USDA Report: Meat Industry Primarily Serves a Select Few

A recent USDA report reveals that the meat industry primarily serves a select few, engaging in practices that stifle competition. Released on Monday, the report titled “Interim Report: Competition and Fair Practices in Meat Merchandising” highlights unfair pricing structures, excessive marketing fees, and anticompetitive preferential arrangements involving food distributors, meat packers, and retailers.

Based on over 1,600 public comments and interviews across the meat industry, the report outlines how market concentration among packers and retailers has grown, while the number of livestock producers has diminished. As a result, fewer companies control a larger share of meat sales, leading to practices like price discrimination and unnecessary fees that hinder competition.

The USDA’s investigation is part of President Biden’s executive order aimed at promoting competitive markets for farmers and lowering food prices. Secretary of Agriculture Tom Vilsack stated that the goal is to “open up new markets for farmers and deliver fairer, more competitive choices.”

In response, the USDA is considering several actions, including:

• Adjusting market surveillance and investigative efforts in meat merchandising
• Strengthening enforcement of the Packers & Stockyards Act (P&S Act)
• Using subpoena authority to gather more data on market practices
• Soliciting further public comment on regulatory limitations

Additionally, the USDA plans to enhance cooperation between its Food Safety Inspection Service and Agriculture Marketing Service to improve market monitoring and enforcement.

The report also notes that the average price of meat increased 6.1% over a 52-week period ending April 2024, with beef volume sales dropping only 0.5%. Ground beef, despite a price hike, saw a 1.4% rise in sales.

However, the Meat Institute criticized the USDA’s efforts, arguing that revising the P&S Act would reduce competition and hurt the industry. Meat Institute President Julie Anna Potts said that moving to a commodity cattle market would negatively affect innovation and quality, ultimately harming producers and consumers alike.

In addition to focusing on the meat industry, the USDA is taking steps to lower food prices by improving transparency and supporting agricultural research. These efforts are designed to give farmers access to diverse, resilient seed varieties, further delivering on the goal of more choices and lower costs for both producers and consumers.