    [House Hearing, 118 Congress]
    [From the U.S. Government Publishing Office]

                        WHERE'S THE BEEF? REGULATORY BARRIERS TO
                         ENTRY AND COMPETITION IN MEAT PROCESSING

    =======================================================================

                                    HEARING

                                   BEFORE THE

                     SUBCOMMITTEE ON THE ADMINISTRATIVE STATE,
                        REGULATORY REFORM, AND ANTITRUST

                           COMMITTEE ON THE JUDICIARY

                         U.S. HOUSE OF REPRESENTATIVES

                        ONE HUNDRED EIGHTEENTH CONGRESS

                                 FIRST SESSION

                                   __________

                             TUESDAY, JUNE 13, 2023

                                   __________

                               Serial No. 118-26

                                   __________

             Printed for the use of the Committee on the Judiciary

    [GRAPHIC NOT AVAILABLE IN TIFF FORMAT]

                   Available via: http://judiciary.house.gov

                                  __________

                        U.S. GOVERNMENT PUBLISHING OFFICE
    52-864                     WASHINGTON : 2023

    -----------------------------------------------------------------------------------

                           COMMITTEE ON THE JUDICIARY

                            JIM JORDAN, Ohio, Chair

    DARRELL ISSA, California             JERROLD NADLER, New York, Ranking
    KEN BUCK, Colorado                       Member
    MATT GAETZ, Florida                  ZOE LOFGREN, California
    MIKE JOHNSON, Louisiana              SHEILA JACKSON LEE, Texas
    ANDY BIGGS, Arizona                  STEVE COHEN, Tennessee
    TOM McCLINTOCK, California           HENRY C. ``HANK'' JOHNSON, Jr.,
    TOM TIFFANY, Wisconsin                   Georgia
    THOMAS MASSIE, Kentucky              ADAM SCHIFF, California
    CHIP ROY, Texas                      ERIC SWALWELL, California
    DAN BISHOP, North Carolina           TED LIEU, California
    VICTORIA SPARTZ, Indiana             PRAMILA JAYAPAL, Washington
    SCOTT FITZGERALD, Wisconsin          J. LUIS CORREA, California
    CLIFF BENTZ, Oregon                  MARY GAY SCANLON, Pennsylvania
    BEN CLINE, Virginia                  JOE NEGUSE, Colorado
    LANCE GOODEN, Texas                  LUCY McBATH, Georgia
    JEFF VAN DREW, New Jersey            MADELEINE DEAN, Pennsylvania
    TROY NEHLS, Texas                    VERONICA ESCOBAR, Texas
    BARRY MOORE, Alabama                 DEBORAH ROSS, North Carolina
    KEVIN KILEY, California              CORI BUSH, Missouri
    HARRIET HAGEMAN, Wyoming             GLENN IVEY, Maryland
    NATHANIEL MORAN, Texas               Vacancy
    LAUREL LEE, Florida
    WESLEY HUNT, Texas
    RUSSELL FRY, South Carolina

                                     ------

                   SUBCOMMITTEE ON THE ADMINISTRATIVE STATE,
                        REGULATORY REFORM, AND ANTITRUST

                         THOMAS MASSIE, Kentucky, Chair

    DARRELL ISSA, California             Vacancy, Ranking Member
    KEN BUCK, Colorado                   HENRY C. ``HANK'' JOHNSON, Jr.,
    MATT GAETZ, Florida                      Georgia
    MIKE JOHNSON, Louisiana              ERIC SWALWELL, California
    DAN BISHOP, North Carolina           TED LIEU, California
    VICTORIA SPARTZ, Indiana             PRAMILA JAYAPAL, Washington
    SCOTT FITZGERALD, Wisconsin          MARY GAY SCANLON, Pennsylvania
    CLIFF BENTZ, Oregon                  JOE NEGUSE, Colorado
    LANCE GOODEN, Texas                  LUCY McBATH, Georgia
    JEFF VAN DREW, New Jersey            ZOE LOFGREN, California
    BEN CLINE, Virginia                  STEVE COHEN, Tennessee
    HARRIET HAGEMAN, Wyoming             GLENN IVEY, Maryland
    NATHANIEL MORAN, Texas

