WASHINGTON – The North American Meat Institute (NAMI) submitted comments to the US Department of Agriculture following the agency’s request for investments and opportunities for meat and poultry processing infrastructure in July.
The trade association focused much of its comments on resiliency and capacity of the meat industry supply chain.
“The pandemic that began in 2020 and continues today may be the ultimate black swan event,” said Mark Dopp, chief operating officer for NAMI. “But its occurrence does not automatically mean the system needs to be torn down and rebuilt.”
NAMI said Americans spend less disposable income on food than any other country due to systemic efficiencies that allow processors to offer food to consumers at lower prices.
Next, the association mentioned its new Protein PACT for the People, Animals and Climate of Tomorrow in the comments. It is a joint initiative by 12 organizations representing the meat, poultry and dairy industry along with animal feed and ingredients. The pact was set up to accelerate momentum and verify progress toward global sustainable development goals across all animal protein sectors.
NAMI also said that assertions that increasing consolidation and concentration in the industry are misplaced.
“P&S (Packers and Stockyards Division) data shows the four-firm concentration ratio in fed cattle beef packing has not changed meaningfully in more than 25 years,” NAMI said. “And P&S is not alone on an enforcement island. Any potential merger or acquisition regulators believe threatens ‘too much market power’ that could ‘yield less competition’ and be ‘ripe for market abuse’ is subject to review by the Justice Department or the Federal Trade Commission. The last proposed merger of two the ‘big four’ fed cattle slaughterers occurred in 2008 – and it was blocked by the Department of Justice.”
NAMI stated that the greatest effect on markets in its opinion are livestock inventory and the ability of packers to utilize capacity.
“The calls for more capacity need to come with answers to many questions, including: who will build it; who will fund it; who will staff it; will there be sufficient livestock in years to come; among others?” NAMI said.
Lastly, the group opined how the efforts to increase capacity through government intervention are shortsighted.
Full comments by the association are available here.