Current US meat prices are very high due to the US meat industry’s monopoly. Four major companies dominate the market. Last year, the White House made plans to lower prices, but that strategy may not be enough.
US meat prices are rising. The White House plans to cut prices in 2021, but it doesn’t seem to work. why do you think that is?
The US meat market is highly concentrated, with four companies controlling most of the sector, specifically over 80% of the beef sector. Meat prices are soaring, partly because of inflation, but also because of corporate greed.
The White House Bill
The White House plan announced in 2021 offered him a billion dollar solution, but this is not enough. It costs about $100 million to build a new facility, so a $1 billion budget can only build a limited number of facilities without impacting prices. The meat industry is complex and, unfortunately, small to medium-sized meat packers are unable to scale quickly and efficiently to remain competitive or build a reputation.
The four conglomerates therefore continue to dominate the market and control prices. Increasing competition through international competition is the key to solving the crisis in the United States.
Easing Import Tariffs
If governments eased import tariffs and created more affordable standards, international meat, especially from South American regions where meat is cheaper, could potentially become more readily available and therefore cheaper.
The US has a comprehensive food safety management system, Hazard Analysis Seeking quality control points (HAACCP). International companies, mainly based in South America, produce high quality, cheap meat in large quantities.
Both food quality and safety have improved due to better standardization of processes and products (from farm to fork).
More opportunities are becoming increasingly accessible through the implementation of overtime technology.
New products have been developed and new niche markets have grown exponentially (i.e. plant-based products will reach $95 billion by 2029, at a CAGR of 12% of his expected to do so).
In the next few years, the meat industry will become more automated in Europe and developing countries. Moreover, plant-based foods, which are currently expensive to produce, will become more affordable at scale as ESG demand increases. This could also affect the meat market.
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Source & opinion: Digital Journal