, a collaboration between Nevada Public Radio, Wyoming Public Media, Boise State Public Radio in Idaho, KUNR in Nevada, the O'Connor Center for the Rocky Mountain West in Montana, KUNC in Colorado, KUNM in New Mexico, with support from affiliate stations across the region. Funding for the Mountain West News Bureau is provided in part by the Corporation for Public Broadcasting.
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