Biden Administration

Biden Can't Fix High Beef Prices With $500 Million

But spending more would be a bigger mistake. Sometimes, there simply isn't a government solution to a problem.

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The rising price of beef offers a meaty lesson on the limits of the government's ability to combat inflation by throwing more money at the problem.

Even in an environment where almost everything is getting more expensive, the price of a pound of beef can make your eyes water. The Bureau of Labor Statistics says beef prices are up 12 percent since last September—beef steaks, specifically, are up by 16 percent over the same period. That's considerably more than the increases for food products (3.7 percent) and all products (5.3 percent) over the past 12 months.

The Biden administration, perhaps worried about the political toll that rising food prices could extract in next year's midterms, announced plans earlier this month to offer up to $500 million in loan guarantees to beef producers. That's on top of $500 million approved as part of the $1.9 trillion American Rescue Plan that was supposed to "expand processing capacity and increase competition in meat and poultry" industries, according to the U.S. Department of Agriculture.

The second prong of the White House's plans seems to involve shaming meat-processing companies. "Just four large conglomerates control the majority of the market for each of these three products (beef, pork, and poultry), and the data show that these companies have been raising prices while generating record profits during the pandemic," Brian Deese, director of the White House's National Economic Council, said during a press briefing last Friday, the Detroit Free Press reports.

Taken together, the White House's approach to high meat prices can be summarized as an argument for greater government subsidies based on the idea that stimulating more competition in the meat-packing industry will expand supply and reduce bottlenecks.

But, as David Frum details in The Atlantic today, there are some good reasons to be skeptical of this argument. For starters, it takes about $200 million (and several months, if not longer) to build a single new meat-processing plant. That means the Biden administration's new loan programs will not purchase much additional capacity, and whatever gains are made will not happen immediately. Even if the plan is successful, smaller producers will likely need ongoing support beyond the initial loans—if there was a market for more, smaller meat processors, the private sector would be investing in them already.

"There's a real risk," writes Frum, "that the initial commitment of $500 million in aid and loan guarantees to small packers will expand into continuing intervention in the marketplace to keep smaller competitors in business in the face of the higher efficiency and lower prices of the big packers."

Of course, because this is Frum, he handles the shortcomings of President Joe Biden's plan with kid gloves, even while admitting that White House officials had no answers for his pretty basic questions about how all this will actually, you know, work. Still, he writes, "the architects of the Biden plan are uneasily aware that it rests on a lot of hopes, guesses, and optimistic assumptions."

Let's just call this what it is: a good way to waste $500 million without making any impact on the price of beef.

In some ways, Biden's approach here mirrors his recent big announcement about using the Defense Production Act to get more rapid, at-home COVID tests available to the public. Thanks to an inept Food and Drug Administration (FDA) that's still refusing to approve rapid COVID tests that are readily available in Europe and elsewhere, America has a relatively small supply of these tests—and, naturally, that means the tests are relatively more expensive here. That's a problem because the main benefit of rapid, at-home COVID testing is that you can take a test whenever you want, but that's a lot harder to do when the tests are $20 each—and harder still when you can't find any.

Biden's solution is to use the hammer of government power to force companies to make more tests. That might sound workable in theory, but in practice, even the White House admits that it will be able to squeeze out only another 280 million tests. That's enough for every adult in America to take…one test.

But 280 million sounds like a big number. So does $500 million. Indeed, they are big numbers. But in the context of a national economy like America's, they are actually quite small. So small as to be insignificant, really.

It's not impossible to imagine a more expensive government response to rising beef prices, of course. The Biden administration could ask Congress to approve $20 billion to subsidize farmers who raise cows, build more meat-processing plants, and send every American family a weekly coupon to reduce the cost of steaks and burgers at the local supermarket. (At the very least, this would allow those of us in the news business to write fun headlines about how the beef czar was grilled during a congressional hearing.)

That would be a response that might move the needle, though it would be awful on so, so many levels. The never-ending interventions that Frum describes would be only a part of it. It probably wouldn't take long for the beef industry to become a sacred cow for Congress in the same way that corn-growers already are.

And even if the government did all that, it still wouldn't do anything to address the actual root causes of the current beef price problem: a massive drought in the Western U.S. that has caused beef herds to shrink and the average cow to be 15 pounds less meaty when it is slaughtered. It would not fix the ongoing pandemic-related staffing issues at meat-packing plants, which are operating less efficiently even when fully staffed because they have to take necessary precautions to limit outbreaks that could cause even bigger disruptions.

The lesson here is one about the inability of the government to direct the economy on a large scale. Using the Defense Production Act isn't the best way to get more rapid COVID tests into American homes, sweeping aside FDA red tape is. The test makers will do the rest. Offering $500 million in loan guarantees to anyone who wants to build a new meat-processing plant isn't going to address the supply chain problems at the existing plants or end the Western drought.