                   CHRISTOPHER HIXON, Majority Staff Director
              AMY RUTKIN, Minority Staff Director & Chief of Staff

                               C O N T E N T S

                                  ----------

                             Tuesday, June 13, 2023

                                                                       Page

                               OPENING STATEMENTS

    The Honorable Thomas Massie, Chair of the Subcommittee on the
      Administrative State, Regulatory Reform, and Antitrust from the
      State of Kentucky..............................................     2
    The Honorable Jerrold Nadler, Ranking Member of the Committee on
      the Judiciary from the State of New York.......................     3
    The Honorable Jim Jordan, Chair of the Committee on the Judiciary
      from the State of Ohio.........................................     4

                                   WITNESSES

    Joel Salatin, Co-Owner, Polyface Farm, Swoope, Virginia
      Oral Testimony.................................................     5
      Prepared Testimony.............................................     8
    Rosanna Bauman, Co-Owner/General Manager, Bauman's Cedar Valley
      Farm, Garnett, Kansas
      Oral Testimony.................................................    11
      Prepared Testimony.............................................    13
    Joe Trotter, Director, American Legislative Exchange Council,
      Energy, Environment and Agriculture Task Force
      Oral Testimony.................................................    23
      Prepared Testimony.............................................    25
    Greg Gunthorp, Owner/Artisan Farmer, Gunthorp Farms, LaGrange,
      Indiana
      Oral Testimony.................................................    29
      Prepared Testimony.............................................    31

              LETTERS, STATEMENTS, ETC. SUBMITTED FOR THE HEARING

    All materials submitted for the record by the Subcommittee on the
      Administrative State, Regulatory Reform, and Antitrust are
      listed below...................................................    58

    A collaborative letter from organizations recommending reforms
      regarding meat processing, June 13, 2023, submitted by the
      Honorable Henry C. ``Hank'' Johnson, Jr., a Member of the
      Subcommittee on the Administrative State, Regulatory Reform,
      and Antitrust from the State of Georgia, for the record

                     WHERE'S THE BEEF? REGULATORY BARRIERS
                          TO ENTRY AND COMPETITION IN
                                MEAT PROCESSING

                                  ----------

                             Tuesday, June 13, 2023

                            House of Representatives

                   Subcommittee on the Administrative State,

                        Regulatory Reform, and Antitrust

                           Committee on the Judiciary

                                 Washington, DC

        The Subcommittee met, pursuant to notice, at 10:08 a.m., in
    Room 2141, Rayburn House Office Building, Hon. Thomas Massie
    [Chair of the Subcommittee] presiding.
        Present: Representatives Massie, Jordan, Issa, Buck, Gaetz,
    Spartz, Fitzgerald, Bentz, Cline, Hageman, Nadler, Johnson of
    Georgia, Jayapal, Correa, Scanlon, and Ivey.
        Also present: Representative Tiffany.
        Mr. Massie. The Subcommittee will come to order.
        Without objection, the Chair is authorized to declare a
    recess at any time.
        Without objection, the gentleman from Wisconsin, Mr.
    Tiffany, will be allowed to participate in today's hearing.
        We welcome everyone to today's hearing on the regulatory
    barriers to entry and competition in meat processing. I
    anticipate this will be a very bipartisan Committee hearing,
    and I want--so I want to begin with a quotation from President
    Biden's State of the Union in 2022. He's very aware of the
    problem that we're trying to address here today. He said in his
    State of the Union:

            When corporations don't have to compete, their profits go up,
            and your prices go up when they don't have to compete. Small
            businesses and farmers and ranchers--I need not tell some of my
            Republican friends from those States, guess what, you got four
            basic meatpacking facilities. That's it. You play with them, or
            you don't get to play at all. You pay a hell of a lot more. A
            hell of a lot more because there's only four.

