Day: January 3, 2022

The United States will issue new rules and $1 billion in funding this year to support independent meat processors and ranchers as part of a plan to address a lack of “meaningful competition” in the meat sector, President Joe Biden said on Monday.

The initiative comes amid rising concerns that a handful of big beef, pork and poultry companies have too much control over the American meat market, allowing them to dictate wholesale and retail pricing to profit at the expense of their suppliers and customers.

“Capitalism without competition isn’t capitalism. It’s exploitation,” Biden said. “That’s what we’re seeing in meat and poultry industries now.”

A recent White House analysis found that the top four meatpacker companies – Cargill, Tyson Foods Inc., JBS SA and National Beef Packing Co. – control between 55% and 85% of the market in the hog, cattle and chicken sectors.

The Department of Agriculture (USDA) will spend the $1 billion from the American Rescue Plan to expand the independent meat processing sector, including funds for financing grants, guaranteed loans and worker training, said Agriculture Secretary Tom Vilsack, who was speaking at an event with Biden.

USDA will also propose rules this year to strengthen enforcement of the Packers and Stockyards Act and to clarify the meaning of “Product of USA” meat labels, which domestic ranchers have said unfairly advantage multinational companies that raise cattle abroad and only slaughter in the United States.

Attorney General Merrick Garland, also speaking at the event, said “too many industries have become too consolidated over time,” and that the antitrust division of the Department of Justice has been chronically underfunded.

The Biden administration issued an executive order last year that advocated a whole of government approach to antitrust issues.

A central concern in agriculture has been meat prices, which have risen at a time when the White House is fighting inflation. An analysis in December by the White House economic council found a 120% jump in the gross profits of four top meatpackers since the pandemic began.

Reaction to plan

The meat industry has said the White House analysis was inaccurate and criticized the new plan.

National Chicken Council President Mike Brown called the plan “a solution in search of a problem.”

North American Meat Institute spokesperson Sarah Little said staffing plants remains the biggest issue for meatpackers and that the White House plan would not address it.

“Our members of all sizes cannot operate at capacity because they struggle to employ a long-term stable workforce,” she said. “New capacity and expanded capacity created by the government will have the same problem.”

Eric Deeble, policy director at the National Sustainable Agriculture Coalition, cheered the plan, calling it a “very positive step to ensure farmers and ranchers receive fair prices.”

The anticipated rulemaking under the Packers and Stockyards Act “could have a significant impact,” said Peter Carstensen, emeritus professor of law at University of Wisconsin-Madison and former antitrust attorney at the Department of Justice. But he noted that investment in independent processing itself would not address market concentration.

Austin Frerick, deputy director of the Thurman Arnold Project at Yale University, an antitrust research center, said the plan does not go far enough to tackle the power of the top meatpackers.

Source: Voice of America

Global stocks began 2022 in bullish fashion, with major bourses notching records and Apple’s valuation briefly hitting $3 trillion as investors monitor the COVID-19 pandemic and looming central bank rate decisions.

The CAC 40 index in Paris kicked off the rally with new intraday and closing records while Frankfurt’s DAX rose 0.9 percent in thin holiday trading. London and Tokyo were among global markets that were shuttered for holidays.

On Wall Street, both the Dow and S&P 500 ended at records as indices pushed higher.

Apple briefly climbed to $3 trillion in value, becoming the first U.S. company to hit that benchmark. The tech giant’s valuation later retreated, though its share price was 2.5 percent higher at the close.

“Welcome to 2022, which is looking like 2021 so far for the equity market,” market analyst Patrick O’Hare at Briefing.com said.

The market “looks as if it will keep riding the rails with the help of new inflows that are typically seen on the first trading day of a new month,” he added.

Monday’s landmarks come on the heels of a series of all-time highs in December as markets continue to bet the latest surge in COVID-19 cases won’t derail economic growth.

Comments from health experts characterizing the omicron variant as less lethal than earlier COVID-19 strains have boosted markets.

A bigger question mark is the shift in monetary policy, with investors now betting that the Federal Reserve will raise interest rates later this year.

The yield on the 10-year U.S. Treasury note vaulted above 1.6 percent Monday, the latest indication of this expectation.

A note from Briefing.com said the rise in yields may also reflect “an improving perspective on the economy.”

Oil prices

Elsewhere, oil prices finished a volatile session higher as eyes turn to the meeting of OPEC and other major producers on Tuesday.

So far OPEC+ has resisted pressure by top oil-consuming nations, such as the United States, to more aggressively boost production.

The 23 members of OPEC+ are expected to continue to stay the course and modestly boost output at their monthly meeting to be held via videoconference.

Source: Voice of America