Higher prices, while politically difficult for the Biden administration, will send signals up the supply chain that result in more workers being hired and more cows being raised. Beyond that, it's just a matter of waiting—because any government intervention will be either insignificant or ineffective.

And maybe we'll have to eat more pork for a while.

NEXT: A New Lawsuit Says Wilmington Is Running an Unconstitutional Towing and Impound Racket

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  1. The beef with expensive beef.

      1. Inflated and underutilized.

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    1. It’s a high steaks problem

      1. I’m sure a High Plains Drifter could rustle up something…

    2. The government solution to beef prices? More pork!

      1. I am what I eat, and I am meat.

      2. More like crow for all who voted for them.

    3. I think the beef is with pork. Not to ham it up with a side dish of corn…

      1. Between Government’s management of our food supply and Politically Correct/Woke speech codes, all we’ll be left to eat is our words.

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    6. We Jewish people will not be eating more pork.
      Shumer and other JINO’s will have no problems doing just that.
      We observant Jews will have to eat spaghetti

      1. Too bad…you’re missing out on great BBQ.

        1. We’ll be missing out on both pork and beef brisket if we let Government have the run of Bob Dylan’s famous ” Maggie’s Farm.”

      2. So I understand, even Orthodox Jews bend the Kosher Laws in a survival situation…which, I hope, for all our sakes, it never comes to that.

    7. You should have a beef with Boehm. He’s bull-ying and stampeding in on your racket:

      It probably wouldn’t take long for the beef industry to become a sacred cow for Congress in the same way that corn-growers already are.

  2. There is an active and concerted effort to destroy the beef industry in this country. Every year, more and more of my liberal friends speak in very concerned tones about the climate impact of cows. And how they are taking up valuable land that could be farmed and feed more people.

    Now add that to the pandemic-driven spending spree driving up inflation (and the lockdowns nearly ruining many smaller beef producers). Add onto that the Conservation programs that are paying ranchers around the country to take their land out of production and convert it to pristine, unused green areas surrounding multi-million dollar estates in the mountains. And now there is an effort by the Biden administration to favor smaller, boutique meat processors over the large ones that provide inexpensive meat to the masses?

    As usual, you can see the general Elitist conceit. Never before have the masses had access to so much food, and that is the problem for those with degrees. We in the lower classes should bow to the wisdom of these Elites, subsist on Beyond Beef in our cities, and if there is any Beef at all, it will be so high priced as to be out of reach of anyone but the rich and the politicians those rich take to dinners.

    1. Remind your friends, the Elois, about Soylent Green. Tell them it’s eco friendly having green in the name. Encourage them to visit the factory.

      1. I hear the Soylent green is very good this week……

    2. Every year, more and more of my liberal friends speak in very concerned tones about the climate impact of cows. And how they are taking up valuable land that could be farmed and feed more people.

      Biofuels take up more land, produce more CO2, and feed fewer people. If they’re opposed to beef, they should be more opposed to biofuels.

      1. That is correct, you win the superdoopergolden star.

    3. First off, you should get better friends. Next, if you still insist on keeping them, tell them that all of the problems with food prices and food supply is their baby and tell them the Government should stop paying farmers to not raise and grow stuff and stop taxing and regulating those who do raise and grow stuff. Finally, tell them that following the science means supporting vat-grown meat and vat-grown everything else.

  3. Higher fuel and feed prices for farmers, high priced fuel for transportation and the drought in the west will keep beef prices up for a long time. Ranchers have been slaughtering cows rather than watch them die of starvation and can’t afford to buy feed as an alternative to grazing. New packing plants will sit idle until these things improve and ranchers start raising profitable beef again.

    1. “New packing plants will sit idle until these things improve and ranchers start raising profitable beef again.”

      Which means that Biden will be able to spend another $500 million….. and again….. and again … and beef will still get more expensive.

      1. Get ready for lab grown meat. Many food companies are jumping on that train.

        1. Only if people are starving.

      2. Yes, unless people wake up and vote him out, but 4 years of Democratic rule will certainly takes it’s toll.

  4. >>The Biden administration, perhaps worried about the political toll

    only if voting is real.

  5. Well, let’s not forget that Biden is not only proposing to subsidize ranchers for raising cattle, he’s also proposing to subsidize ranchers for not raising cattle because cow farts are killing the planet. Just in case you were wondering whether or not our government is being run by insane people.

    1. Not only that, the U.S. Border patrol was ridding cattle while whipping poor undocumented guests at the border.

    2. Some brave, patriotic food servers may have to start slipping anti-psychotic meds in the buffet at the Capital Commisary.

