USA to Press for More "Made in America" Meat

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In politics, red meat famously refers to populist campaigning or sloganeering that riles up supporters. For today's purpose, it means nothing more than an honest-to-god slab of beef.

On Monday, the US government announced it's launching a crackdown on America's biggest meat producers that will include stronger "Made in America" labeling rules, and that it's putting up $1 billion to help independent meat and poultry producers fight inflation.

In For a Grilling

Meat in America is big business, and yet it's more heavily concentrated than an orange beef sauce. According to the White House, four companies — Tyson, JBS, Cargill, and National Beef — purchase and process 85% of the beef in the US.

That has left livestock farmers with little or no choice of who they can sell to, something the White House says gives them no room to negotiate. The result of this monopolization in the meat-processing industry, the Biden administration has argued, is excessive meat prices that companies use to pad their pockets:

  • In November, the price index for meats rose 16% year over year, according to the Bureau of Labor Statistics, or more than double the 6.8% rise in the overall consumer price index.
  • Tyson made $1.4 billion in profit in the fourth quarter of 2021, more than twice what it made in 2020, and the company's beef sales totaled a record $5 billion in the quarter even though it sold 15% less product.

What is to Be (Well) Done? In an effort to kick-start more competition, the government plans to give $1 billion from Covid relief funds to independent meat and poultry processors, arguing that more competition reduces inflation by making it harder to raise prices. Washington is also moving to make it harder to label something a "Product of USA" if it relies on imports in the production process, which the major meatpackers do by bringing in meat from abroad and processing it on US soil. One catch: the fallout from that could set ablaze the tempers of America's trading partners well above a nice 225°F charcoal grill temperature.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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