Pigs Get Fed . . .

And as the saying goes . . . “hogs get slaughtered.”  So it may be for the U.S. meat packing industry which appears to have gotten the Biden Administration’s attention.  According to a recent government report, half of the recent price increases at grocery stores across the country are due to higher meat prices.  For example, pork prices have risen by more than 12% since December 2020.  A lack of competition among meat processors is blamed for the high prices consumers are paying. The Administration claims that “four large conglomerates control the majority of the market for each of these three products, and the data show that these companies have been raising prices while generating record profits during the pandemic.”  By way of example, the top four pork processing companies control 66% of the market today.  Meanwhile, the top firms are posting record profits with extremely high gross margins. This has been good in the short term for shareholders who benefit from the large dividends and buybacks being sent their way by companies like JBS Foods which reportedly paid shareholders $2.3 billion in 2020.  But this largesse has come at the average consumer’s expense and has raised the hackles of industry regulators.  As previously reported here, the USDA and the DOJ have conducted a joint investigation into price fixing in the chicken processing industry which resulted in numerous indictments and guilty pleas.  Now that the clucking over poultry price fixing has quieted, pork could be DOJ’s next target.  Sooey!