It’s not just you: All across the country, it costs more to heat our homes, fill up our gas tanks and feed our families. This has prompted waves of tedious finger-pointing among pundits, economists and political opportunists. Some say President Joe Biden is to blame for this wave of inflation, while others warn that Democrats should be careful not to exaggerate how much power big corporations have to set prices.
All of this hot air doesn’t change anything for working people who are getting squeezed, and it lets these powerful companies off the hook by suggesting that their brazen profiteering is just as natural as the change of seasons. The truth is that when it comes to some key parts of our economy — food and fuel, for example — a handful of megacorporations are calling the shots, and that’s costing all of us dearly.
Dominant players in the food industry were well-known long before this pandemic profiteering. In a report last fall, Food &Water Watch examined the market share of the dominant companies across 55 grocery categories, everything from vegetable side dishes to milk and yogurt. We found that just four companies account for three-quarters of all yogurt sales, three companies control most of the baby formula market, and PepsiCo captures nearly 90% of all dip sales.
That’s the power to effectively name your price. And over the past two years, amid a deadly pandemic, corporate powers did just that. The cost to feed a family of four increased by one-third over this period, while beef, pork and poultry prices rose between 20% and 30%.
Energy costs grew 20%, and the price of gasoline was up 30%. It’s no coincidence that corporate profits in those sectors are soaring. While we dealt with the lingering effects of a debilitating pandemic, these companies were soaking consumers and shoveling money to executives and shareholders, while stiffing many of their workers in the process. Oil and gas giant ExxonMobil posted a profit of almost $9 billion in the fourth quarter of last year alone, and $23 billion for all of 2021. Profits for the top grocery chains and food companies were similar. Tyson Foods — one of the four companies that control the U.S. beef market — posted astonishing returns that are prompting some long overdue government scrutiny.
In December, the White House released an analysis showing that the meat processing giants have seen the pandemic as a chance to plunder: Gross profits increased more than 120% since before COVID-19, with net income surging 500%.
Many of these companies will tell you that costs are increasing because workers are expensive and supply chain disruptions make it hard to get materials. But they tell a different story to their investors. Tyson, for instance, explained on one earnings call that its price hikes go beyond the additional costs it is incurring. And wages across many parts of these industries remained stagnant.
That is all music to the ears of Wall Street investors — and it should enrage the rest of us. So what can be done about it? The White House has, in fits and starts, begun to lay out a domestic plan to curb the powers of monopolists, especially in the food business.
But what U.S. consumers need is real action. We need food policies that reward farmers who have been shortchanged by monopolistic meat giants for decades, and we need to build resilient local economies based on shared prosperity for all.