Vilsack questions record meatpacking profits, NAMI counters
Ag Secretary Vilsack tells Brownfield arguments that the meat processing industry’s higher prices are tied to inflation and labor shortages don’t explain record profits.
“These processors had record profits, record dividends, record stock buybacks,” he says. “It’s a little inconsistent with that this is caused by something other than making a pretty good return on this.”
Sarah Little with the North American Meat Institute tells Brownfield packer concentration has been nearly the same for 30 years and recent beef price increases are more closely tied to inflation.
The Meat Institute says none of the proposals brought forth in last week’s White House report will alleviate consumer price increases and a recent USDA Economic Research Services report on food prices did not identify industry structure as a price driver but also pointed to inflation as a major factor in overall food costs with high feed costs, increased demand, and changes in the supply chain specifically driving beef and dairy prices.
Vilsack says he continues to hear from producers that are losing money raising cattle and the White House is calling for fair prices for farmers and consumers.
“You can’t have a situation where farmers are losing money and consumers are paying more, and the processors in the middle are making record profits,” he says.
While the Meat Institute has been meeting with White House officials for the past several months, Little says they never suggested consumer prices were rising because of industry structure.
The Meat Institute also points to recent House and Senate Ag Committee hearings on cattle and beef markets in a letter to Vilsack which they say also did not tie rising consumer prices to the structure of the industry.
Vilsack is calling for the Packers and Stockyards Act to be strengthened along with improved price discovery, and more processing capacity.