Trump Weighs Beef Deregulation Amid Meatpacking Antitrust Scrutiny

Trump raised the possibility during an interview with conservative radio host Glenn Beck, according to Bloomberg. The discussion comes as the Justice Department continues an antitrust investigation into meatpacking and the administration faces pressure from ranchers over policies aimed at bringing down beef prices.

Four large meatpackers handle most U.S. beef processing and distribution, a level of concentration that has fueled longstanding concerns among ranchers, smaller processors and competition advocates. Critics contend that consolidation has weakened independent producers’ bargaining power and made it more difficult for smaller processing operations to compete, according to Bloomberg.

Beck, who told Trump that he is a rancher, argued during the interview that federal regulations make it difficult for new processing plants to enter the market. He characterized the dominant processors as a cartel and urged the president to ease regulatory requirements as a way of encouraging additional processing capacity.

“We can’t butcher with all of the federal regulations,” Beck said, according to Bloomberg. He later told Trump that people were interested in building processing facilities around the country but that regulatory requirements were holding them back.

Trump appeared interested in the argument, asking whether lighter regulation would allow ranchers and farmers to process beef effectively. He said he had heard complaints about the issue for roughly two decades.

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Related: Texas Targets Meatpacking Giants Amid Rising Beef Costs

“This could be a very good call for ranchers or farmers, no, for the country,” Trump said, as quoted by Bloomberg.

The president did not identify particular regulations he wanted changed or announce a policy review. Still, he indicated that Beck’s proposal had caught his attention, calling the discussion “a very big thing” and saying the host had given him “a very good idea,” according to Bloomberg.

Any effort to alter processing regulations would add another element to Washington’s response to concerns about the structure of the beef industry. Antitrust enforcement generally focuses on whether companies have engaged in conduct that unlawfully restricts competition, while regulatory changes aimed at lowering barriers to entry could seek to increase competition by making it easier for smaller or new processors to operate.

The two approaches could become increasingly intertwined as the administration examines conditions in the meatpacking sector. According to Bloomberg, the Justice Department already has an antitrust investigation underway, while relations between the administration and some ranchers have been strained by efforts to reduce consumer beef prices.

The Agriculture Department has separately sought to support processors outside the industry’s largest companies. Earlier this year, USDA said it would provide as much as $500 million to help midsize beef processors cope with high cattle prices, Bloomberg reported.

Trump’s remarks stopped well short of a formal policy proposal, leaving unanswered which federal requirements could be targeted, how extensively they might be changed and whether any revisions would affect food-safety standards. But his comments put regulatory barriers to processing alongside industry concentration as another potential focus of the administration’s response to competitive pressures in the U.S. beef market.

Source: Bloomberg