The pandemic, fires, and a hacking incident have caused meat prices to rise dramatically. In response, local cattle farmers aren’t getting enough from processing plants for their products. Farmers are taking the matter into their own hands by opening up small, local meat processing facilities.
“Most people have options if you’re selling something,” cattle farmer Damon Watson told MSNBC. “For farmers and ranchers, you get told by the packers what you’re going to get for it and you better hope you’re happy with it.”
In Council Hill, Oklahoma, Damon Watson has opened up his own meat processing facility. He hopes to help circumvent the low profits from the huge meatpacking plants.
Additionally, Watson employs only 16 people in his plant, which is more like a storefront; he processes around 35 cows a week as opposed to the 35,000 the big packing plants process. But, in comparison, Watson’s meat is of higher quality and locally sourced directly to the buyer.
According to a press release from July 2021, the USDA plans to make significant changes to the meat market, improving competition and options for farmers and ranchers. To do this, the USDA is investing $500 million to support independent and local meat processing facilities.
“To shift the balance of power back to the people, USDA will invest in building more, better, and fairer markets for producers and consumers alike,” said Secretary of Agriculture Tom Vilsack in the press release. Independent processors will get a helping hand in the form of an additional $150 million. Hopefully, this will get them through COVID conditions, and also help them reach more customers.
Meat Industry and Secretary of Agriculture Butt Heads
While the Biden Administration blames the meat industry structure for inflated prices and claims reevaluation is key, the North American Meat Institute thinks otherwise.
In a letter to the Secretary of Agriculture Tom Vilsack, Meat Institute CEO Julie Potts outlined what she believed is the real cause of inflated prices.
“High feed costs, increased demand, and changes in the supply chain have driven up prices for wholesale beef,” she wrote in the letter, underlining findings from the USDA’s Economic Research Service. She also wrote that “2020 was a year of high food price inflation due to shifts in consumption patterns and supply chain disruptions resulting from the coronavirus pandemic.”
So, the Meat Institute believes that the pandemic is the cause of inflation; the Secretary of Agriculture believes it’s the very institution of meat processing that needs to be revamped. What’s clear, is that processors aren’t paying farmers and ranchers enough for their meat. That is leading to inequalities in the market. It’s also causing some farmers to go bankrupt or leave cattle farming altogether.
Bottom line: the USDA is going to help independent meat processors get on their feet. Hopefully, this will start balancing the scales between the meat industry and independent farms.