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The Institute for Agriculture and Trade Policy (IATP) thanks the USDA for seeking input on how to strengthen and secure agriculture and food supply chains. IATP is a 35-year-old non-profit 501(c)3 organization based in Minneapolis, Minnesota. IATP works to ensure fair and sustainable food, farm and trade systems.

Major disruptions to our food system from the COVID-19 crisis, severe climate-related events (including the current drought), and recent trade fights have made clear the fragility of our food and agriculture supply chains. These disruptions come on the heels of seven straight years of low prices (although prices have risen somewhat in recent months) for farmers, often below the cost of production, and rising debt and farm bankruptcies. A series of antitrust, bid rigging and price-fixing investigations, particularly in raw milk and poultry, reveal an agricultural marketplace that is controlled by a handful of global companies to the detriment of farmers and consumers.

Our current food supply chains are the result of deliberate policy choices made within the Farm Bill, trade, labor, health, environmental, antitrust and competition policies and enforcement. To make supply chains more resilient will require a clear-eyed view of what outcomes we want, and what policy changes are necessary to get there. IATP believes there are clear vulnerabilities to long (often global), highly concentrated supply chains controlled by multinational companies that are not motivated by the public interest. A more decentralized system, with more redundancy combined with regional or local ownership, can be more accountable to public interest goals for a fair, environmentally sustainable, healthy food system.

IATP’s comment below focuses on the need to address excess corporate concentration within the food and agriculture sector; the inherent risks of large-scale confined animal feeding operations (CAFO) to supply meat, poultry and milk; the necessity to expand workers’ rights and empowerment for stronger supply chains; and reforms to farm policy programs to emphasize resilience.

In nearly every sector of our food system, a handful of large corporations control much of the production, processing and distribution.1 Many of these corporations are multinational companies, with operations and subsidiaries that may or may not support U.S. food system policy priorities. There are significant risks to granting control of food supply chains to multinational companies (including those with U.S. headquarters) that have a fundamentally different set of priorities than those of any nation, region or community. The recent COVID-19 related disruptions revealed some of the vulnerabilities of this type of system.

Many of the questions asked in the federal register notice cover overlapping issues. To avoid repetition by going question by question, we responded to multiple questions at once, outlining here what we see as key supply chain challenges and opportunities to build a more resilient food system supply chain.

Supply chain secrecy — Almost from the outset of the pandemic outbreak, meat companies, particularly global pork giant Smithfield, demanded that meat processing plants be exempted from public health restrictions that could have limited their operations, warning of potential U.S. supermarket meat shortages. Other global meat companies, including JBS, Cargill and Tyson joined this call. President Donald Trump signed an Executive Order ordering the packing plants to operate at the risk of spreading the COVID-19 contagion from plant workers to their families and communities. Even if we were to accept the questionable premise that the availability of meat supplies must override public health protection considerations, in this case, there was no clear data or evidence that an actual U.S. meat shortage existed.

The USDA National Agricultural Statistics Service (NASS) issues monthly reports on Cold Storage surveys of commercial and public warehouses for meat (and dozens of other commodities) — which provides some information on how much meat is available in the U.S. It does not provide company specific cold storage data or how much a particular company may have in cold storage in another country that could be imported into the U.S. In February 2020, cold storage data showed the U.S. had 650 million pounds of frozen pork, up from 500 million pounds in 2017. While levels of pork in cold storage dropped throughout 2020, levels never reached below 400 million pounds in cold storage.2 Those supplies in cold storage could have been used to allow companies to slow processing lines and provide additional protective equipment and testing for workers. But it turned out these global companies, who had aggressively lobbied to keep their operations open, had another objective — to expand exports.

National level export data later indicated that while these companies were warning of shortages, they were also exporting large quantities of meat, including to China.3 Overall, U.S. agriculture exports had its second highest level on record in 2020, and pork exports were up 11%.4 And of course, with integrated operations in multiple countries including Mexico and Canada, these companies always had the option of importing meat from their other operations to address any shortages. It turned out that the meatpacking plant workers, largely immigrants and refugees, were risking their health and that of their families and communities not just to fill U.S. supermarkets, but also to expand foreign sales during a crisis. The meat supply chain “managed” the COVID-19 shock, not by slowing down production or using U.S. cold storage supplies, but by risking the health of its workers and their communities.

Recommendation: The lack of reliable, transparent information about the U.S. meat supply during the pandemic was alarming and revealed an enormous vulnerability. The USDA should examine whether its Cold Storage survey data is adequate to assess meat supplies for the nation, what percentage of meat in storage and production is headed for export, and what additional information is needed to better understand supplies and associated risk. The U.S. must develop with public input a policy for the use of Cold Storage supply as part of an overall food policy to apply during presidentially declared National Emergencies. Because public health experts anticipate future pandemics, the U.S. must never again endanger its public health by allowing food companies to maximize production for export and to receive federal protection from liability from harm to worker and community health, and the economic consequences of that harm. 

Multiple risks of concentrated production — Several additional issues emerged from the COVID-19 crisis about the risks of highly concentrated market share meat production. While pandemic-related shutdowns of meatpacking plants clearly affected workers, it also affected the large-scale concentrated animal feeding operation (CAFO) system that supplies livestock to those plants. Both farmers and animals paid a price and remain vulnerable if new shutdowns were to occur. A massive culling of millions of poultry and hogs was necessary when processing plants closed even for a few weeks.5 There was nowhere else for these producers to take their animals because most small and mid-sized meat processing plants were run out business over the last several decades by these global companies. The loss of small and mid-sized processing plants hurts larger CAFO producers, but it also hurts smaller scale producers, who during COVID-19 were often closed out of their traditional processors. These smaller scale producers now can face wait times of over a year to get their animals to the processor, incurring more feeding costs and animal health risks during the prolonged wait.

Numerous risks to our concentrated meat supply chain remain. Recently, poultry markets appeared to see shortages attributed to worker-related disruptions (caused in large part by concerns over low pay and poor working conditions),6 and extreme weather events in the southern U.S.7 The U.S. beef industry is now facing challenges with a major drought hitting 60% of the nation’s cow herd, necessitating tough decisions about culling cattle as they struggle to find water and pasture.8 And JBS, the largest meat producer in the U.S., was recently hit by a cyber-attack forcing the closure of all of its beef packing plants and many of its pork and poultry plants as well.9 JBS controls 20% of U.S. beef production.10

Recommendation: The USDA can play a major role in building more resilient supply chains by diversifying meat processing capacity specifically by supporting small to mid-sized processors to get established and grow in all federal states. A processing resilience grant program, outlined in the Agriculture Resilience Act, would be a good start.11 A COVID-19 outbreak, food contamination spread or climate-related weather event should not cripple an entire supply chain due to meatpacking oligopolies.

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