    So, that's from our President, Joe Biden.
        Just a housekeeping thing to begin with, I'm going to keep
    the Members to five minutes as much as I can with the gavel,
    but if in five seconds you ask an existential question to a
    witness and they need more than four seconds to respond, we
    will let the witness finish their answer. So, I know we're
    famous for doing that.
        I will now recognize myself for an opening statement.
        In today's hearing, we will explore how various laws create
    barriers to entry and expansion in the meat processing
    industry. Federal laws concerning meat processing needlessly
    undercut federalism by requiring that State-enforced
    requirements are at least equal to Federal requirements. These
    one-size-fits-all regulatory barriers entrench the largest meat
    processors and prevent small independent processors from
    competing effectively.
        Allowing States to set their own regulatory standards means
    that small processors would likely flourish and would be able
    to better serve ranchers and farmers and the consumers who want
    to buy the food from them.
        During COVID, we saw the results of having only a few large
    facilities and not enough functioning small facilities. Large
    facilities with employees in close quarters struggled through
    the outbreaks and at times slowed or even stopped operations.
    Some farmers and ranchers were forced to take extreme and
    costly measures, such as euthanizing livestock. For farmers who
    care about their animals--and most farmers do--this was a
    terrible situation to be in, to euthanize livestock instead of
    to have them go serve as nutrition for consumers.
        Consumers saw meat become less affordable, if they could
    find it in the grocery store shelves. Removing artificial and
    unnecessary restrictions and regulations will help encourage
    smaller-scale processing. Increasing the number of small-scale
    processors will help counteract disruptions in the supply
    chain.
        It's important to note that deregulation will not result in
    compromised food safety. State and local health agencies will
    inspect independent processors to ensure they are meeting
    safety standards. Small custom slaughterhouses have been
    operating safely for decades. We're going to hear from some of
    the owners of these small slaughterhouses.
        Federal and legislative regulatory reform would benefit
    farmers and ranchers and allow a broader variety of local,
    safe, and humane meat to reach the American people. There's
    bipartisan agreement about some of the problems in the
    meatpacking industry. Just four companies account for over 80
    percent of beef processed in the United States. Similarly, four
    companies process approximately 70 percent of hogs.
        Of these companies that I mention, one is owned by China,
    and one is owned by Brazil. These companies process most of the
    meat in just a few massive facilities. Less than 10 percent of
    the facilities in the United States process over 95 percent of
    all cattle. Less than five percent of facilities in the U.S.
    process over 90 percent of all hogs.
        There's also bipartisan agreement about some of the
    solutions. The bipartisan Processing Revival and Intrastate
    Meat Exemption Act, or PRIME Act, is one of the proposals that
    would increase competition and enhance consumer choice.
        Today we have the opportunity to hear from our witnesses
    about their real-world experiences, their work in the meat
    industry, and the difficulties they face. A better
    understanding of these issues will aid us as we work to make
    impactful change and find solutions that benefit processors,
    ranchers, farmers, and consumers.
        I now recognize the Chair of the Full Committee--or the
    Ranking Member--sorry, I almost gave him a promotion that Mr.
    Jordan would not approve of.
        Mr. Nadler. It's OK. It's OK.
        Mr. Massie. I now recognize the Ranking Member of the Full
    Committee for an opening statement.
        Mr. Nadler. Thank you, Mr. Chair.
        Mr. Chair, as we examine barriers to entry and competition
    in the meat processing industry, we should focus our attention
    on the key barrier to entry: Massive consolidation and
    concentration of power in just a handful of companies.
        Consolidation in the meat processing industry is an issue
    that has plagued our country for over a hundred years. In the
    late 1890's, our meat marketplaces dominated by just a handful
    of stockyards and packers. This dominance led to the passage of
    the Sherman Anti-Trust Act in 1890. Years following, Congress
    doubled down on its commitment to protect the market from
    dominant forms of abuse by passing the Clayton Antitrust Act,
    the Federal Trade Commission Act, and the Packers and
    Stockyards Act.
        Meanwhile, the publication of Upton Sinclair's ``The
    Jungle'' in 1906, brought public attention to the deplorable
    conditions that workers in the meat processing industry were
    facing and the poor sanitary standards employed by the five
    dominant meat processing firms. Rising to meet these concerns,
    Congress passed the Nation's foundational consumer protection
    laws in this area, the Pure Food and Drug Act and the Federal
    Meat Inspection Act.
        We face similar concerns today about market concentration
    in the meat processing industry as our predecessors faced at
    the turn of the last century. Then there were five firms that
    dominated the market. Now, we have only four. Although on
    balance, our food is safer and standards for workers are
    higher, meat processing is less competitive and more
    concentrated than it was in the 1900's, leading to a range of
    harms for small business, consumers, and workers.
        Today, 85 percent of all beef processing, 70 percent of all
    pork processing, and 54 percent of all chicken processing is
    controlled by four companies: Tyson, JBS, Marfrig, and
    Seaboard. By relying on these big four companies for our meat
    production, we have allowed our food system to become highly
    fragile and beset with bottlenecks. As the COVID-19 pandemic
    showed us, our current food system can easily be disrupted.
        This rise in dominance has resulted in lower operating
    costs for the large meat plants, but these lower costs have not
