President Joe Biden signed a wide-ranging executive order recently that seeks to address consolidation throughout the economy and includes a special focus on actions the Department of Agriculture could take to address the meat industry and antitrust enforcement. The order includes 72 initiatives under 12 different agencies.
However, his administration still has a lot of work to do to deliver on his promised relief. It remains to be seen if the Biden administration will be able to make more progress on these efforts than when he served as vice president under President Obama.
Some of you may remember that Obama made a similar push to address competitive issues in agriculture. In 2009, the U.S. Departments of Justice and Agriculture announced the dates for a series of five public workshops to discuss competition issues affecting the agricultural sector and the appropriate role for antitrust enforcement. The first one was held in March of 2010 in Ankeny, Iowa, and over 700 people attended. Other events were held in Alabama, Colorado, Wisconsin and Washington, D.C.
This time around, Biden has yet to schedule any public workshops, but his announcement builds on many familiar themes from the 2010 events. In addition, his new order establishes a White House Competition Council, led by the Director of the National Economic Council, “to monitor progress on finalizing the initiatives in the Order and to coordinate the federal government’s response to the rising power of large corporations in the economy.”
In particular, the order will require the department “to consider issuing new rules under the Packers and Stockyards Act (PSA) making it easier for farmers to bring and win claims, stopping chicken processors from exploiting and underpaying chicken farmers, and adopting anti-retaliation protections for farmers who speak out about bad practices,” according to a fact sheet released July 9 by the White House.
"Big ag is putting a squeeze on farmers," Biden said in signing the order. "Small and family farms, first-time farmers — like veterans coming home and Black and Latino and Indigenous farmers — they're seeing price hikes for seed, lopsided contracts, shrinking profits, and growing debt."
Corporate consolidation has been bad for farmers and ranchers, limiting their options when it comes to selling their products, the White House says. “That means they get less when they sell their produce and meat — even as prices rise at the grocery store.”
As an example, the fact sheet cited the “Big Four” meatpacking companies — Tyson, JBS, Cargill and National Beef — without mentioning them by name.
“Four large meatpacking companies dominate over 80% of the beef market and, over the last five years, farmers’ share of the price of beef has dropped by more than a quarter — from 51.5% to 37.3% — while the price of beef has risen,” the fact sheet says.
At a press conference in Iowa last week, Agriculture Secretary Tom Vilsack said the department would move "aggressively" to adopt new rules to improve the poultry grower ranking system, which is used to determine the prices growers receive for their flocks. Regarding changes in the P&S Act, he said USDA would also be acting as swiftly as it can "to draw clear and bright lines" on what constitutes an unfair practice.
He said it should not be necessary for producers to show harm to the entire industry, which he called "virtually an impossible standard."
In addition, Biden’s order encourages the Federal Trade Commission “to limit powerful equipment manufacturers from restricting people’s ability to use independent repair shops or do DIY repairs — such as when tractor companies block farmers from repairing their own tractors,” addressing an issue commonly known as “right to repair.”
Industry reaction has been mixed. The American Farm Bureau Federation’s president, Zippy Duvall, said the order addresses several pressing issues for farmers. He noted “the continued rise in grocery store meat prices while ranchers struggle to break even on the cattle they raise and poultry farmers [are] locked into agreements with very little recourse if they’re underpaid. It’s time to get to the bottom of what’s driving these imbalances.”
National Farmers Union President Rob Larew called the order a “monumental step towards a fairer economy.
“After suffering corporate abuse for so many years, it is reassuring that farmers may finally get a level playing field. This executive order will offer them more autonomy in their relationships with corporations, protections from mistreatment, fairer and more accurate labeling, the right to repair their machinery, and more robust local markets — which, taken together, will go a long way towards building the resilient, equitable food system that farmers and consumers deserve,” Larew said.
But National Chicken Council President Mike Brown said his industry is “one of the least consolidated” in U.S. agriculture, and he called the order “surprising,” given Biden’s “long history of support for the chicken industry.”
"This looks like a solution in search of a problem. The chicken industry is a model of success — from farm to table — and one of the least consolidated industries in animal agriculture," Brown said. "Chicken companies have waiting lists of potential family farms that want to partner with them and enter into the chicken business."
The North American Meat Institute said Biden’s executive order to change the Packers and Stockyards rules will have “unintended consequences for consumers and producers.”
“Government intervention in the market will increase the cost of food for consumers at a time when many are still suffering from the economic consequences of the pandemic,” said Meat Institute President and CEO Julie Anna Potts. “These proposed changes will open the floodgates for litigation that will ultimately limit livestock producers’ ability to market their livestock as they choose. These proposals have been considered and rejected before and they are counter to the precedent set in eight federal appellate circuits.”
The United Food and Commercial Workers International Union, was quick to praise the new order. UFCW International President Marc Perrone, who joined Biden at the White House for the signing of the order, said “today’s action puts workers and consumers first by strengthening oversight of meatpacking monopolies that suppress wages and drive up food prices at the grocery store.
"With stronger country-of-origin labeling for food, this executive order supports American jobs and protects the right of consumers to know where their food is from, whether it’s safe, and if it’s produced by American workers,” he added.
Editor’s note: Agri-Pulse Associate Editor Steve Davies contributed to this report. Wyant is president and founder of Agri-Pulse Communications Inc. For more news, go to www.Agri-Pulse.com.