  6. “Just in case you were wondering whether or not our government is being run by insane people.”

    I haven’t wondered even a little bit about that for at least thirty years.

    1. Yeah, we just occasionally elect more honest insane people.

      1. Tea party at the white house.

        “Okay, pinkies out.”
        Clock chimes.
        “okay everyone move down one seat…..No, j-just one seat………Joe you’re Supposed to sit in the next seat………God damnit, where the hell is he goin.”

        1. “The capitol of Israel is Jerusalem!”
          “Impeach the crazy Nazi white supremacist!”

  7. In other news, last week was our anniversary so I picked up some roses and a bottle of wine to take home to the wife. She met me at the door in a sheer black negligee and in a husky voice said, “Hello, sailor. See anything you like?” I kinda laughed and told her I saw many things I liked. She said, “Well don’t be shy, you can have anything you like.” I asked her if she really meant that and she said yes so I got back in the car and drove to the store and bought a couple of fucking steaks.

    After we ate the steaks, my wife seemed a little off-put, so I apologized to her for taking the steaks over her, but pointed out that, in fairness, I had sex with her just last month and I don’t when the last time was we could afford steaks. She said, “Well it’s not that, it’s that you had 4 orgasms while you were eating that steak and you’ve never done that with me before.”

    1. I’ll have what he’s having.

    2. Classic fare for the Playboy Jokes section next to the Centerfold!

      I don’t know if they have that anymore though. I haven’t bothered to look for them since they took out the nudity.

  8. Steakholders will rejoice.

    1. Until they get jumped for their steak.

      1. That’s why you use a six-shooter to protect your grub-steak.

    2. Steak can be used to make beef stock, so stockholders will rejoice too.

  9. Everything is coming to a head over the $3.5 trillion budget reconciliation bill, and from what I’m reading, it looks like the whole thing may be falling apart in the House.

    Note, the Democrats can only lose four Democrat votes or it won’t pass, and nine House Democrats are saying they won’t vote for the reconciliation bill until the $1.2 trillion infrastructure bill passes. In order to get it on the agenda, Pelosi had to promise those nine Democrats that she would hold a vote on the infrastructure bill on September 27, 2021 (Monday)–regardless of whether the $3.5 trillion reconciliation bill was ready for a vote. Now Pelosi under intense pressure to renege on her promise to hold a vote on the infrastructure bill on Monday.

    Democrats remain at odds over both the broad contours and the policy specifics of the social-policy package, and both moderate and progressive lawmakers said that they wouldn’t likely reach an agreement in time for a House vote next week.

    “Progressives have threatened to block the $1 trillion infrastructure bill in a bid to pressure moderates to support the $3.5 trillion legislation.

    “That bill, it cannot pass,” Rep. Pramila Jayapal (D., Wash.), the chairwoman of the Congressional Progressive Caucus, said of the infrastructure bill. “It can only come to the floor once everyone’s agreed and once the Senate has voted on” the $3.5 trillion effort.

    https://www.wsj.com/articles/pelosi-plans-votes-on-bidens-spending-plans-next-week-despite-democratic-rifts-11632508557?

    —-About an hour ago

    Pelosi is responding with this:

    “That intensity continues as we move forward to pass two jobs bills next week: the Build Back Better Act and the Bipartisan Infrastructure Framework,” Mrs. Pelosi wrote.

    —-Ibidem

    In other words, she’s planning on holding the votes “next week” despite the progressives. She may try to time the two bills so that they both to go a vote at the same time, but if those nine moderate House Democrats can vote for the infrastructure bill without voting for the $3.5 trillion reconciliation bill, they will. Meanwhile, she needs to get every Democrat to vote to raise the debt ceiling before midnight on October 1st, without any help from the Republicans.

    At this point, I’d bet on the $3.5 trillion reconciliation bill failing. And IF IF IF that happens, it’ll be the best thing that happened in a very, very long time. There will be finger pointing. There will be recriminations. There will be hatred–all of it within the Democratic party. And America will be better off without that bill, even if we end up with another bill about half the size without so much in the way of entitlement expansion and Green New Deal spending.

    1. The caveat of the budget reconciliation process is that it can not be used to increase deficit. Oh wait, they don’t follow the rules.

    2. The national deficit is a pandemic of the establishment. I say kill the patient and save the nation. Triage.

  10. Good news if it works out this way.

    Is it just me, or does every name they come up with make you cringe,”Build Back Better Act and the Bipartisan Infrastructure Framework”?

    1. Bidens build beef back better bill.

      1. How about build better brisket…….

  11. I call bullshit on the new packing plants will sit idle thing.

    The issue is regulatory capture, in that packing plants need to have very expensive FDA inspectors on staff, on site, all the time. In theory, inspection is a thing, but in practice it means that smaller plants cannot compete because they can’t amortize this expense across the massive enterprise like… Tyson, or whoever.

