VPM: PolitiFact VA: Spanberger goes after meat packer profits
VPM, WARREN FISKE
Meat prices are soaring and Rep. Abigail Spanberger (D-Va.) wonders whether there’s been collusion among the nation’s largest meat-packing corporations.
“The four big meat packers are raking in record profits,” she wrote in a June 16 guest column for Fox News, which was co-authored by Brooke Miller, president of the U.S. Cattlemen’s Association.
We fact checked Spanberger’s claim about profits and found it is correct. Top executives of the four major meat packing companies have sworn to Congress that they are not fixing prices, saying their record profits are instead the result of unusual economic circumstances brought on by the coronavirus pandemic.
Beef prices rose 12.3% over the 12-month period ending on May 31, according to the Bureau of Labor Statistics. That outstrips the 8.6% inflation rate and a 10.1% increase in overall food prices.
Spanberger introduced in April, a bill that would establish an office at the U.S. Department of Agriculture to investigate possible antitrust violations in the meat industry. The measure, backed by Democrats, passed the House on a largely partisan vote earlier this month on June 16. A similar bill passed the Senate Agriculture, Nutrition and Forestry Committee on June 22 with broad bipartisan support.
The four major meat conglomerates are JBS Foods, Tyson Foods, Cargill and Marfrig. They are the middlemen in 55% to 85% of all the beef, pork and poultry sold in the U.S., according to White House analysis released in November 2021. They buy livestock, slaughter it and process the meat, and sell it to retailers. All of them operate internationally.
JBS had a record net profit of $4.4 billion for the 12-month period ending March 31, 2022 — a 70% increase over the previous 12 months.
Tyson had a record $4.1 billion net profit for the year ending March 31, 2022 — a 91% increase over the previous 12 months.
Cargill is a privately-held company and isn’t required to publicly report its financial information. Bloomberg reported last August that confidential financial documents showed Cargill delivered a record $4.9 billion in net income for its fiscal year ending May 31, 2021 — up 60% over the previous 12 months.
Marfrig reported a net profit of $820.1 million in 2021, a 32% increase over 2020. “This was our largest profit ever,” the Brazilian-based company said in its annual report. Net income dropped during the first quarter of 2022 due to the company’s $360 million stock purchase in BRF, a Brazilian poultry and pork processor. Even so, Marfrig’s chief financial officer said it was the company’s “best operational first quarter.”
While profits have been soaring for the large meat packers, many ranchers and cattle farmers complain that livestock prices have remained stagnant as their business costs have increased. Many Democrats, including President Joe Biden, have accused the four conglomerates of setting prices.
High-ranking executives of the four corporations, testifying before the House Agriculture Committee on April 22, said the meat industry is cyclical and a confluence of economic events have led to record profits.
They said an oversupply of cattle in recent years pushed down meat prices and left farmers with more livestock than they could sell. At the same time, they said coronavirus outbreaks caused work disruptions at processing plants, leading to increases in the demand and price for meat. The CEOs also said that inflation has increased processing and transportation costs and those added expenses have been passed on to consumers.
Spanberger wrote, “The four big meat packers are raking in record profits.”
The big four are JBS Foods, Tyson Foods, Cargill and Marfrig. Each of the four reported record net income in the latest year-over-year financial information we could find. We rate Spanberger’s statement True.