Inflation, Biden style
Biden NEC guru Brian Deese explained from the lectern in the White House press room last week that “[i]f you take out” beef, pork and poultry from the calculations of recent retail grocery prices, the “price increases are more in line with a historical norms” (video below). I thought the methodology invited mockery. If you throw out dietary staples, it’s not so bad!
However, Deese cited a report that he had conducted with his colleagues supporting the proposition. This appears to be it: “Addressing Concentration in the Meat-Processing Industry to Lower Food Prices for American Families.” I don’t have the professional competence to assess it. I should leave it to others who do. I will limit myself to a few observations.
The report attributes the price increases to four large conglomerates that “overwhelmingly control meat supply chains, driving down earnings for farmers while driving up prices for consumers.” The industry is alleged to be “highly consolidated” and to serve “as a key choke point in the supply chain[.]” I would prefer a metaphor other than “choke point” when discussing food supply chains, but the authors want to make it sound dire.
According to the report, this consolidation has taken place over the past 50 years and the extent of consolidation varies widely as to each of the three products — the four firms “control approximately 55-85% of the market for these three products[.]” Here is the precise breakdown:
In 1977, the largest four beef-packing firms controlled just 25% of the market, compared to 82% today. In poultry, the top four processing firms controlled 35% of the market in 1986, compared to 54% today. And in pork, the top four hog-processing firms controlled 33% of the market in 1976, compared to 66% today.
For some reason, however, the four food conglomerate have only woken up to their dominance and ratcheted up prices since the election of Joe Biden — the report dates the price increases to December 2020. In his comments last week Deese referred to the double digit price increases of “the last couple of months.” It’s almost funny.
In the Stalin era, they used to call economic saboteurs “wreckers.” The four food conglomerates have been assigned the role of “wreckers” in the Biden regime. For some reason, however, the alleged miscreants go unnamed in Deese’s report. I believe they are Minnesota’s own Cargill, Tyson Foods, Brazil-based JBS, and National Beef Packing.
Rest assured that the Biden-Harris administration is on the case. Reuters reports “Biden administration plans tougher action to rein in meat prices”— “tougher action” being antitrust enforcement. In other words, assuming the report is on the money, relief is not in sight any time soon.
But that’s not all! The report itemizes other remedies in addition to antitrust enforcement. Each of us will have his own favorite. This is mine (emphasis in original, link omitted):
• Getting ahead of climate change related disruptions by supporting farmers and ranchers from the effects of extreme weather.
Unprecedented drought and extreme weather events have brought new challenges for farmers, ranchers, and agricultural workers, on top of the historic challenges associated with the COVID-19 pandemic. To respond to the drought affecting farmers and ranchers across the West and Midwest, USDA will expand its Emergency Assistance for Livestock, Honeybees and Farm-Raised Fish Program (ELAP) to include the cost of transporting feed, delivering much-needed relief to affected livestock producers.
As the man says in Monty Python’s Life of Brian: “Silence! What is all this insolence?”
David Goldman takes up the big picture in the Asia Times column “It’s the inflation, stupid.” Monty Python to the contrary notwithstanding, it’s not funny after all.
