Meat shortages are coming unless we deregulate the industry.
Just a few closures of meatpacking plants are putting the entire meat industry on the brink of collapse. “The sudden shift from restaurant dining to at-home eating, coupled with panic buying at grocery stores, is causing major disruption in the manufacturing, distribution and sales of food products. Dairy farmers are dumping excess raw milk, while meat companies are scrambling to meet demand,” USA Today reports.
Representative Thomas Massie (R-Kentucky), who happens to also raise cattle himself, has sounded the alarm for years that burdensome regulations need to go or American food supply chains will be in dire straits.
That crisis is here. The question is, will Congress act in time?
The PRIME Act stands for Processing Revival and Intrastate Meat Exemption Act. The proposed legislation lifts restrictions on over 1,000 mom-and-pop meat processing plants that are currently restricted from supplying restaurants, schools, hotels, and the like. Yes, you read that right. The American people are reliant on a handful of big businesses that have long-enjoyed significant advantages, thanks to regulatory bloat.
The bill has been sitting in the House and the Senate for nearly a year—meaning, with enough political will, it has the potential to be fast-tracked to President Donald Trump.
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Cows at a dairy farm.[/caption]
FREEING UP AMERICAN SUPPLIERS TO SUPPLY
Massie has proposed this common-sense solution for years to no avail. Apparently, nobody was listening. But, ever since Tyson Foods board chairman, John Tyson, warned the supply chain was “breaking,” and President Trump ordered meat processing plants to stay open, Massie can no longer be ignored.
Under the PRIME Act, the small meat processing businesses would still be subject to unannounced USDA inspections, so there will be no effect on food quality standards.
This food supply issue is critical to public health and the economy: thousands of processing and farm jobs are at risk, not to mention businesses that sell meat and the employees who depend on those businesses.
Massie, who raises cattle, has multiple patents to his name, and a master's degree in mechanical engineering from MIT, knows what he’s talking about. He’s been leveraging that expertise to warn Americans that food shortages are coming.
Under the PRIME Act, the small meat processing businesses would still be subject to unannounced USDA inspections, so there will be no effect on food quality standards. Currently, however, these small businesses are not allowed to sell to grocery stores simply because they don’t have an inspector on staff at all times, a requirement more easily fulfilled by the big businesses.
The bill would also give the states back enough authority that intrastate distribution of custom-slaughtered meat could take place. From farm to table, as long as the meat doesn't cross a state border, the distribution would be free of federal regulation. Not only would this allow for flexibility and resilience in the industry, but the vulnerability to contamination would be better mitigated For example, if contamination were the result of a virus among the animals, then it may be nearly impossible to contain the outbreak within one slaughterhouse. If there are more processing plants available at shorter distances, there is less risk of widespread contagion.
It’s more than a little ridiculous that in the land of the free, these are the reasons behind food supply chains breaking, and animals are uselessly killed by the millions. When the supply chain breaks at the processing stage, farms are stuck between a rock and a hard, tragic place. As new cows and pigs are born, they run out of room for where to put their cattle already raised for meat. There isn't enough food to feed them all either, and the heartbreaking decision has to be made to euthanize most or all of their animals.
As Massie argued to Breitbart’s Joel Pollak last month, “Let those small meat processors fill in the gaps so that we don’t have the dangerous situation where we’re euthanizing animals instead of providing them as food,”
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American beef in a supermarket.[/caption]
THE HISTORY OF AMERICA’S FRAGILE MEAT SUPPLY CHAIN
How did we get to the point of meat insecurity in America? We still have a market economy, after all, with a division of labor, so it shouldn’t take special knowledge of how the food is produced in order to secure meat for your family. (Though it’s worth noting that if Massie’s bill fails, it might be a good idea for the rest of us to find a local farmer to befriend. In Oklahoma, there are ranchers and farmers already reaching out and selling directly to consumers).
Crony capitalism, not E. coli, is the worst contamination threat to the beef, poultry, and pork markets.
Like most business regulations, the ones revolving meatpacking are much more burdensome on small businesses and entrepreneurs than they are on big suppliers. Further, it’s taxpayers who foot the bill for these inspections—not the businesses that derive profits from the sticker labels that boast of their product quality.
Ostensibly, the rules are written with the intent to protect the consumer. In reality, however, they protect the large corporations against competition, which further injures consumers as big businesses aren’t incentivized to innovate or improve to the same degree as they would be without government protection.
This has been going on for far too long.
Michael Maharrey, communications director for the Tenth Amendment Center, notes that since the Wholesome Meat Act of 1967, the number of slaughterhouses in America has fallen from over 10,000 to just 2,766 last year. That law required all meat be slaughtered and processed under federal inspection, or a state authority with regulations at least as strict as federal mandates.
The unbroken history of the meatpacking industry pushing for these kinds of mandatory inspections actually goes back some 130 years. Economist Murray Rothbard accounts for its origins in his essay The Meat-Packing Myth: "Every meat packer involved in any way whatever in export had to be inspected in detail by the Department of Agriculture, and violations were punishable by imprisonment as well as fine."
This regulatory structure was a response to protectionist European prohibitions on American meat imports. To compensate, the US meat industry lobbied for the first mandatory inspection law in 1891. In the decade before that first inspection law, meat packing locations grew from 872 in 1879 to 1,367 in 1889.
Less than ten years after the 1891 law, the top three meatpacking firms represented 78% of the whole industry.
The worst thing that can happen to Massie’s effort is for special interests to blunt its core strength: the principle of decentralization. If corporate lobbyists should try and inflame legislators with warnings of dire consequences, then representatives should only briefly stop to remember how satisfied those lobbyists were with the faulty status quo before this crisis hit.
Crony capitalism, not E. coli, is the worst contamination threat to the beef, poultry, and pork markets.
Americans have enough to worry about in this economic downturn. They shouldn’t be seeing unstocked shelves or high prices just because big business interests cheated the free market with the help of bureaucrats and central planners.