    Evidence? It is not just beef that’s a problem here. Pork prices have skyrocketed and demand is at an all time high. Yet, this year, pork belly prices fell and hog farmers can’t get a slot to butcher their hogs, which they are losing money on. This is a broken market. If someone else was able to jump in with a plant that DOESN’T cost hundreds of millions and require expensive superfluous staffing, they’d do it in a heartbeat. Low cost of goods, record and rising demand, all time high retail prices… NOTHING will make it more attractive to invest. But anyone smaller than these massive guys are locked out of the market.

    1. This is exactly the point that these people don’t get that think we are in a new era where everyone can just go to work for themselves. That only works in a society with small government and minimal regulatory. These people who are holding out and not returning to work because they think they are going to rise above it and become entrepreneurs are in for a rude awakening. The critical mass for startups is well beyond practical for small scale businesses and it will only get worse the way things are going.

      1. What makes it even more paradoxical is that these people are anti-capitalism and pro-communism. They are extremely confused. We are looking at mass cognitive dissonance.

    2. This right here. There is a market for small processors, but the regulatory requirements are staggering, and small processors can’t make any money. Remove half the requirements, and you’d open up the market a bit for smaller operations. The requirement to have an on-site inspector is ridiculous, especially for a processor who’s doing low volume, and has limited customers.

  12. Apparently our Genius in Chief also thinks he can pull semiconductors out of his ass.

    White House Weighs Invoking Defense Law to Get Chip Data

  13. I refuse to believe this dangerous misinformation about inflation.

  14. Prices going up? Don’t worry. The top man is on the job!

    1. The price of beef has just gone up
      And your old lady has just gone down…
      Frank Zappa/ Cosmic debris

      1. And if beef farmers can’t move product, they’ll have to move to Montana, invest in pigmy ponies and Zircon-encrusted tweezers, and a raise up a crop of dental floss. Yippy-yi-yo-tie-yay!

        1. Movin’ to M0ntana soon
          gonna be a denile floss tycoon…..

  15. Well, as we know from the “Relief” bills, when the democrats start talking about subsidies for farmers, we all know that means you don’t qualify unless you have dark skin.

  16. Its not a lack of federal funding that is driving high prices in agriculture, its the 30 by 30 agenda and artificial scarcity of land deliberately induced by the feds. This also happens to be the cause for the housing crisis, but they want the sheeple to believe the suburbs are to blame.

    1. Yep. You can’t have affordable housing and affordable food and open borders and at the same time have entire States with land that is 85-95 percent owned by State and Federal Governments with no development allowed.

      States and Federal Governments need to start parcelling out anything not legitimately claimed by Native American tribes and start auctioning the land off. Done right, this could knock out the National and State Debts and solve the aforementioned problems to boot!

  17. Any time the democrats start talking about subsidies, they are talking about redistribution of wealth schemes that will benefit the few at the expense of the many. Steal from the peasants, give to the entitled. Not exactly what Robin Hood had in mind.

    1. “Dennis Moore, Dennis Moore…”
      https://youtu.be/rJo3wwRCdhU

  18. Prediction: Beef prices will go even higher.

  19. I thought we weren’t supposed to be eating meat anyway, for some reason.

    1. It’s the cow farts.

      At least cows aren’t endangered species – yet. I tell many of my progressive worrynik type friends (vegetarians, mostly) that if they want to save endangered species, we should eat them. There isn’t an animal on this planet that we cultivate for food that is in danger of going extinct.

  20. It is only 0.014% of $3.5 trillion. Why so much fretting over trivialities.

  21. I nominate Patti Hamburg for Beef Czar.

    1. When I was growing up, we had a couple of beef cattle grazing on our friend’s land. We were going to split them 50-50 with him when they were ready to slaughter.

      My sister wanted to name them, so we did. Chuck, and Sir Loin.

      Rest in my deep freezer / belly.

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  23. The government can’t fix anything….it only makes things worse or even wrecks things. The government ruins everything it touches, turns everything it becomes involved with into shit and at the same time claims success all the while wasting billions off dollars in fiat currency to achieve their goals……which is failure.
    Don’t let anyone of those crooked mongrels in Washington tell you anything different. It’s all about spending someone else’s money while they line their own with kickbacks, insider trading and other schemes. Nancy Pelosi is a prime example of such corruption.
    So, I’m avoiding all that self flagellation by not voting. That’s right, I’m staying home on election day, doing essentially the same thing as those who vote, except when I get done masturbating, I’m gonna have a little something to show for it.

    1. Sooo…not governing can also be what people choose to do together too?

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