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Yesterday — 21 December 2024Main stream

A Scandalous Reason Meat Prices Have Skyrocketed

20 December 2024 at 17:45

The bacon in your BLT now costs nearly twice as much as it did 15 years ago, but inflation is only part of the reason. Broadly speaking, food and drink prices only grew by about 50 percent during that time. So, what’s up with the meat?

The answer may have to do with Agri Stats, a small data venture based in Indiana. In 2023, the Department of Justice, backed by a coalition of state attorneys general, sued the company, accusing it of violating the Sherman Antitrust Act by enabling the exchange of anticompetitive information, leading to artificially high meat prices. (Agri Stats has denied wrongdoing.)

The exchange works like this: For two decades, Agri Stats has been collecting metrics from the country’s largest meat processors on all kinds of things—pork and chicken-thigh inventories, production speeds, meatpacking wages. It analyzes the intel and creates reports that it distributes back to its members—dominant players that can afford to pay millions for a subscription—which use the info to set prices. Agri Stats had been running this exchange within Federal Trade Commission antitrust “safety zones” guidelines that permitted “reasonable” sharing of information between rivals in a given sector.

Those guidelines were rescinded in 2023, which opened the door for the DOJ to claim the information exchanges harm competition, in part because Agri Stats focuses on boosting the industry’s profitability—in some cases, it allegedly encouraged companies to restrict output, thereby reducing supply, and jack up their prices. (Agri Stats argues that it helps protein producers identify ways to keep production costs, and prices, low.)

“Consumers have very little choice for where to purchase meat, and farmers have very little choice for where to sell it.”

Agri Stats isn’t solely to blame, of course. Just four conglomerates—JBS Foods, Tyson Foods, Cargill, and Marfrig—control up to 85 percent of the meat industry’s supply chain. For many years, Agri Stats’ member firms accounted for more than 90 percent of broiler chicken, 80 percent of pork, and 90 percent of turkey sold in the United States. As long as the giants all raised their prices, the DOJ argues, there was little competitive risk in doing so.

This is not the first time the big meatpackers have faced scrutiny for monopolistic behavior. In the early 20th century, a federal investigation concluded that the era’s five biggest players were colluding, which threatened competition. The resulting Packers and Stockyards Act of 1921 aimed to end such behavior by prohibiting unfair pricing, manipulation of supply chains, and other noncompetitive activities.

But in the 1980s, a shift in the courts and the election of President Ronald Reagan led the DOJ to abandon aspects of antitrust enforcement as the new administration embraced conservative economist Milton Friedman’s belief that markets will self-correct. A flurry of mergers followed. And tech advancements allowed large slaughterhouses to process meat faster and more cheaply than the smaller plants.

Consolidation, combined with sophisticated data tools, has created an environment ripe for manipulation, according to antitrust scholar Austin Frerick, author of the 2024 book Barons: Money, Power, and the Corruption of America’s Food Industry. As companies amass power, he told me, “data brokers become more effective,” thereby encouraging more consolidation: “It’s a system that reinforces itself.

“This isn’t rocket science—it’s really just a question of political courage.”

As a result, “consumers have very little choice for where to purchase meat, and farmers have very little choice for where to sell it,” says Jennifer Curtis, co-founder of North Carolina’s Firsthand Foods, which buys animals from local farmers, coordinates processing, and sells the meat to restaurants and grocers. With the right support, regional supply chains could loosen Big Meat’s grip on the market. Curtis says her state is making headway on boosting the little guys: A recent program, for instance, tapped into Covid relief funds to provide grants for small-scale meat processors that help them serve more farmers and get more of their products to market.

Reining in Big Meat will require bolder federal action. On the campaign trail, Kamala Harris proposed a federal ban on price gouging that could provide a legal framework to challenge market manipulators. But the most important move, Frerick says, is simply to en-force existing laws: “In the meat industry, we already did this all a century ago. This isn’t rocket science—it’s really just a question of political courage.”

