It may appear that supermarkets sell a wide variety of beef and meat products, however, this is not the case. Most of this meat comes from a small number of companies, four to be exact. These four companies control 84 percent of cattle slaughter. JBS USA, Tyson Foods Inc., Cargill Inc. and National Beef Packing Company are the four companies in question.
In recent months the U.S. Agricultural Department has made a statement regarding the consolidation of the beef production sector. The issue was brought to their attention after the temporary closures of massive beef plants at the start of the COVID-19 pandemic. The closures resulted in beef shortages and caused major supply chain issues. Furthermore, a cyber attack which was detected less than a year later caused even more problems. Nearly a quarter of America’s beef production came to a halt which really highlighted vulnerabilities in the country’s meat supply chain. This level of consolidated power has massive effects on producers, distributors, workers, consumers and animals.
When the meat plants close, meat supplies tighten and ranchers are left with cattle that would be otherwise sold off. The result is a contradictory situation in which cattle prices lower while beef prices increase.
To combat the problem, an executive order has been issued to tackle corporate consolidation across a range of industries, including agriculture. To coincide with this, the USDA released a plan to increase competition and fairness in the meat and poultry industries.
Throughout the nation, at least five new processing plants have opened or are planned following supply shocks as mentioned above. Existing plants are expanding which has set slaughter capacity to increase by 5%. According to Reuters, smaller plants will need to differentiate themselves in order to compete with industry titans on volume or low prices.
The order is a major win for the National Farmers Union and other groups who have struggled for years to get policymakers and administrations to act on the matter and consider the impacts of consolidation on rural communities and farmers. However, there is no doubt that these changes will take time and rewards of this reform will be seen later down the line.
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