NOVEMBER 2023

A GREEDFLATION REPORT:STUFFING THEIR POCKETS

HOW BIG FOOD AND AGRICULTURE BUSINESSES ARE

MAKING YOUR HOLIDAY MEALS MORE EXPENSIVESENATOR BOB CASEYCHAIRMAN, SUBCOMMITTEE ON CHILDREN & FAMILIESHEALTH, EDUCATION, LABOR, & PENSIONS COMMITTEEINTRODUCTION
As the holiday season approaches, many families will find that their favorite foods are more
expensive than at almost any point before. While the price of many goods have increased inrecent years, the price of food has risen faster than most others, straining family budgets
and taking a bite out of holiday celebrations. While turkey prices have fallen this year,
families are still paying higher prices than they did in 2020.1 Prices for other holiday meal
staples, including chicken, pork, and potatoes, are rising faster than headline inflation,2earning companies billions and costing consumers.
This report examines how the agribusiness companies that process Americans’ food haveincreased prices for everyday staple foods and raises questions about why those priceincreases are necessary. These same companies have a history of engaging in price-fixing, 3colluding to raise prices,4 anti-competitive conduct,5 and touting their ability to raise prices
without limit.6

PERCENT PRICE CHANGE SINCE JANUARY 2020
SOURCE: FEDERAL RESERVE FRED DATABASE

1.

CHICKEN
PRICES ARE UP
Chicken processing corporations are raising their prices above the cost of inflation. Since
January 2020, inflation overall has risen 19 percent.7 But over the same period of time theprice for boneless chicken rose 38 percent, twice as much as inflation.8 In October 2023,
Reuters reported that:As Reuters reports and government data confirms,10 the price for whole chickens has reachedrecord highs, meaning that Americans now pay 35 percent more for a pound of chicken thanthey did in 2020.

PROFITS ARE UP
Higher prices have meant higher profits for chicken producers. Tyson Foods, the largest
producer of chicken in the US and one of the largest producers of beef and pork, doubled its
11
profits in the final quarter of 2021 and then reported record sales and earnings 2022, thelast full year available.12
Pilgrim’s Pride, the second-largest chicken producer in the US,
saw its net revenue increase by 53 percent in just three years
from 2019-2022.13
Even as consumer prices remain high, today it is cheaper forcompanies to feed their chickens. Corn is one of most common
ingredients in chicken feed.14 Last month, corn feed prices were
down 27 percent from the previous year 15 and global corn prices
are at the lowest level since December 2020.16
2.

DEMAND IS HIGH
17For decades now, Americans have consumed more chicken per capita than any other meat.
Even as chicken prices rose to historic highs in 2022,18 demand for chicken continued togrow. The US Department of Agriculture now projects that consumption of chicken will
surpass 100 pounds per person in 2023, which would be a record.19 Persistent and growing
demand for chicken is reflected in the National Chicken Council’s 2023 “Chicken Wing
Report,” which predicted that during the Super Bowl LVII weekend Americans would eat a“record-breaking” 1.45 billion chicken wings, or four for every person in the United States.20

WHAT ARE COMPANIES DOINGTO KEEP PRICES HIGH?
With prices high, demand high, and feed costs falling, itwould be reasonable to think that companies would expandproduction. The opposite seems to be true in some cases,
and certain companies are restricting supply to drive prices
even higher. Businesses can inflate prices and profits byeliminating competition and coordinating with competitors
to raise prices. The chicken industry has been accused orfound guilty of doing all of the above in recent years.
In 2021, Cargill Inc. and Continental Grain Company purchased Sanderson Farms Inc., thenumber three chicken producer in the Nation, merging it with Continental subsidiary
Wayne Farms to create a new poultry business. 21 Per Forbes, this move “push[ed] themarket share of the top four competitors to more than 60% from about 50%.” 22 This
increasingly leaves growers, workers, and consumers at the mercy of a consolidated
industry that can constrict supply to increase profits rather than focus on increasing
supply to meet rising demand.
Pilgrim’s Pride, the number two chicken producer, was ordered to pay a $107 million
criminal fine by the Department of Justice (DOJ) in 2021 for its participation in aconspiracy to fix prices and rig bids for broiler chicken products.”23 In 2021, Tyson, thenumber one chicken producer in the US, paid $221.5 million to restaurants andsupermarkets to settle claims it illegally conspired to inflate chicken prices,24 and then in
2022 it paid to settle a similar lawsuit brought by the state of Washington. 25
3.

Tyson announced in mid-2023 its plans to close six chicken plants across Virginia,Arkansas, Missouri, and Indiana, laying off thousands of workers.26 In October, Tyson
also said that it would be laying off hundreds of additional workers at a plant in NorthCarolina. 27 With demand and prices still at or near record highs, cuts to operations are
expected to boost the bottom lines of companies like Tyson and Pilgrim’s Pride while
continuing to harm everyday Americans. 28 Other producers have also closed multiple
chicken plants since 2021.29
Finally, the Department of Justice recently
initiated a lawsuit that suggests almost theentire chicken, turkey, and pork industry areengaged in price-fixing practices. The DOJ
says the industry sent “sensitive information
related to price, cost and output” to a firm
called Agri Stats Inc., which then told them
how much they should charge for their products. According to the Department of Justice:“Executives at some of the country’s largest meat processors testified that they could notrecall any examples in which their companies used Agri Stats information to lower theirsales prices to gain market share. An executive at Smithfield, a pork processor, summarized
Agri Stats’ consulting advice in four words: “Just raise your price.” 30

4.

