The Biden administration recently met with farmers, ranchers and other stakeholders to discuss the administration’s new plan for a fairer, more competitive meat and poultry supply chain. The action plan has received mixed reviews from agriculture groups across the nation. As an organization heavy with cattle producers, Oklahoma Farm Bureau is appreciative of the Biden administration’s attention and recognition of the issues at hand but cannot support the plan in its entirety.
The action plan focuses heavily on the meat and poultry industry’s market concentration. Four major companies hold a monopoly on the meat-packing industry – a challenge the industry has faced for more than three decades. While the industry is heavily influenced by these major companies, many farmers and ranchers rely on them to sell their livestock.
OKFB does recognize meat packers and processors of all sizes are necessary to ensure an abundant and affordable food supply and appreciates the administration’s plan to support the growth of independent meat processors. This gives producers options when processing their animals and expands job opportunities in rural America.
However, economic pressure has forced many small and midsize processors to close their doors over the last several decades. New facilities as a result of this plan may face the same fate. In addition to economic challenges, new processing facilities could place a strain on an already tight labor market. The plan’s promised $32 million to expand existing meat processing facilities is encouraging, as investing in established businesses that have already weathered a number of storms could be a more sustainable alternative to encouraging the creation of new facilities.
The Biden administration’s plan to reduce the cost of overtime and holiday inspection fees is great news for livestock producers. The availability and cost of meat inspectors historically has been a challenge for small and local processing facilities. The $100-million fee reduction will significantly reduce the processing facilities’ financial burden and could give more livestock producers the option to choose these local facilities when processing their animals.
“Product of the USA” Labeling
Current labeling regulations leave loopholes and room for interpretation when it comes to the definition of “product of the USA.” There is indeed room for regulatory improvement, but the Biden administration’s plan for improvement is equally as vague. Until more details are released and the plan is put in action, it is difficult to know whether the proposed measures will be an improvement on current regulations.
Cattle Market Transparency
While moving toward increased price transparency in the cattle market is a positive change, OKFB policy does not support a government mandate on how meat packers buy cattle as it would also limit how producers sell their cattle.
When it comes to livestock markets, OKFB members have historically adopted policy that aligns most closely with a free-market system. While the Biden-Harris administration’s plan includes several steps in the right direction, markets do not always respond well to governmental manipulation. OKFB expects the issue will be significantly discussed and debated at the upcoming American Farm Bureau Federation annual meeting.