Last week, President Trump instructed the Department of Justice to investigate the largest meat packing companies in the United States following concerns about increasing beef prices. This action followed a social media post from the president, where he accused these companies of “Illicit Collusion, Price Fixing, and Price Manipulation,” and claimed that “Majority Foreign Owned Meat Packers” are artificially raising prices.
Fred Ashton, Director of Competition Policy at the American Action Forum, provided analysis on these claims. He noted that ground beef and beef steak prices have increased by 12.3 percent and 12.7 percent respectively over the past year, which is more than four times higher than the overall inflation rate.
Ashton also pointed out that while the meat packing industry is highly concentrated—dominated by four firms—data indicates that the inflation-adjusted farm-to-wholesale choice beef price spread has actually narrowed in recent years after a period of expansion beginning in 2016. This trend suggests that meat packers may not have been able to exert significant market power during this time and that other economic or natural factors could be contributing to rising beef prices.
