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Beef prices likely to continue their upward trend

President Biden says it’s time for the big meat processors to treat consumers, farmers, and ranchers with more respect

Beef prices concept
Photo (c) d3sign - Getty Images
The price consumers are paying for beef will likely continue to go up. The Department of Agriculture says it’s not because grocery stores are raising prices to add to their coffers; it's because the U.S. has the fewest beef cows since 2015.

Rather than keeping cows around to reproduce and bolster availability from 2021 to 2022, ranchers opted to send their cows to slaughter last year. Making matters worse, two other factors have come into play.

Beef processing plants had to deal with workers’ fears over the pandemic, which led to labor shortages and a reduction in the number of beef products produced. In the past, the U.S. could count on Central and South America to supply beef, but that pipeline is drying up too.

Don’t expect relief anytime soon. Rich Nelson, chief strategist for brokerage Allendale, told FoodMarket that the availability of beef is likely to tighten in the second half of 2022. 

The White House wants to tackle meat prices

A few weeks ago, President Biden made it known that his administration is concerned about price hikes, particularly in the consumer meat category.  Calling the meat industry a textbook example when it comes to consumer prices, he put much of the problem on a lack of competition.

“Four big corporations control more than half the markets in beef, pork, and poultry,"  he said in a virtual meeting to discuss boosting competition and reducing prices in the meat-processing industry.

Without meaningful competition, Biden feels farmers and ranchers are essentially shut out of choosing who they sell to.

“Our farmers and ranchers have to pay whatever these four big companies say they have to pay. But that’s only half of it,” Biden stated. “These companies can use their position as middlemen to overcharge grocery stores and, ultimately, families.”

Can government officials turn this around to help consumers? Biden thinks it’s possible. Working with governors, the Attorney General, and the USDA, he says his administration will try to create fairer markets to bring down prices in grocery stores.

To get there, his four-point plan goes like this:

  • Invest $1 billion in new and expanded meat and poultry processing capacity to bring in more competition from farmers and ranchers.

  • Rewrite the 100-year-old Packers and Stockyards Act so farmers and ranchers are protected from abuse by processors. 

  • Enforce existing competition laws vigorously and fairly.

  • Bring greater transparency to the industry. “A free market isn’t truly free without transparency around prices,” Biden said.

“Strengthening competition is good for all of us: farmers and ranchers who deserve a fair shake; American families facing high prices at grocery stores who deserve a fair price to put food on the table; rural communities, which see more good jobs when there’s more competition; and our economy as a whole as we make our food supply chains more resilient,” Biden concluded.

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