Remarks by President Biden During a Virtual Meeting to Discuss Boosting Competition and Reducing Prices in the Meat-Processing Industry
South Court Auditorium
2:28 P.M. EST
THE PRESIDENT: Hello, folks. How are you? Welcome. Welcome. I wish you were here in person. One of these days, we’re going to be able to do that again. I want to thank you for joining us, and Happy New Year.
And before we begin, I want to say a word about where our economy stands today.
We’re entering 2022 in a position of a unique economic strength: Six million new jobs –- a record number for a new President — have been created since January last. Unemployment is down to 4.2 percent, three years ahead of predictions. New small-business applications are up over 30 percent compared with before the pandemic. And the fastest growth in America in nearly 40 years.
And America is the only leading economy in the world where the economy as a whole is stronger than it was before the pandemic, even after accounting for price increases.
Because — because we took action for the American Rescue Plan and the Bipartisan Infrastructure Law, we’ve made important progress: We’ve begun to change the trajectory — to change the trajectory of our economy — the one that we inherited — to finally make it work for working people, to build up from the bottom up and the middle out, and to give working people the wages and benefits they deserve, and to encourage more innovation and faster growth.
So now, we’re in a strong position to address the challenge we face — and we have challenges — including the cost and prices that people have to pay.
We already laid out three — a three-part plan to address costs that families are facing.
Number one, fix the supply chains. We’re going to have another discussion on that in a couple of weeks with the Secretary of Agriculture.
Protecting consumers — number two.
Three, lowering kitchen table costs, including with my Build Back Better Plan.
But today, we’re here to talk about strengthening competition, which will bring down costs.
Back in July, I signed an executive order to promote competition across the economy. In too many industries, a handful of giant companies dominate the market. And too often, they use their power to squeeze out smaller competitors and stifle new entrepreneurs, making our economy less dynamic and giving themselves free rein to raise prices, reduce options for consumers, or exploit workers.
The meat industry is a textbook example on the price side.
Four big corporations control more than half the markets in beef, pork, and poultry. These middlemen that they buy from — farmers and ranchers — and sell the processors — excuse me — and sell the process — excuse me, sell the processed product to grocery stores. That’s the — that’s the way it works.
Without meaningful competition, farmers and ranchers don’t get to choose who they sell to. Or put another way, our farmers and ranchers have to pay whatever these four big companies say they have to pay, by and large. But that’s only half of it.
These companies can use their position as middlemen to overcharge grocery stores and, ultimately, families.
If you can hold a second, I was just — I was telling the — my colleagues early be- — in my office that I was sitting in my kitchen yesterday and there’s a sunroom off the kitchen. And my wife was there with her sister and a good friend named Mary Ann. And she was saying, “Do you realize it’s over $5 for a pound of hamburger meat — $5?”
Well, this is partly — you know, the pound of beef today cost five bucks compared to less than four bucks before the pandemic.
And here’s some historical context: Fifty years ago, ranchers got over 60 cents for every dollar a family spent on beef. Today, they get about 39 cents. Fifty years ago, hog farmers got 40 to
50  cents for each dollar they spent. Today, it’s about 19 cents. And the big companies are making massive profits.
While, their profits go up, the prices you see at the grocery stores go up commensurate and the prices farmers receive for the products they are bringing to market go down.
This reflects the market being distorted by a lack of competition.
I’ve said it before and I’ll say it again: Capitalism without competition isn’t capitalism; it’s exploitation.
That’s what we’re seeing in meat and poultry — in those industries — now. Small, independent farmers and ranchers are being driven out of business — sometimes businesses that have been around for generations. It strikes at their dignity, their respect, and the family legacies so many of them carry for generations after generation.
So, I’m here with Secretary of Agriculture Tom Vilsack, former governor of the state of Iowa, and Attorney General Gar- — Garland to talk about how we can create fairer markets and more opportunities for family farmers and ranchers and bring down the price at grocery stores.
There are four pieces of our action plan.
First, we’re going to invest $1 billion in new and expanded meat and poultry processing capacity — funding that was included in the American Rescue Plan to revive our economy.
To bring down — to bring in more competition and dignity and more farmers, ranchers, and customers, we’re going to invest in new and innovative small businesses and meat processors — the lifeblood of our economy.
