The Meat Institute today said Senator Schumer’s bill will destroy the meat packing industry, sending costs for consumers soaring, reducing union jobs, and harming livestock and poultry producers.
“This proposal is absurd,” said Meat Institute President and CEO Julie Anna Potts. “Schumer’s bill and other efforts to villainize meat packers is simply reckless election year pandering that threatens to damage a crucial industry at the center of every American meal. If the Senator is trying to make meat and poultry more affordable for consumers, this is the wrong approach. It will have the opposite effect. While this may be just a messaging bill to Senator Schumer, it is real life for American families, farmers and ranchers and for the 3.2 million Americans employed throughout the industry.”
Senator Schumer’s legislation, the “Family Grocery and Farmer Relief Act” will force meat companies with product lines from more than one species to divest and limit their production to one species.
“Such a foolish proposal would never even be considered in another industry,” said Potts. “Imagine the federal government mandating that Ford only manufacture trucks, while forcing them to sell off all their other vehicle lines to separate small businesses. It is unthinkable in a free market. They don’t even do that in Russia anymore.
“This proposal assumes there are well capitalized and capable buyers lining up to enter the meat and poultry business, and that with the flip of a switch production would simply continue,” said Potts. “This is a dangerous fantasy — these facilities are expensive, hard to run efficiently and safely, and are part of a complex value chain. Who has the capital and industry expertise to buy and operate these facilities? Will the government approve and finance buyers? Will they help run the facilities to ensure the new owners can ensure worker and food safety? What happens if there are no buyers for certain facilities? What will happen to the thousands of workers , many who are union workers, whose jobs simply disappear? Who will process the animals raised by area farmers then?
“And in the beef packing sector, none of this changes the reality that the U.S. has the smallest cattle herd in 75 years. Consumer beef prices reflect the short cattle supply and high consumer demand. The Schumer bill cannot wish away the free market fundamentals of supply and demand.
“The ensuing chaos and likely significant drop in meat production will upset delicate supply and demand forces, ultimately forcing retail and foodservice to hike consumer prices for beef, pork, and poultry. It comes at exactly the wrong time when food prices are already too high for many American families.
“These actions would create uncertainty for livestock and poultry producers, especially cattle producers. Provisions of the bill would hit cattle feeders especially hard, putting some out of business completely. Costs would also be added to transport cattle to feedlots in other regions. And when the Schumer bill results in fewer beef packing facilities in this country, producers will be faced with less processing capacity which will lead to a smaller industry. None of this encourages America’s beef producers to invest in their business and raise more animals.
“In Schumer’s radical new market structure, what incentive does anyone have to own and operate a beef facility, especially now when economists predict the herd will take a decade to fully rebuild? Instead, the bill incentivizes beef and pork packing to leave the U.S. for foreign countries. For the past 18 months, beef packers — large and small — have experienced the largest losses on record with this week’s losses at more than $350 a head.
“The solution to reducing beef prices is to encourage cattle producers to retain heifers and rebuild the herd. Watching as our industry is used as a political football to score cheap points in the press does not provide certainty or confidence in the market.”
Background on the Meat and Poultry Industry’s Economic Contributions
- The meat and poultry industry contributes $347.7 billion in value added
- More than 3.2 million jobs
- $205.3 billion in labor income
- $911.7 billion in total sales (output)
- $77.0 billion in local, state, and federal taxes
(This analysis accounts for indirect and induced effects: The meat and poultry processing industry generates significant economic activity in other industries including livestock and poultry production, animal feed manufacturing, grain and oilseed production, truck and rail transportation, equipment manufacturing, and more.) Full report here.
