Bob Neal

President Joe Biden, trying to take the edge off our inflationary spiral, has gone after the meat and poultry industries. His target is worthy, but his tools and his aim are lousy.

Biden told a gathering Monday at the White House, “Capitalism without competition isn’t capitalism. It’s exploitation.”

He correctly pointed out that four corporations control 82% of beef production, four control 62% of pork production, and four control 54% of poultry production. Those figures might make even the 1890s robber barons salivate with envy.

Biden’s proposals aim not to cut the big boys down to size but to build up the little guys. His plan to spend nearly $1 billion to boost small producers won’t make a ripple. A billion bucks used to look like a lot of money. But the profits of Tyson Foods, the largest player in meat and poultry, were more than $6 billion last year. What the administration plans to spend from the American Rescue Plan is chump change to John Tyson.

If Biden’s planned $275 million in capital were spread evenly among our 233,000 poultry farms, each farm would get about $1,200, not enough to build many independent hatcheries, calf-breeding farms or abattoirs. I spent about $100,000 to build and update my slaughterhouse, over 25 years, which I’ve been told today would cost $250,000.

More sensible than throwing money at small producers might be to return to the trust-busting ways of Teddy Roosevelt. (The more I read of him, the more I marvel at how the Republican Party has changed.) None of the corporations that TR went after was driven out of business, but all learned to live in a competitive market.

Standard Oil (John D. Rockefeller) had to spin off some companies in 1911, and the breakup created competition in the oil business. In the 1950s, my mother would drive half a mile to a Texaco station for gas at 18.9 cents a gallon, passing a Shell station at 19.9. Today, a similar price spread would be 17 or 18 cents a gallon.

TR also went after American Tobacco successfully and U.S. Steel less successfully.

Irony. Most of the Standard Oil spinoffs have reunited as ExxonMobil. That’s at least partly because of lax enforcement of anti-trust laws that began with — take your pick — Ronald Reagan (radio, TV), Jimmy Carter (airlines), Bill Clinton (almost everything else). Neither the George Bushes nor Barack Obama showed any interest in breaking up the biggies, and despite his strong words, Biden probably has no such intention, either. Delaware is a big chicken state.

Direct subsidies are not a solution to any problem except lack of votes or a corporation’s “need” for more money. The only exception I know is the “infant industry,” when a legislature finds societal benefit in a new process or product and helps pay to develop it. As Maine and the feds are doing with solar and wind energy.

The issue with the infant-industry idea is deciding when the infant can get off the baby bottle. Canada subsidized Nova Scotia’s steel industry long after it ceased profitability, as Cape Breton’s coal seams played out. Ottawa finally couldn’t justify the subsidies, and the mill closed in 2001. Meanwhile, Canadians subsidized a money-losing mill for decades.

Not all of the price increase can be laid at the feet of meat and poultry consolidation. We may just have to get used to paying more for protein. Meat industry wages have risen during corona to $22 an hour from $14.50. When I work through the math, $7.50 an hour for more than 400,000 meat and poultry workers totals $6.4 billion a year. That adds about 24 cents to the price of a pound of red meat or poultry. Beef prices have risen since March 2020 by more than 24 cents a pound, but poultry rose near or below 24 cents.

Having worked some 500 days on the “kill floor” of a slaughterhouse — we killed birds 15-20 days a year for 30 years — working ankle deep in you-don’t-wanna-know-what, I deeply appreciate the difficulty of meat packing.

The work is hot — we scalded carcasses at 138 degrees — and cold — wind blows through the plant in December, stiffening fingers and icing toes — and, often, both. It is messy, with that you-don’t-wanna-know-what flying about (toward waste pails). And it is intense when you kill 325 birds a day, mostly by hand.

In a time when millions of employees are quitting their jobs — 4.5 million quit in November alone — to find something better, big meat packers have had to raise wages to keep people on the line. And to find new people as COVID-19 has spread through the meat plants. Would you do it for $22 an hour?

Getting at the statistics is difficult, at best. Of the 400,000-plus people working directly in meat and poultry processing, 59,000 contracted the coronavirus in the first year. That’s 15%. Maine and five other states haven’t reached 15% infection rates nearly a year later.

That’s a steeper price for your Big Mac than just 24 cents a pound.

Bob Neal’s solution to high meat prices is to grow his own veggies so he can buy meat directly from farmers. Better meat, better for the environment, better for the farmers. Neal can be reached at [email protected].


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