USDA prepared to issue subpoenas in beef price-gouging investigation

The department is exploring the impact of food system consolidation as it looks to “more vigorously enforce” competition rules in the meat and grocery industries.

The threat of subpoenas comes as the USDA deepens its investigation into whether consolidation in the meatpacking and grocery industries has allowed big companies to manipulate prices through illegal tactics.

Four meatpacking companies harvested 81% of the nation’s beef in 2021, according to the USDA’s interim report on market concentration. The effect of these companies’ staggering influence came into full picture during the COVID-19 pandemic, when outbreaks shuttered processing plants, created grocery store shortages and sent consumer meat prices soaring.

While policymakers have paid considerable attention to consolidation in the meatpacking industry, concentration in the grocery and food distribution sectors are also seen as significant barriers to entry for independent processors. Producers interviewed by the USDA say they must pay a range of fees to retailers and distributors to secure their products on grocery store shelves, in effect giving preference to the largest processors who have deeper pockets.