Meatpacking giant JBS agreed to pay a $52.5 million settlement, which U.S. Senator Chuck Grassley says confirms his concerns about limiting supply to drive up prices.
"If there were any doubt about the shenanigans big packers play to line their pockets at the expense of consumers and independent producers, look no further than JBS' $52.5 million settlement in price-fixing litigation," Grassley said in a statement.
Beef prices increased more than 20 percent from 2020 to 2021, according to the Bureau of Labor Statistics. Although the COVID-19 pandemic and general inflation contributed to the price increase, the U.S Department of Agriculture reported that the four largest meatpackers, JBS, Tyson Foods, Cargill and National Beef, control as much as 85 percent of the market, according to The White House Fact Sheet. This power has let them control market prices and drive away the competition.
Wholesale meat distributors and grocery stores accused the conglomerates of working together since 2015 to create a beef shortage to drive up prices, the Associated Press reported.
In a statement, JBS said it would defend against future beef price-fixing claims by future plaintiffs, according to the AP. Instead, the beef processors argued that supply and demand contributed to the price increase.
Colin Woodall, the National Cattlemen's Beef Association (NCBA) CEO, said he found the settlement disturbing.
"It is clear from this settlement that cattle producers still don't have all the information they have demanded and is deserved," Woodall said in a statement.
At the same time, the beef conglomerates experienced labor shortages due to the pandemic. Many plants shut down their facilities while many farmers threw out perishable items and dairy farmers dump more than 3.7 million gallons of milk every day, according to CNBC.
In July of 2021, Biden issued an executive order to look for breaches in the 1921 Packers and Stockyards Act, which regulates fair competition, trade and safe practices to farmers and ranchers, according to the U.S. Department of Agriculture (USDA).
Earlier this year, the White House released a plan to enforce antitrust laws, boosting competition in the meat industry.
"When dominant middlemen control so much of the supply chain, they can increase their own profits at the expense of both farmers—who make less—and consumers—who pay more," the White House said in a statement.
The Biden administration plans to invest $1 billion from the COVID-19 relief package to help reduce meat prices, invest in independent meat processors, train new industry workers and improve working conditions.
A federal reviewed the settlement Thursday and will rule on it at a later date. Additionally, the USDA and the Department of Justice plan to launch a website allowing farmers and ranchers to report concerns regarding competitive behavior.
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