Inflation, Biden style
Added 09-12-21 09:31:02am EST - “Biden NEC guru Brian Deese explained from the lectern in the White House press room last week that 'f you take out' beef, pork and poultry from the calculations of recent retail grocery prices, the 'price increases are more in line…” - Powerlineblog.com
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Biden NEC guru Brian Deese explained from the lectern in the White House press room last week that “[i]f you take out” beef, pork and poultry from the calculations of recent retail grocery prices, the “price increases are more in line with a historical norms” (video below). I thought the methodology invited mockery. If you throw out dietary staples, it’s not so bad!
However, Deese cited a report that he had conducted with his colleagues supporting the proposition. This appears to be it: “Addressing Concentration in the Meat-Processing Industry to Lower Food Prices for American Families.” I don’t have the professional competence to assess it. I should leave it to others who do. I will limit myself to a few observations.
The report attributes the price increases to four large conglomerates that “overwhelmingly control meat supply chains, driving down earnings for farmers while driving up prices for consumers.” The industry is alleged to be “highly consolidated” and to serve “as a key choke point in the supply chain[.]” I would prefer a metaphor other than “choke point” when discussing food supply chains, but the authors want to make it sound dire.
According to the report, this consolidation has taken place over the past 50 years and the extent of consolidation varies widely as to each of the three products — the four firms “control approximately 55-85% of the market for these three products[.]” Here is the precise breakdown:
In 1977, the largest four beef-packing firms controlled just 25% of the market, compared to 82% today. In poultry, the top four processing firms controlled 35% of the market in 1986, compared to 54% today. And in pork, the top four hog-processing firms controlled 33% of the market in 1976, compared to 66% today.
— Tom Elliott (@tomselliott) September 8, 2021
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