    been passed on to consumers, have not resulted in higher wages
    for workers, and have not led to increased profits for farmers.
    Rather, these large companies exploit their dominant position
    as middlemen to extract high profits and pad their own bottom
    lines.
        In the face of these concerns, we must consider ways to
    roll back the mergers that created this consolidation, explore
    methods of supporting smaller meat processors, and increase
    oversight where possible to rein in abusive and deceptive
    practices.
        What we should not do is consider rolling back meat
    inspection requirements that keep our food safe. Doing so would
    not help create more competition in the market, but instead
    would result in the commercial sale of meat that does not meet
    minimum Federal safety standards.
        Currently, meat sold commercially in the U.S. must either
    be processed at a Federally inspected facility or at a State-
    inspected facility that enters into a cooperative agreement
    with the U.S. Department of Agriculture's Food and Safety
    Inspection Service.
        Twenty-seven States allow processors to operate under
    cooperative agreement. Under this arrangement, facilities must
    enforce requirements, quote, ``at least equal,'' to those
    imposed by the Federal government under Federal law. Unless
    these States opt into an additional program with USDA, they can
    only sell their meat within the State.
        Whether the meat is processed in a Federally inspected
    facility or one of the State-run facilities under a cooperative
    agreement with the USDA, inspectors continuously conduct
    oversight of the facility to ensure the safety and quality of
    meat and the health and wellness of livestock. These
    inspections not only ensure that our meat is safe for
    consumption, but also that any health issues that do arise with
    the processed meat can be traced back to the facility that
    produced it.
        By contrast, facilities that are not operated under either
    program, also known as custom slaughterhouses or processing
    plants, are only inspected periodically. For this reason, they
    are only eligible for personal, household, guest, and employee
    use. Proposals to weaken the system by allowing custom
    slaughterhouses to serve commercial customers would inject far
    too much risk into our food safety system without addressing
    the root problem that is holding back competition in the meat
    processing industry.
        Instead, we must find solutions that will support the entry
    of smaller meat processors into the market and ways of leveling
    the meat processing market generally to encourage more
    competition and more choices for suppliers, buyers, and
    processors, while maintaining strict safety standards.
        I look forward to hearing from our witnesses, and I yield
    back the balance of my time.
        Mr. Massie. I thank the Ranking Member of the Full
    Committee.
        I now recognize the Chair of the Full Committee, Mr.
    Jordan, for a comment.
        Chair Jordan. I thank the Chair.
        I'll be brief. I just wanted to thank you, Chair, and the
    staff for putting this important hearing today. I look forward
    to hearing from our panel.
        Thank you.
        Mr. Massie. Without objection, all other opening statements
    will be included in the record.
        We will now introduce today's witnesses.
        Mr. Joel Salatin and his family own Polyface Farm in
    Virginia's Shenandoah Valley. He also co-owns Honest Meats,
    LLC, a small Federally inspected meat producer in Harrisonburg,
    Virginia. His farm produces beef, pork, poultry, and other
    products, selling to roughly 10,000 families through an online
    farm store, nationwide direct shipping--I'm sorry--on-farm
    store, nationwide direct shipping, and urban drop points. It
    also services boutique retail markets and some institutional
    food services.
        Ms. Rosanna Bauman is a co-owner and General Manager of
    Bauman's Cedar Valley Farm in Anderson County, Kansas. Bauman
    and her family operate a farm growing non-GMO crops and raising
    cattle, sheep, and poultry, as well as a poultry processing
    facility, a butcher store, a farm feed business, a custom
    agricultural services business, and a pet food business. In
    addition to on-farm sales and their butcher store, Bauman's
    Farm sells their meat and poultry at farmers markets.
        Mr. Joe Trotter is Director of the Energy, Environment, and
    Agriculture Task Force at the American Legislative Exchange
    Council. Prior to joining ALEC, he was a Congressional staffer
    and worked for free-market organizations and campaigns. He is
    an avid outdoorsman and a conservationist, and spent two years
    on the Board of Governors at the Bethesda-Chevy Chase Isaac
    Walton League, a local nonprofit organization that maintains a
    624-acre conservation farm.
        Mr. Greg Gunthorp and his family own and operate a pasture-
    based livestock operation in Northeast Indiana. Their operation
    includes an on-farm USDA-inspected slaughter and processing
    plant. His farm provides pork, poultry, and lamb to restaurants
    in Chicago, Indianapolis, and the surrounding region. He is a
    past Board Member of the American Pasture Poultry Producers
    Association.
        We welcome our witnesses and thank them for appearing
    today. I also want to thank the folks in the crowd who came
    here to witness the witnesses.
        We're going to begin by swearing you in, just the
    witnesses, not the observers.
        Would you please rise and raise your right hand?
        Do you swear or affirm under penalty of perjury that the
    testimony you're about to give is true and correct to the best
    of your knowledge, information, and belief, so help you God?
        Let the record reflect that the witnesses have answered in
    the affirmative.
        Thank you, and please be seated.
        Please know that your written testimony will be entered
    into the record in its entirety. Accordingly, we ask that you
    summarize your testimony in five minutes.
        Mr. Salatin, you may begin.
        Mr. Salatin. Thank you.
        Mr. Massie. Make sure your microphone is on. Press the
    button.
        Mr. Salatin. Is it on?
        Mr. Massie. Yes. Now, Mr. Salatin, you may begin.

