Meatpacking is a concentrated industry, with a few firms accounting for most production. Across the entire U.S. economy as well as in agribusiness, industry concentration has reemerged as a policy issue. In 2020, the House Committee on Agriculture directed USDA to investigate the vulnerability of the beef supply chain and the level of concentration in the industry. In 2021, President Biden issued an Executive Order, “Promoting Competition in the American Economy,” which referred specifically to meatpacking concentration and its effects on financial returns to farmers and ranchers. In 2023, the Federal Trade Commission and the U.S. Department of Justice—charged with enforcing the Nation’s antitrust laws—jointly issued revisions to their “Merger Guidelines” aimed at concentration in U.S. industries.
The broad policy questions over concentration involve how it affects competition within industries. Can firms in highly concentrated industries use their market power to raise prices to buyers while reducing the prices they pay suppliers and the wages they pay workers? At the same time, does a lack of competitive rivalry protect inefficient producers and lead to reduced innovation? These broad questions have been closely studied in meatpacking. After rapid increases in industry concentration during the 1980s, Congress funded research into its causes and consequences during the 1990s and 2000s. In 2010, USDA and the U.S. Department of Justice held a series of joint public workshops on concentration and competition in agribusiness, with a significant focus on meatpacking. Currently, there is stronger evidence of market power in the meatpacking industry.
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