Harris focuses on high food prices as inflation looms large in presidential campaign | Election 2024

Consumer confidence surveys show that despite a cooling of inflation, high prices remain a source of frustration for shoppers, especially among low-income Americans. Overall, prices are about 21% higher than before the pandemic. Average incomes have risen slightly more, fueling spending even as Americans report a gloomy economic outlook.

Some meat prices have risen even more than general inflation: Beef prices have risen nearly 33 percent in the four and a half years since the pandemic began, while chicken prices have shot up 31 percent. Pork is 21 percent more expensive, according to government data.

One reason for the price increases was supply disruptions during the pandemic. Many meat processing plants had to temporarily close after COVID-19 outbreaks occurred among their workers.

But the Biden administration accuses the meat processing industry of allowing corporate consolidation to play a larger role by allowing a small number of companies to raise their prices more than their costs.

Four major companies control 55 to 85 percent of the beef, chicken and poultry market, the White House said in late 2021, including Tyson Foods and JBS. Several of the largest meat companies have collectively paid hundreds of millions of dollars to settle lawsuits accusing them of manipulating chicken, beef and pork prices, but they have not admitted any wrongdoing.

Some economists argue that large food and consumer goods companies have taken advantage of the disruptions during the pandemic. Economist Isabella Weber of the University of Massachusetts at Amherst spoke of “seller inflation.” Others called it “greed inflation.”

Harris's price-gouging suggestions come at a time when there are signs that “seller inflation” is easing. Consumers have become more sophisticated and are foregoing some high-priced purchases while looking for cheaper alternatives.

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, CEOs of Tyson Foods, JBS, Cargill and National Beef argued that higher feed and fuel costs, along with ongoing labor shortages and supply and demand forces, were responsible for higher prices.

There have been significant disruptions to meat production during the pandemic as COVID spread like wildfire through meat plants, forcing temporary closures and extra safety precautions. The bird flu outbreak has hit the poultry industry hard. Years of drought have limited cattle numbers.

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.

The head of the trade group Meat Institute, President and CEO Julie Anna Potts, said Harris' idea would not solve the problem of inflation, which drives up the prices of 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.”