And when we do this, we’ll give farmers and ranchers more options beyond giant processing conglomerates, shore up the weak points in our food supply chain.
Secretary Vilsack will share some about this very shortly.
Second, we’re strengthening rules to protect farmers, ranchers, and other producers. For example, the Department of Agriculture is rewriting the rules under the Packers and Stockyards Act — which was the law back in the ’20s that was needed at that time and is still needed to protect farmers and ranchers from abuse by processors. The last administration weakened that law, making it possible for the abuse that we’re seeing now. We’re going to strengthen the law to make sure it works as intended.
Third, the United States government — my administration — will enforce existing competition laws vigorously and fairly. My executive order on competition established a whole-of-government approach to increasing competition.
And our new White House Competition Council, chaired by the head of my National Economic Council, including members — and Brian is here today — including members of the Cabinet and other key agency officials — like the Secretary of Agriculture, the Attorney General, the Secretary of Labor, the head of the Federal Trade Commission –- they’re all there to make sure that antitrust laws are enforced across the board.
Today, the Justice Department and the USDA announced a joint initiative to make it easier for farmers and ranchers to report potentially illegal practices in the agricultural sector. Attorney General Garland will discuss this more.
Fourth, we’re bringing greater transparency to the industry. A free market isn’t truly free without transparency around prices. How do you justify the price? And right now, that’s largely disappeared in the cattle market: transparency.
Back in August, the Department of Agriculture took steps to address this, and we’re going to keep pushing.
And I’m pleased to see that Congress is taking action as well to increase competition and fairness, with a bipartisan group of senators now working on legislation to make cattle markets more transparent.
And all these issues — all these issues are areas where we can and we must come together in a bipartisan way.
And I’m grateful to the members of the Democratic and Republican administra- — of — members of Congress for being willing to come to the table.
Senator Jon Tester and Senator Grassley of Iowa — Tester is from Montana — have been leaders in this effort.
And I’ll be inviting a bipartisan group to come together to discuss how we can make progress legislatively as well, as they’re proposing, even as we continue doing everything we can on the executive branch side.
Strengthening competition is good for all of us: farmers and ranchers who deserve a fair shake; American families facing high prices at grocery stores who deserve a fair price to put food on the table; rural communities, which see more good jobs when there’s more competition; and our economy as a whole as we make our food supply chains more resilient.
I’m looking forward to hearing from the farmers, ranchers, and processors joining us today. We’re going to ensure that you have the tools you need and the level playing field you deserve.
And we’re going to fight for fair prices for American farmers, ranchers, and families — all three.
With that, I’m going to turn it over to Secretary Vilsack.
Tom, the floor is yours.
SECRETARY VILSACK: Mr. President, thank you very much. And certainly, as I traveled around the country, I’ve heard sad stories of farmers and farm families who’ve had to leave this business because of a lack of competition.
Your executive order on competition challenged us at USDA to take immediate action and to develop a set of tools to expand processing capacity, increase competition, improve farm income, and create good-paying jobs in rural America. And we went to work.
And because of your American Rescue Plan, we have the resources to be able to do meaningful work, committing over $1 billion, broken down as follows:
$100 million is going to be utilized to reduce the cost of inspections for existing small and very small processing facilities. This is going to help us maintain the capacity we have.
$32 million in grants were awarded to 167 existing facilities to modernize their operations, to allow them to expand their opportunities beyond the state border to engage in interstate commerce. This is going to expand market opportunity and income opportunities for these processors.
$100 million in available loan guarantees to address the middle-level supply chain challenges that this industry faces — from cold storage, warehousing — and also allowing these facilities to expand their operations as well. We believe this $100 million will leverage nearly a billion dollars of investment.
And the announcement today we make is an $800 million commitment of grants and loans to address capacity, workforce, and innovation challenges the industry faces. We’re going to make available, Mr. President, $375 million in grants for expanded facilities and new construction of new facilities.
Now, we want to get to work right away because farmers have been waiting a long time for this help. So, $150 million of this resource is going to be made available under a Request for Proposal that we’ll file this spring. These resources will be made available to projects that are just about ready to get going but just need a little bit of help to accelerate the implementation plan.
