Unless you have been living solely off the land you have been hard hit by rapidly inflating grocery prices. These prices have been soaring for months. While the pandemic has been a root cause behind this, President Biden and the failure of an infrastructure plan led by Pete Buttigieg have only complicated matters even further.
White House Press Secretary Jen Psaki has been using these points to place the blame squarely on the meat industry from the get-go. It’s as if she is under the belief that inflation is based around the price of meat, even though it’s the meat industry as a whole that has its pricing and is deeply affected by the prices of other goods. Beef and dairy cattle as well as pigs and chickens are all highly reliant on grain, corn, and soy for their main sources of nourishment. Changes in those industries greatly impact the bottom line of meat prices.
Yet this past Tuesday, Psaki took an opportunity to reiterate her belief that the meat industry is the root cause for inflated prices due to their practices. “Just four large conglomerates control the majority of the market for beef, pork, and poultry products, and the data show … that there have been increases in meat prices while the companies have generated recent record profits. If you look at historical precedent here, 50 years ago ranchers got over $0.60 for every dollar a family spent on beef. Today, they get about $0.39. 50 years ago, hog farmers got $0.40 to $0.60 for each dollar they spent. Today, it’s about $0.19, and the big companies are still making major profits.”
While she has a minor point because competition is healthy, it doesn’t have the trickle-down effect that she loves to believe in. This insane inflation is a result of declining infrastructure, ever-increasing inflation, and a ripple effect of previous hiccups in production as a result of COVID. The meat industry as a whole does have a problem with monopolization, however, the prices are felt even at the lower levels when consumers are purchasing a half or whole cow from ranchers to stockpile their freezers.
Costs for things like grain, veterinarians, electricity, employee wages, and equipment all cause the prices to the consumer to increase. Meat markets that break down the animal for consumer purchase are also seeing these inflated costs and have little to no choice but to pass the costs along to the consumer. While the large companies are making a hefty profit as she eluded to, a large chunk of that is from their ability to hire out foreign nationals for the bulk of the work and their refusal to pass the savings on. This is a direct result of policies instituted under Obama that Trump tried to slash but to little recourse.
Other companies like Nestle, Pepsi, and General Mills are also having to raise costs due to the shortage in labor and increased wages due to inflation. These costs must come from somewhere, and these companies (like the major meat producers) have to account for that too. Investors aren’t going to keep their money with companies that start turning a sharp decline in profits or even a loss to keep prices low. They want to make a profit on their investments, and that is, yet again, passed to the consumer.
If Psaki and her boss want to see prices going down, they need to find a way to get this inflation under control. Finding ways to make more with less, and improving the infrastructure is a great start. Stemming the flow of meat across to places like China for processing just to have it shipped back here is another. Curbing the rate of inflation here in the U.S. starts with the emergence of more self-reliance. Something this president seems to have forgotten all about.