Before yesterdayMain stream

A Scandalous Reason Meat Prices Have Skyrocketed

20 December 2024 at 17:45

The bacon in your BLT now costs nearly twice as much as it did 15 years ago, but inflation is only part of the reason. Broadly speaking, food and drink prices only grew by about 50 percent during that time. So, what’s up with the meat?

The answer may have to do with Agri Stats, a small data venture based in Indiana. In 2023, the Department of Justice, backed by a coalition of state attorneys general, sued the company, accusing it of violating the Sherman Antitrust Act by enabling the exchange of anticompetitive information, leading to artificially high meat prices. (Agri Stats has denied wrongdoing.)

The exchange works like this: For two decades, Agri Stats has been collecting metrics from the country’s largest meat processors on all kinds of things—pork and chicken-thigh inventories, production speeds, meatpacking wages. It analyzes the intel and creates reports that it distributes back to its members—dominant players that can afford to pay millions for a subscription—which use the info to set prices. Agri Stats had been running this exchange within Federal Trade Commission antitrust “safety zones” guidelines that permitted “reasonable” sharing of information between rivals in a given sector.

Those guidelines were rescinded in 2023, which opened the door for the DOJ to claim the information exchanges harm competition, in part because Agri Stats focuses on boosting the industry’s profitability—in some cases, it allegedly encouraged companies to restrict output, thereby reducing supply, and jack up their prices. (Agri Stats argues that it helps protein producers identify ways to keep production costs, and prices, low.)

“Consumers have very little choice for where to purchase meat, and farmers have very little choice for where to sell it.”

Agri Stats isn’t solely to blame, of course. Just four conglomerates—JBS Foods, Tyson Foods, Cargill, and Marfrig—control up to 85 percent of the meat industry’s supply chain. For many years, Agri Stats’ member firms accounted for more than 90 percent of broiler chicken, 80 percent of pork, and 90 percent of turkey sold in the United States. As long as the giants all raised their prices, the DOJ argues, there was little competitive risk in doing so.

This is not the first time the big meatpackers have faced scrutiny for monopolistic behavior. In the early 20th century, a federal investigation concluded that the era’s five biggest players were colluding, which threatened competition. The resulting Packers and Stockyards Act of 1921 aimed to end such behavior by prohibiting unfair pricing, manipulation of supply chains, and other noncompetitive activities.

But in the 1980s, a shift in the courts and the election of President Ronald Reagan led the DOJ to abandon aspects of antitrust enforcement as the new administration embraced conservative economist Milton Friedman’s belief that markets will self-correct. A flurry of mergers followed. And tech advancements allowed large slaughterhouses to process meat faster and more cheaply than the smaller plants.

Consolidation, combined with sophisticated data tools, has created an environment ripe for manipulation, according to antitrust scholar Austin Frerick, author of the 2024 book Barons: Money, Power, and the Corruption of America’s Food Industry. As companies amass power, he told me, “data brokers become more effective,” thereby encouraging more consolidation: “It’s a system that reinforces itself.

“This isn’t rocket science—it’s really just a question of political courage.”

As a result, “consumers have very little choice for where to purchase meat, and farmers have very little choice for where to sell it,” says Jennifer Curtis, co-founder of North Carolina’s Firsthand Foods, which buys animals from local farmers, coordinates processing, and sells the meat to restaurants and grocers. With the right support, regional supply chains could loosen Big Meat’s grip on the market. Curtis says her state is making headway on boosting the little guys: A recent program, for instance, tapped into Covid relief funds to provide grants for small-scale meat processors that help them serve more farmers and get more of their products to market.

Reining in Big Meat will require bolder federal action. On the campaign trail, Kamala Harris proposed a federal ban on price gouging that could provide a legal framework to challenge market manipulators. But the most important move, Frerick says, is simply to en-force existing laws: “In the meat industry, we already did this all a century ago. This isn’t rocket science—it’s really just a question of political courage.”