So, this $150 million, we believe, will help to sponsor at least 15 new projects that will complement — expand along the 50 facilities that you mentioned earlier that the major four companies currently have. So, it’s a significant step forward.
$225 million of grants will then be made available this summer for products and for projects that are just getting started that are on the — in the infant — infant stage.
Our phase one goal, as I indicated, is 15 projects.
An additional $275 million, Mr. President, is going to be provided to our lending partners to create more affordable loans and financing available for facilities that are — that are being built.
Even if we build more facilities, we also need a trained workforce, Mr. President, and so $100 million of this resource is going to be used to support and to create a pipeline of well-trained and experienced workers so that we can expand this workforce in rural America. These will be good-paying jobs that will support families and also support farm families, Mr. President.
And then $50 million of it is going to be utilized for technical assistance and research. We’re going to need a lot of innovation in this industry. We’re going to need new business models. We’re going to need new ways of innovation and technology to create greater efficiencies. And small- and mid-sized facilities need to have the opportunity to have this innovation, as opposed to the big four.
Now, as you indicated, it’s not just about money, it’s also about rules and regulations. And we are strengthening our Packers and Stockyards enforcement effort by leveling the playing field for producers and processors.
And we’re also working on a voluntary label program called “Product of the USA” to allow consumers to know exactly where their resources, their consuming dollar is being spent. We think this is going to better inform consumers in making choices.
And we’re looking forward to the creative partnership that we have with the Department of Justice — a strong working relationship in terms of enforcement.
Mr. President, what this really is all about, at the end of the day, is improving farm income. It’s about creating good-paying jobs in rural America that are so necessary. It’s about giving the consumers choice and a break at the grocery store. And it’s exciting work. And we, at USDA, are really engaged in this and involved in working with our farm partners as I’m — I suspect you’ll hear today.
There are stories of woe out there, but we are committed to making a difference. And we’re looking forward to working with Attorney General Garland and his great team at the Department of Justice, in terms of antitrust enforcement.
So, I’ll turn it over to my friend, the Attorney General.
ATTORNEY GENERAL GARLAND: Thank you very much, Mr. President, for convening this very important meeting. And thank you, Mr. Secretary, for the tremendous engagement our teams have had over the past year on our shared competition and regulatory concerns.
The Justice Department takes very seriously our responsibility to share with our partners across the federal government; to protect consumers; safeguard competition; ensure economic opportunity and fairness for all.
Over the past 10 months, we’ve stepped up our efforts to ensure competition and counter anticompetitive practices across all sectors, from airlines to insurance brokers to book publishers. And we will continue to vigorously enforce our antitrust law — laws, no matter the industry, no matter the company, and no matter the individual.
The work that we do, especially the work that we do together, to ensure competition in our economy has a direct impact on the lives of the American people every single day.
When we talk about promoting competition in the agricultural sector, we are talking about whether a farmer or rancher will be paid a fair and competitive price for their goods and labor.
When we talk about protecting consumers in this context, we are talking about whether food will be affordable for everyone in America.
The Justice Department’s Antitrust Division has been active in implementing the sound policy measures suggested in the President’s Executive Order on Promoting Competition in the American Economy.
We have closely supported USDA’s rulemaking efforts under the Packers and Stockyards Act, a law that pa- — Congress passed 100 years ago — more than 100 years ago — to deal with many of the very same problems we still have today.
Today, we are announcing a new joint initiative to better coordinate efforts between USDA and DOJ. This will include the launch of a centralized accessible portal — a one-stop shop to report complaints of potential violations of our competition laws, including the Sherman and the Clayton Act, as well as the Packers and Stockyards Act.
The joint channel that we are establishing will allow USDA and DOJ to collaborate early on how to appropriately address such complaints.
Where complaints relate to antitrust violations, whistleblowers will be protected in many cases by the new employee and contractor anti-retaliation protections which Congress passed in 2020.
Let me say in closing that anticompetitive practices in agriculture, as in any industry, hurt the American people — producers, consumers, and workers alike — and they hurt the American economy.
Too many industries have become too consolidated over time. Too many companies have pursued corporate conduct and more aggressive mergers that have made all of us vulnerable. Against this background, our antitrust efforts cannot and will not slow down.
