Last week President Biden signed a broad Executive Order designed to ensure that we have more competitive markets. We have too many huge corporations. They keep buying up their competitors and just get bigger. Smaller companies compete at a disadvantage. Biden says, “Capitalism without competition isn’t capitalism. It’s exploitation.” Antitrust enforcement has been a priority of the President’s agenda. The use of Executive Orders to get something done is not new. For 20 years our presidents – both parties – have used Executive Orders. President Trump was criticized for making too many Executive Orders.
Let’s take a look at what President Biden’s Orders could mean to the food and ag industry. Farmers and ranchers have been very vocal about the market’s failure to give them the prices they feel are justified – especially for beef, pork, and dairy. The number of companies that sell chemicals and seeds has been on a constant decline for more than 20 years. The Covid-19 pandemic reminded us that we need more processing capacity. Meat producers lost a lot of money. The Secretary of Agriculture said it was time to “level the playing field for farmers and ranchers.” I know farmer friends that had to depopulate their pigs. There wasn’t anyone to process them. Just four meatpacking companies in the U.S. control 80% of the beef market. Four companies control most of the world’s seed.
Farmer’s share of each dollar spent on food continues to decline. Farm and ranch organizations are cheering for the Biden Executive Orders. Even Zippy Duvall, President of the American Farm Bureau stepped up to support the President’s effort. The National Farmers Union is very excited. I say don’t get too excited. Executive Orders can be changed by the next President or by the Courts. Laws passed by Congress are much more durable. Controlling huge corporations with all their power will not be easy.
Another subject that we need to keep an eye on – Cuba.
Wild street protests are shaking up that communist dictatorship. So far, President Biden has not indicated how he will react. It would be good if we had more trade with Cuba, but their government cannot be trusted.
John Block served as Secretary of the U.S. Department of Agriculture from 1981-1985, where he played a key role in the development of the 1985 Farm Bill. John hosts a weekly radio show going back more than 20 years. The commentary and opinions shared are a summary of the discussion from the broadcast and not a reflection of the opinions of the firm at large. For more from John Block Reports from Washington visit www.johnblockreports.com.