President Joe Biden announced plans this week for new rules and $1 billion in funding for independent meat processors and ranchers in an effort to combat what he calls a lack of “meaningful competition” in the meat sector.
The four major meat companies in the U.S.—Cargill, Tyson Foods, JBS, and National Beef Packing—control 55% to 85% of the hog, cattle, and chicken markets. The White House accused these companies of contributing to inflation by raising prices while generating record profits.
“Capitalism without competition isn’t capitalism. It’s exploitation,” Biden said on Monday. “That’s what we’re seeing in meat and poultry industries now.”
The Department of Agriculture (USDA) will spend $1 billion from the American Rescue Plan to help independent meat processors by financing grants, guaranteeing loans, and funding worker training, said Agriculture Secretary Tom Vilsack.
The federal government will also propose rules to clarify the meaning of “Product of USA” meat labels, which companies fudge by raising their cattle abroad and slaughtering them in the U.S.
The net incomes of the four largest meat processors in the U.S. have surged more than 500% during the pandemic and are the biggest contributors to rising costs at the grocery store, according to the White House.
National Chicken Council president Mike Brown, meanwhile, called Biden’s plan “a solution in search of a problem.”
“It’s time for the White House to stop playing chicken with our food system and stop using the meat industry as a scapegoat for the significant challenges facing our economy,” he wrote in a statement. “This administration should be looking at the chicken industry as a model of success, instead of creating a boogeyman to justify an unnecessary and expensive foray into our meat supply.”
But just who are these meat suppliers and how have they come to dominate our farms, slaughterhouses, and grocery stores?
Let’s meet the meat.
JBS, based in Brazil, is the world’s largest meat-processing company. In the third quarter of 2021, the company reported revenue of $17.7 billion, a year-over-year increase of 32%. In 2007, JBS entered the U.S. market by acquiring Swift & Co., the third-largest beef and pork processor at the time. Since then, JBS has acquired Smithfield’s beef business, Cargill’s pork business, and Pilgrim’s Pride, America’s second-largest poultry processor.
But the company’s U.S. plants are some of the country’s biggest polluters. They’ve been the subject of multiple lawsuits for anticompetitive behavior, animal cruelty, environmental harm, and discrimination against Muslims. Nearly four out of five meat products recalled since 2014 came from JBS plants. JBS USA, meanwhile, received more than $90 million in contracts with the USDA since 2018.
U.S. subsidiaries of JBS received at least $62 million from Trump administration farm bailouts while their parent company was one of the biggest winners of Trump’s trade war, signing nearly $13 billion in deals with China.
Brothers Joesley and Wesley Batista, the founders of JBS, who still control a large portion of the company, have paid $3.2 billion in fines for the company’s role in a bribery scandal in Brazil. As part of that settlement, the brothers admitted to bribing more than 1,800 Brazilian politicians with more than $150 million in order to illicitly secure loans and financing from the Brazilian Development Bank. Those loans, U.S. legislators like Republican Sen. Marco Rubio claim, were used by JBS to acquire its American portfolio of companies like Smithfield and Pilgrim’s Pride.
In Brazil, the company has been accused of using cattle that illegally graze in and destroy the Amazon rain forest, and analysis shows that the company’s carbon footprint is nearly as big as the next three closest competitors combined.
JBS, meanwhile, has a number of lobbyists who focus on its interests with the USDA and a political action committee that has donated over $500,000 to candidates and causes.
Tyson is the world’s second-largest meat packer and America’s largest poultry producer.
In its fiscal year 2021, Tyson’s sales of $47 billion increased 8.9% while volume of products decreased 2.8%. That’s likely because the average price it charged for its products grew 13%. That increase wasn’t all due to higher operating costs, as the company’s operating profit margin grew to 9.3% from 7% in fiscal year 2020.
Tyson, meanwhile, has been implicated in a number of recent scandals. The company limited employee breaks to the point where some processing plant workers were forced to wear diapers. It also faced a class-action lawsuit alleging that the company, along with others, engaged in a long-term price fixing scheme that cost average families the equivalent of $330 a year.
During the COVID-19 pandemic, Tyson reportedly incentivized sick workers to stay on the job, stonewalled health inspectors and agencies, underreported positive COVID cases, and lied to interpreters who translate for non–English speaking employees about the dangers of the virus.
Managers at Tyson’s Waterloo, Iowa, pork plant organized a betting pool about how many of their employees would contract COVID-19. Those managers have since been fired.
Through all of this, the Federal Reserve bought Tyson bonds to help prop the company up and provide some financial aid.
The company spent $1.3 million on lobbyists in 2020 and $514,000 on political donations.
Cargill and National Beef Packing
Cargill is among the largest privately held U.S. companies. It often markets and labels its turkey products sold under the Shady Brook Farms and Honeysuckle White brands as being raised by “independent family farmers,” when, in fact, they come from its own corporate-controlled industrial farms.
Meanwhile, Marfrig Global Food, a Brazilian company, owns the majority of National Beef Packing Co., based in Kansas City, Mo. Its parent company has been accused of human rights violations, knowingly destroying the Amazon rain forest, and other environmental violations.
Both companies are the subject of antitrust investigations into whether they artificially raised prices for American consumers.
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