Against the Grain: What to Eat When the World Dries Up

18 October 2024 at 10:00

As a child, Senegalese-born chef Pierre Thiam took trips from Dakar to the countryside to visit his grandparents. There, he often ate fonio, a locally grown seeded grass rarely found outside rural areas. After making a name for himself at New York restaurants decades later, Thiam’s thoughts returned to the ingredient. “It’s very versatile,” he says. “It’s a delicate grain,” mild and nutty with a fluffy texture that resembles couscous.

But he couldn’t find it anywhere, so he began importing it through his food supply company, Yolélé. It wasn’t just fonio’s texture that he saw as a boon for the US market: The grain has attributes that make it especially enticing in a warming world.

Fonio, grown predominantly in West Africa, is a staple in many African and Asian countries. Part of the millet family, it is fast-growing, highly nutritious, resilient to changing conditions, and able to thrive in poor, arid soils.

Few farmers grow millets these days, despite the need for adaptable crops.

Like corn, sorghum, and sugarcane, it is a C4 plant, which, to spare you a long lesson in cellular biology, means it retains water more efficiently than most plants, especially in sunny environments. Millets have among the lowest water requirements of any cereal crop for another reason, too: Their elongated and dense root systems can access moisture deep in the soil, reducing reliance on regular rainfall.

But few farmers grow millets these days, despite the need for adaptable crops. Nearly every region of the world is getting hotter. Twenty-one of the world’s 37 major aquifers—including many in the United States—are being depleted faster than they can be replenished, and major rivers are drying up due to prolonged drought. Research published in Nature Climate Change in 2021 showed that human-­caused warming has already reduced global agricultural production by 21 percent since 1961. And a new report by the Global Commission on the Economics of Water warns that half the world’s food production is in areas at risk of serious water shortages by the middle of the century.

If millets are such an attractive choice for our changing climate, why aren’t we growing more of them? Commercialization, it turns out, faces several roadblocks. “It’s relatively difficult to process them,” explains Jonathon Landeck, co-founder of the nonprofit North American Millets Alliance. The seeds are typically sifted for impurities, cleaned, and dried before being dehulled—a task traditionally accomplished by hand with a mortar and pestle—and sorted by size and color. These are tedious tasks, and there isn’t much to be had in the way of efficient, millet-specific processing equipment.

In 2022, a Malian agro-processing venture involving Yolélé and another firm received a $2 million grant from the US Agency for ­International Development to develop a transparent supply chain and better technology. The partnership has collaborated with the Swiss equipment manufacturer Bühler to engineer a machine that virtually eliminates fonio loss during processing—previously as much as half the crop—increasing its output of edible grain from 1 ton per workday to 3 tons per hour.

But markets require demand. Few American consumers are familiar with millet, let alone know how to prepare it, Landeck says. While the UN declared 2023 the International Year of Millets, government funding for research and crop subsidies on anywhere near the scale of those enjoyed by corn, wheat, and rice growers “is yet to follow,” says chemist Amrita Hazra, a co-founder of the Millet Project, a research collective based at the University of California, Berkeley. The USDA maintains a collection of millet seeds from around the globe, Hazra adds, and should invest in research to determine which species grow best in different climates and altitudes, knowledge that could incentivize farmers to propagate millets.

The agency is, in fact, funding a small-scale exploration of millet as an economically viable US crop. Earlier this year, it granted $4 million to Zego, a company that aims to increase domestic processing capacity, marketing, and consumption of organic millet.

Thiam would be excited if Americans fell in love with fonio, though he’d rather we continue sourcing it from West African farmers who are often overlooked by the global supply chain and have been growing this climate-resilient grain for millennia. Meanwhile, he says, “creating a market for fonio would not only allow this crop to not disappear, it would also create a model for other crops out there that are just waiting to have their potential unlocked.”

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