WASHINGTON (AP) — Vice President Kamala Harris is taking aim at high food prices as her campaign prepares an economic policy speech to be delivered in North Carolina on Friday in which she promises to push for a federal ban on food price gouging.
Harris particularly highlights rising meat prices, which she believes are responsible for a large part of rising grocery bills.
Inflation year-on-year has reached its lowest level in more than three years. However, many people in the US are struggling with food prices that are still 21% higher than they were three years ago. Republican presidential candidate Donald Trump has called inflation the main failure of the Biden administration and its energy policy.
Harris is also emphasizing food prices in addition to drug costs, which will be the focus of an official event with President Joe Biden in Maryland on Thursday. This will be her first joint appearance with Biden since she replaced him at the top of the Democratic ticket.
They announce that Drug price negotiations will reduce the list prices of 10 Medicare programs by hundreds, in some cases thousands, of dollars. most popular and most expensive medicines.
Biden has his own Efforts to curb rising food pricesincluding the creation of a “Competition Council” that sought to reduce costs through increased competition within the meat industry, as part of a broader effort to show that his government is trying to Combating inflation.
Asked if he feared Harris might try to distance herself from his economic record, Biden told the press on Thursday: “She won’t do that.”
When it comes to handling the economy, Americans are more likely to trust Trump than Harris, but the difference is small: 45 percent say Trump is better able to handle the economy, while 38 percent say that about Harris. About 1 in 10 trust neither Harris nor Trump to handle the economy better, according to the latest survey from The Associated Press-NORC Center for Public Affairs Research. Opinion poll.
Consumer confidence surveys show that even as inflation cools, high prices remain a source of frustration for shoppers, especially among low-income Americans. Overall, prices are about 21% higher than they were before the pandemic, with food prices being one of the most visible examples of this structural shift toward higher costs.
At the same time, average incomes have risen somewhat more, boosting spending even as Americans report bleak economic prospects.
However, some meat prices have risen even more than general inflation: Beef prices have risen by almost 33 percent in the four and a half years since the pandemic began, while chicken prices have increased by 31 percent. Pork is 21 percent more expensive, according to government data.
Supply bottlenecks during the pandemic were one reason for the price increase. Many meat processing plants closed temporarily following COVID-19 outbreaks among their employees.
But the Biden administration accuses the meat processing industry of having played a larger role in corporate consolidation, allowing a small number of companies to raise their prices more than input costs.
Four large companies control 55 to 85 percent of the beef, chicken and poultry market, the White House said in late 2021, including Tyson and JBS. JBS eventually paid several million dollars Settlements In court proceedings, they were accused of price fixing, although they did not admit any wrongdoing in the settlements.
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Some economists argue that major food and consumer goods companies such as PepsiCo and Procter & Gamble took advantage of disruptions during the pandemic to raise their prices more than the cost of inputs, thereby greatly increasing their profits.
Economist Isabella Weber of the University of Massachusetts at Amherst called it “seller inflation,” while others have more memorably called it “greed inflation.”
In an influential PaperWeber wrote that “publicly reported supply chain bottlenecks” “create legitimacy for price increases” and “can create acceptance on the part of consumers to pay higher prices.”
But Harris’s price gouging proposals come at a time when there are signs that so-called “seller inflation” is easing. Consumers are discriminatory, and forego some higher-priced purchases while looking for cheaper alternatives. Walmart on Thursday has announced strong sales for this summer as more consumers seek out lower prices.
Food prices rose by an average of only 1.1 percent nationwide last year, corresponding to the price increase before the pandemic, the government said on Wednesday.
The meat industry has been defending itself against accusations of price gouging and price fixing for years, and major players deny the idea that extreme consolidation in the industry is responsible for the high prices.
At a congressional hearing two years ago, the CEOs of the four companies that control almost the entire beef market – Tyson Foods, JBS, Cargill and National Beef – argued that the cause of higher prices was not anti-competitive behavior but soaring feed and fuel costs, persistent labor shortages and the forces of supply and demand.
In addition, there have been significant disruptions to meat production during the pandemic as COVID spread like wildfire through meat plants, forcing temporary closures and additional safety precautions. And the ongoing avian flu outbreak, which has led to the slaughter of more than 100 million birds since the beginning of 2022, has taken its toll on the poultry industry. Years of drought have limited the number of cattle raised across the country.
The industry’s defense strategy is supported by its balance sheets, which generally show that costs have risen rapidly in recent years, eroding profits. This has led some companies, such as Tyson, to close some of their less efficient plants to cut costs.
Glynn Tonsor, an agricultural economist at Kansas State University, said: “The cost of raising the animals, the cost of processing them into meat and the cost of getting the meat to people is higher than before.”
“Yes, consumers are seeing higher prices, but that doesn’t necessarily mean someone is ripping them off,” Tonsor said.
And he said that consolidation in the industry in general happened decades ago, so it’s harder to argue that it’s been a big factor in pricing in recent years.
In recent years, beef, pork and chicken producers have been accused of price fixing in numerous lawsuits brought by retailers, farmers and grocers. Tyson, JBS, Smithfield Foods, Purdue Farms and other major meat companies have collectively agreed to pay hundreds of millions to settle some of these lawsuits, although they have not admitted any wrongdoing.
And the allegations in these lawsuits are generally all based on things that were done years ago – long before the pandemic disrupted production and record inflation drove up costs.
Biden has previously recommended that increasing competition in the meat industry would help lower food prices, and his administration offered $1 billion to help build and expand independent meat processing plants. But it’s hard for small processors to make a meaningful difference in these markets dominated by a handful of giant companies.
The chair of the trade group Meat Institute, President and CEO Julie Anna Potts, said Thursday that Harris’ proposal would not solve the inflation problem that has driven up prices for everything.
“Consumers are affected by high prices caused by inflation on everything from services to rent to cars, not just the grocery store,” Potts said. “A nationwide ban on price gouging does not address the real causes of inflation.”
The trade group cited a study by New York University which found that the average profit margin for food manufacturers is around six percent – well below the profits in other sectors such as software and railroads, where margins are over 20 percent.
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AP Business Writers Josh Funk in Omaha, Nebraska, and Chris Rugaber in Washington contributed.