But it is a fact that our Antitrust Division has been underfunded for too long and has fewer staff today than it had in the 1970s. That is why we are urging Congress to allocate the resources we need to reinvigorate our enforcement efforts and ensure a competitive economy for all Americans.
I look forward to our work together in the days ahead. Thank you very much.
MR. DEESE: Thank you, Mr. Attorney General. And, Mr. President, if you may, we’re going to hear from the group that we have assembled here, which represents the enormous potential and diversity — geographic and otherwise — in this — in this industry.
And we’re going to start here with Scott — Scott Blubaugh, who is the President of the Oklahoma Farmers Union and operates a cattle ranch in Oklahoma.
And I just, Scott, open it to you and would be curious to hear how you approach the issue of the options for processing and what it would mean to you to have more options and how you think about that in the context of the action steps that we’re trying to put forward today.
MR. BLUBAUGH: Well, thank you. Thank you, Mr. President, for taking on this very critical issue for rural America.
You know, this is on our minds of all of our farmers and ranchers throughout the country. And not since Teddy Roosevelt have we had a President that is willing to take on this big issue. So, thank you very much for that.
To answer your question — “What will it do for me as a farmer and rancher and my membership here in Oklahoma and the American farmers and ranchers?” — is if we are able to be able to process our animals on a more local level, we can retain more of that retail food dollar in our — at our farm gates, in our farms and ranches, in our family operations, and in our rural communities.
For too long, we have seen the multinational meatpackers suck out all of the wealth of rural America and put it in their corporate coffers and, in some cases, even overseas.
So, we’re excited about being able to have local processing done by local people and then sell directly to the consumer. You know, whether we can sell to the grocery stores, the restaurants, or the consumers directly, all of these will enable our rural communities to be lifted out of poverty. And we have a great prob- — poverty problem in rural America. So, we’re excited about that.
In Oklahoma, I will tell you, $10 million of the first round of the CARES COVID money was actually allocated through our Oklahoma Department of Agriculture to fund some project, just as you’re speaking of.
So we had 196 applicants apply for that $10 million of CARES money; 40 applicants were chosen and were able to be funded with that money. And out of that, we had 19 new mom-and-pop small processors either open up for business here in our state, or they were able to upgrade an old facility to meet the new safety and health standards and be able to market that across state lines.
We also had — have had great success working with our Tribal neighbors here in Oklahoma. As many of our Tribal organizations, their governments have put new processing online or are in the process of it — processing both their cattle and their buffalo, and their excess capacity that these new plants has created — it has also given our independent farmers and ranchers in the community an opportunity to get their cattle processed and marketed.
So, we’re very — very pleased with that. And I look forward to everything I heard here today.
SECRETARY VILSACK: Hey, Brian —
MR. DEESE: Yes.
SECRETARY VILSACK: Can I — may —
MR. DEESE: Please.
SECRETARY VILSACK: Mr. President, what Scott said at the beginning was that this was a critical issue for rural America. And I think it’s critical from two perspectives that he raised: one, the notion of keeping the dollars in the rural communities where the dollars are being and the wealth is being generated. For far too long, we’ve had an extraction economy in rural America where these guys work 24/7, 365 days a year raising these cattle, and then they transport them hundreds of miles away, and the profits basically go thousands of miles away.
What Scott is talking about is retaining those profits in the small towns. That’s going to create opportunities for farmers to be able to more — better afford that machinery. That’s going to keep the implement dealer in business. They’re going to be able to keep — support that Main Street business; that’s going to keep those retail stores in business. And it also is going to create jobs.
And I think it’s really important to emphasize it’s not just farmers who are going to benefit from this, it’s also rural folks looking for a decent job. And if we do this right — with workforce training, with assistance — we can have good-paying jobs to complement what’s happening on the farm.
So this is — this is an incredible thing. Just so you understand how dire this is, Mr. President — and I’ll finish with this: I was in Council Bluffs, Iowa, talking to a farmer this summer. And he came up to me and he said, “Mr. Secretary, thank you so much for doing this.” He said, “I just sold a load of cattle.” And he said, “This is what irritates me about this whole system: I lost $150 a head — $150 a head I lost on this — on this cattle. But I know the processor that purchased those cattle is going to make $1,800 a head.” And he looked at me and he said, “Mr. Secretary, how is that fair?” It’s not.
