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Diving overview:
- President Donald Trump has ordered the federal government to investigate U.S. food-related industries and foreign companies for potential price fixing as his administration comes under pressure to address rising food costs.
- The President directed the Department of Justice and the Federal Trade Commission to establish a task force to determine the extent of anticompetitive conduct within the food supply chain, particularly among companies owned by foreign corporations.
- The executive order gives DOJ and the FTC the authority to take enforcement actions against companies and propose new regulatory approaches. The Attorney General’s Office may initiate criminal proceedings, including a grand jury investigation, if there is evidence of collusion.
Dive Insights:
The Trump administration is under pressure to address high food costs, with consumers paying an average of 32% more per month for groceries compared to 2019, according to the Urban Institute.
In his executive order, Trump said meat processing, seed, fertilizer and equipment companies are “vulnerable to price fixing and other anti-competitive practices.” The president added that anticompetitive behavior, especially by foreign-controlled companies, threatens “the stability and affordability of America’s food supply.”
Two major meatpacking companies have relationships in other countries. Brazil-based beef giant JBS and pork producer Smithfield Foods, owned by China’s WH Group. Earlier this year, WH Group spun off Smithfield’s North American operations amid concerns about China’s influence on the U.S. agricultural industry.
The Trump administration is focusing its attention again on meat processors as beef prices hit record highs. The president recently lifted food tariffs on items like beef and coffee to keep costs down.
Groups representing meat processors say they are not responsible for the high prices and that ongoing cattle shortages are driving profits soaring. Tyson Foods recently revealed plans to lay off more than 4,000 employees and close one of its largest beef processing plants due to supply constraints.
“Despite high consumer beef prices, beef packers are losing money with cattle prices at record highs,” said Julie Anna Potts, president and CEO of the Meat Institute, which represents processors. “For more than a year, beef packers have been running at a loss due to tight cattle supply and high demand.”
