by Marion Nestle

Currently browsing posts about: Consolidation

Sep 16 2021

The Biden Administration’s challenge to meat industry consolidation

I posted last week on meat-industry consolidation, an issue that has become so prominent that the White House is even talking about it.

The President understands that families have been facing higher prices at the grocery store recently. Half of those recent increases are from meat prices—specifically, beef, pork, and poultry. While factors like increased consumer demand have played a role, the price increases are also driven by a lack of competition at a key bottleneck point in the meat supply chain: meat-processing. Just four large conglomerates control the majority of the market for each of these three products, and the data show that these companies have been raising prices while generating record profits during the pandemic.

That’s why the Biden-Harris Administration is taking bold action to enforce the antitrust laws, boost competition in meat-processing, and push back on pandemic profiteering that is hurting consumers, farmers, and ranchers across the country.

Speaking for the White House, the director of the National Economic Council said:

When you see that level of consolidation and the increase in prices, it raises a concern about pandemic profiteering — about companies that are driving price increases in a way that hurts consumers who are going to the grocery store, and also isn’t benefiting the actual producers, the farmers and the ranchers that are growing the product.

The reactions

In a statement, Tyson’s Foods said “Tyson Foods categorically rejects the conclusions drawn earlier today by the Secretary of Agriculture and the Director of the National Economic Council in a White House press briefing.  The U.S. Department of Agriculture recently published a report detailing the drivers of consumer inflation in the food sector, none of which are related to industry consolidation or scale.”

Smithfield pointed to a statement from the North American Meat Institute.

And then there’s this @FarmPolicy tweet,

Interesting times, these.

Mar 22 2008

The “Chickenization” of the Beef Industry

I’ve just learned a new word: “chickenization.” This comes from an article on meatpoultry.com explaining how consolidation in the beef industry has gotten so extreme that just three companies now control more than 70% of the market: JBS 31%, Tyson 21%, and Cargill 21%. Monopoly capitalism in action!

Mar 13 2008

Consolidation in the meat industry: a good thing?

A reader of the last post on the big meat recall asks for the second time (sorry I didn’t get to it earlier): “I recently read an article by Tim Phillpot about the consolidation of the meat industry and how this gives them leverage to control how beef is raised and sold. Apparently JBS (Brazil) is planning on buying National Beef Packing here in the US. The comments say that most analysts think the deals are positive. What do you think are the ramifications of such a concentration of power and influence?”

Indeed. We’ve just seen one result of industry consolidation: a recall of 143 million pounds of ground beef. I’m not sure that everyone views this deal favorably. I’m hearing a lot about anti-trust laws. In its March 5 account, the Wall Street Journal noted that the deals “will almost certainly prompt regulatory scrutiny because of their size and potential effect on the marketplace.”

What’s this about? The U.S. dollar is weak so American companies are a bargain for foreign investors; beef producers are cutting back on production because of the high price of grain (in part because its grown for fuel); and the industry is worried that the government will enforce safety regulations. If you control a big percent of the market–and the newly merged company will control 33% all by itself–you call the shots. I’m hoping that federal regulators will pay as much attention to this huge beef company merger as as it did to the tiny (by comparison) takeover of Wild Oats by Whole Foods last year.