By: Brian Deese, Sameera Fazili, and Bharat Ramamurti
The Biden Administration has been working at every level to address supply chain issues that are affecting prices. Many such issues are related to the pandemic—like changes in demand patterns, bottlenecks, or shutdowns. But for some price increases affecting Americans, there’s another culprit: dominant corporations in uncompetitive markets taking advantage of their market power to raise prices while increasing their own profit margins. Meat prices are a good example.
In September, we explained that meat prices are the biggest contributor to the rising cost of groceries, in part because just a few large corporations dominate meat processing. The November Consumer Price Index data released this morning demonstrates that meat prices are still the single largest contributor to the rising cost of food people consume at home. Beef, pork, and poultry price increases make up a quarter of the overall increase in food-at-home prices last month.
As we noted in September, just four large conglomerates control approximately 55-85% of the market for pork, beef, and poultry, and these middlemen were using their market power to increase prices and underpay farmers, while taking more and more for themselves. New data released in the last several weeks by four of the biggest meat-processing companies—Tyson, JBS, Marfrig, and Seaboard—show that this trend continues. (Other top processors are private companies that don’t report publicly on their profits, margins, or income.) According to these companies’ latest quarterly earnings statements, their gross profits have collectively increased by more than 120% since before the pandemic, and their net income has surged by 500%. They have also recently announced over a billion dollars in new dividends and stock buybacks, on top of the more than $3 billion they paid out to shareholders since the pandemic began.
Read Complete Article HERE