THE PRESIDENT: Can I ask you a question, Scott? When you talk about — you said be able to go locally. How far do you have to go, before these smaller operations opened up, to sell your cattle? I mean, the average farmer, cattleman in Iowa or in Oklahoma or, you know, wherever, how far do they have to take their cattle to actually sell them?
MR. BLUBAUGH: Well, if we sell to the — if we sell the cattle to the big four processors, then — you know, it’s several hundred miles. And it’s a little bit misleading that we have four of these very large companies, the processors, but they’re located more regionally. So, in many cases, there’s only one option to sell to. And so, it’s a “take it or leave it” price that you’re offered.
So when we tried to go around that system and — and not give our cattle away to these multinational companies — but if we can process them on a local level and then sell directly to consumers, it’s just a win-win for everybody. It’s a win for the consumer. They get more choices. In my opinion, they get a better product. And we know, because of the pandemic — it has shown us and proven to us that consumers want to buy locally if they can, and they want to know where their food comes from. And they trust the American farmer and rancher to do that. And their faith in the American farmer, rancher is far greater than any of these multinational companies.
So, it’s just a win-win for everyone I see, except maybe the — these four companies we’re talking about.
THE PRESIDENT: Thank you.
MR. DEESE: So, Mr. President, I want to ask Corwin Heatwole to come in. Corwin is the founding farmer and CEO of
Farm [Farmer] Focus. And to pick up on the last point, Corwin is on the frontline of actually innovating and creating an alternative processing facility in the poultry industry.
So, Corwin, can you talk a little bit about what motivated you to do it and the challenges that you’ve had in building your company?
MR. HEATWOLE: Yes, thank you. And as a sixth generational farmer, I greatly value the farming lifestyle. But it was grieving when I saw dozens of farms closing down around me, and I realized that my own farm was not viable for the next generation. And we knew that something had to be done, but there was no option for us to get our animals processed locally. And everyone kept telling us that “farmers don’t start chicken companies.”
So, with no other options, we started a company with a mission to promote and protect generational family farms. And we’re now partnered with 73 independent family farmers and on track to exceed 100 this year. And we’re also providing poultry products for around 1 million consumers.
And our unique and scalable model of partnering with farmers focuses on the financial viability and sustainability. And it brings solutions to the three pain points that exist with the conglomerates.
One, the lack of ownership of animals and inventory on the farm. Second, the lack of operational control that belongs in the hands of the farmers. And third is the “tournament” pay system that plays farmers against each other.
And we found that when you empower farmers with ownership and control, enabling farms to be viable and sustainable for the next generation, that incredible success stories emerge of farmers returning to success from the brink of bankruptcy. And you even see the next generation returning to the farm. And we’ve seen the average age of our farmers now trend about 10 years below the national average.
This model has enabled a resilient community of thriving farmers while bringing the consumers the transparent and traceable products that they’ve been looking for.
And we’re excited that this administration is focused on increasing the capabilities that create more options for generational family farmers.
And we, ourselves, look forward to partnering on these new programs to expand and touch more farmers and communities. We believe that, together, we will continue to level the playing field for farmers and ranchers while establishing a more resilient supply network.
So, we thank you for your diligence in helping preserve the legacy of the American farmer.
THE PRESIDENT: Well, thank you.
MR. DEESE: Thank you.
THE PRESIDENT: You know, everybody, I come from the state of Delaware. And everybody thinks the big industry is chemicals; it’s chickens. Chickens. Broiler chickens. Billion-dollar industries. And it needs help.
So, anyway — sorry, I don’t mean to get too personal here.
MR. DEESE: No, please. We’re going to — so we’re going to move to the next set, but we’re going to pause for a moment and — for the press to exit.
THE PRESIDENT: Okay.
Q Mr. President, can I ask you a quick question about the new CDC guidance? In your view — do you think it should have included a testing component?
THE PRESIDENT: I’ll — I’ll be talking to you about that later.
2:58 P.M. EST