Meat Packing Industry Concentration Being Addressed

The US Department of Agriculture has recently released a report that reveals the study findings of the impacts of concentration in the meatpacking industry. Economic Research Services’ James McDonald says that the study looked at mergers from 2016 to 2017 and what the competitive concerns were in the ag industry and the divestitures required for the mergers to go through.

“In 1980 at the top for meatpackers, and maybe 35% of all cattle by 1995. And still today, they handled over 80% of all capital.”

How is that impacting the meatpacking industry?

“What they get paid for wholesale beef and what they pay for cattle did widen considerably since that time. At the same time, we've started to see entry by new packing plants and new firms into the business just in recent years, which is both an indication of market power and a potential solution to it by expanding capacity and offering more competition for current packers.”

The USDA has since launched a partnership between USDA and bipartisan attorneys general in 31 states and the District of Columbia to enhance competition and protect consumers and food and agricultural markets, including grocery, meat and poultry processing markets. This new partnership will assist state attorneys general in tackling anti-competitive market structures in agriculture and related industries that are raising prices and limiting choices for consumers and producers, according to USDA.