Meat Supply (copy)

Virginia-based Smithfield Foods closed its Sioux Falls meatpacking plant ‘until further notice’ amid numerous confirmed COVID-19 cases at the site. It was one of many things that happened during the coronavirus pandemic that exposed a brittle food supply chain. 

Concentration of the U.S. meatpacking industry has been building up for more than 30 years, but the COVID-19 pandemic helped throw the system into harsh light and showed it to be brittle, fragile and far more concentrated than healthy competition should allow.

That has prompted a plethora of bipartisan legislation at the congressional level, and the MonDak’s lawmakers have been front and center on many of the bills.

On the Montana side, Democratic Senator Jon Tester and Republican Senator Steve Daines co-sponsored the New Markets for State-Inspected Meat and Poultry Act, which would allow state Meat and Poultry Inspection (MPI) programs to sell across state lines.

State-inspected meat and poultry facilities are required to be at least equal to federally inspected processing facilities. Twenty-seven states, including North Dakota and Montana, already operate MPI programs. Existing law restricts products inspected by MPI programs to intrastate sale.

“Montana’s farmers and ranchers produce the best beef and poultry in the world, so it only makes sense that they should be able to sell their products to folks across state lines who want to buy it,” Tester said. “This bill gives consumers more choices at the grocery store, and will open up access to new markets and revenue for Montana’s hardworking farmers and ranchers.”

Tester also joined forces with Republican Senators Chuck Grassley of Iowa and Mike Rounds of South Dakota on legislation that would create a special investigator at USDA, with subpoena power, to look into anticompetitive practices in the meat and poultry industries and enforce antitrust law.

The Meat Packing Special Investigator Act would establish a team of investigators that would coordinate and act in consultation with the Department of Justice and Federal trade Commission. The legislation also creates a bridge between USDA and Homeland Security to protect the continuation of the food supply and increase national security.

Daines and Tester, meanwhile both signed onto a letter from 28 senators that urged Attorney General Merrick Garland to investigate whether the meant packing industry has violated antitrust laws or principles of fair competition.

“In the last several years, the price of live cattle in the United States market has plummeted, while the price of boxed beef has significantly increased, raising consumer prices at the grocery store,” the letter reads in part. “Concurrently, the major packing companies realized significant profits, while both U.S. beef consumers and independent cattle producers paid the price. These large price disparities are leading independent cattle producers to go broke and causing consumers to pay an unnecessary, over-inflated premium on beef.

On the North Dakota side, meanwhile, Republican Senators John Hoeven and Kevin Cramer have also pressed Garland to investigate the meatpacking industry.

The lawmakers have both also helped re-introduce the Processing Revival and Intra state Meat Exemption or PRIME Act, which would extend an existing exemption, on meat that is for personal consumption from federal inspection, applying it to intrastate sale of meat to households, restaurants, hotels, boarding houses, grocery stores and other establishments within the custom slaughterhouse's state.

That bill is co-sponsored by U.S. Senators Angus King I-Maine and Rand Paul, R-KY.

Cramer said he supports multiple bills aimed at addressing problems in the meatpacking industry, including the New Markets for State-Inspected Meat and Poultry Act of 2021 and the Strengthening Local Processing Act, which would give small food processors more access to information that is critical to food safety planning, lower barriers to entry for small meat processing plants, and establish training, education, and technical assistance grants for meat processing trades such as small plant operators and butchers.

Cramer also sent a letter to Senate Agriculture Committee Chairwoman Debbie Stabenow, D-MI and Ranking Member John Boozman, R-AR, to urge them to convene a hearing to examine legislative proposals that will improve transparency and competition in the meatpacking industry.

“Four companies, two of which are foreign-owned, control ~85 percent of the beef processed in the United States,” Cramer said. “These companies are uniquely situated to control the input of cattle they buy from ranchers through the four primary transaction types, and based on those controlled inputs, control the supply available to downstream purchasers. Put simply, when adequate price discovery is not present, packers have the ability to suppress the value of cattle while increasing the price downstream to the consumer.”

The Biden administration, meanwhile has directed via Executive Order that federal departments including USDA find ways to strengthen America’s food supply chain.

USDA recently announced more than $5 billion in investments to strengthen the food supply based on that order. Among key priorities, Agriculture Secretary Tom Vilsack said, will be ensuring that America’s food system is fair, competitive, distributed and resilient, and that producers receive a larger share of the food dollar.

“The COVID-19 pandemic led to massive disruption for growers and food workers. It exposed a food system that was rigid, consolidated, and fragile. Meanwhile, those growing, processing and preparing our food are earning less each year in a system that rewards size over all else,” said Agriculture Secretary Tom Vilsack. “The Build Back Better initiative will make meaningful investments to build a food system that is more resilient against shocks, delivers greater value to growers and workers, and offers consumers an affordable selection of healthy food produced and sourced locally and regionally by farmers and processors from diverse backgrounds.”

Vilsack said USDA would also seek to increase transparency and competition, with particular attention to how certain types of conduct in the livestock market and the meat processing sector have led to thinly traded markets and unfair treatment to farmers, ranchers and small processors.

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