“Big Four” meatpacker CEOs testify in front of congress
By: Sydney Sheffield
The top executives of the four biggest meatpacking companies in the United States faced lawmakers on Capitol Hill, regarding anti-competitive accusations. This is the first time any of the executives provided congressional testimony since the president and some lawmakers accused the companies of unfairly hiking meat prices. The four multinational corporations, National Beef, JBS, Cargill, and Tyson control 85% of the beef industry. The hearings before the House and Senate Agriculture committees are related to two bills designed to provide relief for consumers and ranchers and prevent anti-competitive practices.
“Tyson does not set the prices for either cattle that we buy or beef that our customers purchase,” Tyson Foods CEO Donnie King told lawmakers. “These prices are set by straightforward market forces, namely available supply and consumer demand.”
The “Big Four” CEOs snubbed criticism before the House Agriculture Committee in late April. They instead told lawmakers that the dramatic increases in consumer meat prices are due to pandemic disruptions, labor shortages, inflation, and other factors, rather than any anti-competitive behavior by the four companies, which together control the vast majority of the national market for cattle that are raised for meat.
When asked if there was ever an agreement among the four companies to cooperate on issues of impacting supply or pricing, all denied the allegation. It is worth noting that two of the four companies that testified have recently settled federal price-fixing charges brought by the Justice Department relating to the poultry industry. JBS-owned Pilgrim’s Pride, one of the largest chicken companies in the country, in January pleaded guilty and agreed to pay a $107.9 million fine that it conspired to increase chicken prices and pass those costs on to consumers. Tyson Foods agreed to pay $221.5 million to settle similar price-fixing charges but didn’t admit any wrongdoing.
Not everyone agrees that the consolidation of the industry is the problem. “Rather than blame American business, policymakers should explore other avenues to encourage competition and lower prices for consumers, including expanded energy production, tariff reduction, and regulatory relief,” said Neil Bradley, Executive Vice President, Chief Policy Officer, and Head of Strategic Advocacy at the U.S. Chamber of Commerce. “And they should keep in mind that monetary policy is the best tool to fight inflation.” Bradley also stated that the real reason behind the price increases is COVID-19 supply chain disruptions and increased input costs, especially higher energy, and labor costs.
Representative Glenn Thompson (R-PA), ranking Republican of the House Agriculture Committee, said of the hearings that he was “very disappointed in the way this has come together,” adding that “if there has been collusion, manipulation or other wrongdoing by packers, then the law should be enforced under the existing authorities at the United States Department of Agriculture (USDA) and Department of Justice. Absent such findings, it’s time to stop demonizing the packing industry out of political convenience.”
The House Agriculture Committee will continue to solicit feedback on both bills before it comes to a decision.