PORK
PRICES ARE UP
If Pennsylvanians want a pork roast on the holiday table this year, they will have to pay
extra. Pork chop costs are up 28 percent since 2020 31 and bacon prices were up 30 percent
for most of 2022 and are now up 29 percent since 2020.32 It has, quite literally, gotten
harder for working Americans to bring home the bacon.

PROFITS HAVE BEEN STRONG
Smithfield, the largest pork producer in the US, which is owned by Chinese company WHGroup, made profits of over $1 billion in 2021,33 which then grew 34 percent to $1.4 billion in34
2022.
As pork prices grew and U.S. demand dipped, American pork processors were able to leanon foreign markets to sell their products, particularly in China. However, China’s restorationof higher tariffs on pork imports in 2022 reduced international demand and increased thedomestic supply of pork.35 Per the basic idea of supply and demand, we would expect that asudden increase in supply would result in lower prices for consumers. Yet, as with chicken,that is not the case. As the Wall Street Journal noted, “the glut of pork on the market has yet
to translate into lower prices for consumers.” 365.

WHAT ARE COMPANIES DOINGTO KEEP PRICES HIGH?
Like the chicken industry, the pork processing industry is similarly concentrated. Per datafrom the U.S. Department of Agriculture’s Economic Research Service, 67 percent of pork
processing in 2019 went through the four largest companies, compared to 34 percent in37
1980.
Rather than cutting prices, the industry seems determined to cut production, reducing
capacity while keeping costs high for consumers. In August, Perdue Farms announced that it
would be closing a factory in Michigan that processed ham, sausage, and other pork
products, laying off 132 workers. 38 Smithfield Foods Inc., the world’s largest pork producer, isclosing 35 farms across Missouri, 39 and in October announced it would be closing its
40
Charlotte-based processing plant. While these decisions might help reduce the overhead
costs and overall supply for producers and processors, it will only exacerbate demand issues
by keeping prices high for consumers.
Unfortunately for consumers, the industry has a history of illegally inflating prices and has
faced some consequences for price-fixing. In 2021 and 2022, pork giant JBS settled pricefixing lawsuits for $20 million and $13 million, while Smithfield paid two different groups ofpork consumers $83 million and $42 million in 2021 and 2022. 41 In another lawsuit late lastyear, McDonald’s, the maker of the McRib, accused the pork giants of working together toinflate the price of their product.42 Pork producers are also implicated by the Department ofJustice in the Agri Stats price collusion lawsuit. This suit argues that they have been, and arecurrently, working with their competitors to keep prices high.

6.

POTATOESPRICES ARE UP
This holiday season, it will cost more than ever to put mashed potatoes on the dinner table.
43
According to news reports, the price of potatoes are up over 60 percent compared to lastyear.

PROFITS ARE UP
Higher potato prices have meant huge
profits for Lamb Weston Holdings, thelargest frozen potato provider in thecountry. Its most recent quarterly reportnotes that net income soared 111 percent
compared to a year before, which their CEO
attributed to “the carryover benefit of pricing actions initiated last year.” 44
In its yearly shareholder statements, Lamb Weston noted that it has greatly outperformed
the S&P 500 over the past several years because its potatoes are “one of the highestmargin food items on the menu.” 45CONSUMERS HAVENOWHERE TO GO
Potatoes are historically an inexpensive food people can turn to when prices rise. With prices
for most other foods increasing as well, while potatoes are no longer the budget-friendly
option they used to be, consumers don’t have many other low-cost choices. As one analyst
notes, “Although consumers will pay higher prices for fresh potatoes, french fries, and otherfrozen potato products, they are not expected to reduce their potato consumption. The
potato is extra precious during a period of inflation, when consumer purchasing power iseroded.” 46 They note that despite record prices, this season’s crop is the smallest since2010. Potato production has been falling every year since 2018. 47

7.

CONCLUSIONConsumers pay the price for corporate greed. While inflation has stressed family budgets inrecent years, data shows that it has recently moderated. Despite this drop, consumers arestill feeling pinched because many corporations continue to raise prices on consumers—notto offset inflation—but to increase their own profits. This practice, known as greedflation, iscosting American consumers more than ever. Senator Casey’s previous report on
greedflation found that corporate profits accounted for all the inflation in the first year of thepandemic recovery (roughly July 2020 to July 2021) and 41 percent of inflation overall in thefirst two years of the post-pandemic recovery (July 2020 to July 2022). For the average
Pennsylvania family, costs went up by $3,194 in 2021 and by $3,546 in 2022 just due tocorporate profiteering. 48
As we can see in the food industry, there is no shortage of ways for corporations to raise
prices on consumers. Senator Casey has a four-pronged strategy to provide hardworking
American families with relief from greedflation: putting more money in the pockets ofworking families, making big corporations pay their fair share, fighting unfair price gouging,and taking on corporate monopolies to increase competition and lower costs. Senator Casey
also believes we need stronger enforcement of our existing consumer protection laws bythe Federal Trade Commission, Department of Justice, and Department of Agriculture.
Senator Casey will continue to fight to lower prices for consumers, especially at the dinnertable, and to put money back in the pockets of working families—where it belongs.

8.

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10.

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