White House 'Strike Force' on Inflation

OMAHA (DTN) -- USDA is issuing a final rule on Tuesday further prohibiting discrimination and retaliatory practices under the Packers and Stockyards Act as part of a Biden administration's launch of a "strike force" looking to take on unfair and illegal "corporate rip-offs."

The White House rolled out plans for the task force on inflation challenges as President Joe Biden looks for ways to highlight that the administration is trying to reduce high prices facing consumers. The effort comes as Biden will hold his State of the Union address on Thursday and is already facing a likely close presidential challenge next fall from former President Donald Trump.

The White House has been looking for ways to counter inflation that has plagued consumers over the past three years. USDA's work on competition is linked to attempts to reduce higher food prices.

"USDA's work across the agricultural supply chain helps support more competition, which can lower food prices," according to a White House fact sheet.

Still, food inflation has been one of the biggest challenges facing consumers in the past two years. Food prices rose 9.9% in 2022 -- faster than any year since 1979. In 2023, food prices rose 5.8%, and in 2024, food prices are expected to rise about 2.9%. Combined, that's an average food price increase of 18.6% over a three-year stretch, according to USDA's Economic Research Service.

In a call with reporters, administration officials said supply chains have normalized and inflation has slowed, but "some corporations aren't passing those savings on to consumers," said Lael Brainard, director of the National Economic Council.

Other officials said the administration is "taking on junk fees across the economy."

NEW PACKER RULE ON DISCRIMINATION

On Tuesday, USDA will finalize a rule known as "Inclusive Competition and Market Integrity" under the P&S Act. The rule is meant to protect livestock producers and poultry growers from acts of discrimination as well as retaliatory actions. It would prevent packers from taking action against producers who file a grievance with government officials or join an association or cooperative, for instance. The rule also addresses deceptive practices such as false or misleading statements in contracts tied to performance or terminating a contract. The rule will go into effect in May.

The North American Meat Institute, the largest lobbying group for meatpackers, on Tuesday responded to the new rule, saying it does nothing to encourage competition but instead gives USDA new authority "to exert federal control over business contracts."

Julie Anna Potts, president and CEO of NAMI, said the administration's pursuit of P&S changes as well as regulations over pork inspections and EPA proposed waste-water rules all end up adding costs to consumers.

"The Biden administration says these changes to the PSA's regulations are about increasing competition, but they have nothing to do with competition," said Potts. "These changes are simply an attempt to assert even more federal authority to regulate the equities of industry business practices, clogging the federal courts with every contract dispute. Congress never intended to give the agency such broad-ranging authority over meat industry contracts and practices, regardless of their effect on competition -- and the courts have agreed."

Provisions of the new rule were used last fall in a collaboration between USDA and the Department of Justice to settle with Koch Foods, one of the country's largest chicken processors. It stopped Koch from threatening farmers with financial "exit penalties" for trying to switch to different processors.

Agriculture Secretary Tom Vilsack said the new P&S rule "is going to help producers and growers who have become increasingly vulnerable to a range of practices that unjustly exclude them from economic opportunity and disadvantage them and undermine the integrity in the livestock and poultry industry."

The North American Meat Institute, the largest lobbying group for meatpackers, on Tuesday responded to the new rule, saying it does nothing to encourage competition but instead gives USDA new authority "to exert federal control over business contracts."

Julie Anna Potts, president and CEO of NAMI, said the administration's pursuit of P&S changes as well as regulations over pork inspections and EPA proposed waste-water rules all end up adding costs to consumers.

"The Biden administration says these changes to the PSA's regulations are about increasing competition, but they have nothing to do with competition," said Potts. "These changes are simply an attempt to assert even more federal authority to regulate the equities of industry business practices, clogging the federal courts with every contract dispute. Congress never intended to give the agency such broad-ranging authority over meat industry contracts and practices, regardless of their effect on competition -- and the courts have agreed."

COMPETITION PUSH

Looking at other areas related more closely to consumers, the White House will hold its sixth Competition Council meeting on Tuesday and will detail new rules or actions across other areas of government involving "junk fees," excessive credit card fees and "bulk billing" in areas such as internet or cable service. In the junk fee area, the White House is trying to stop extra fees added to everything from car rentals to online ticket prices.

A key focus that administration officials are stressing is a new Consumer Financial Protection Bureau push to go after high credit card late fees. The new rule will roll back average late fees from $31 per charge down to an average of $8.

The White House also spotlighted a rule by the Federal Maritime Commission that will go into effect in May under the Ocean Shipping Reform Act. It provides more details when shippers, such as agricultural exporters or retailers, can be billed by ocean carriers for their cargo.

In 2021 and 2022, as inflation was rising coming out of the COVID-19 pandemic, exporters such as farmers and others were left with goods stuck at U.S. ports as global shippers instead hauled empty containers back to Asia rather than filling them with goods. Shippers were charged billions in demurrage and detention fees even though companies were declining to load U.S. goods at ports.

In a nomination hearing last week, Sen. Maria Cantwell, D-Wash., questioned Federal Maritime Commissioners over progress in writing new rules to protect shippers such as farmers.

"Cargo stranded at ports harm American shippers. They harm our farmers, our fishermen, our businesses that rely on those ocean carriers to get their products to markets across the globe," Cantwell told commissioners. "Focus on protecting American businesses."

Chris Clayton can be reached at Chris.Clayton@dtn.com

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