                       STATEMENT OF JOEL SALATIN

        Mr. Salatin. Good. Thank you.
        Right now, nationwide, a farmer wanting to get a slaughter
    slot in a small Federal-inspected meat processing plant often
    must book six months to a year in advance for pork. That's
    before the piggy is even born. It's never been like this. What
    happened?
        In short, regulatory extortion tyranny. Inspection
    regulations are size prejudicial. I know one facility that was
    ordered closed because it wasn't processing fast enough. The
    Food Safety Inspection Service measures its efficiency by
    pounds inspected per personnel hour, creating an adversarial
    discriminatory attitude toward small plants.
        In 1906, when Upton Sinclair wrote ``The Jungle,'' seven
    large companies controlled half the Nation's meat processing
    capacity. After a century of government intervention, four now
    control almost 85 percent. When licenses and compliance make
    entering and maintaining an abattoir more burdensome to small
    facilities than large, concentration and centralization is not
    an antitrust issue. It's discriminatory regulatory issue.
        It's a perfect example of mission creep. What started
    sincerely as a food safety objective morphed into regulatory
    overburdensome harassment. A small plant operator dare not
    object to subjective and political inspector decisions because
    ``poke and sniff'' allows retribution toward folks with
    questions. Entrepreneurs are en-
    slaved and held hostage by bureaucrats who share no business
    risk and rule without restraint.
        Meanwhile, more Americans desire a more localized, stable,
    secure, transparent, nutrient-dense, relational, trustworthy
    food supply than centralized industrial facilities offer. We
    have eager and willing buyers, farmers desperate to direct
    market to their neighbors, but a bureaucracy that stands in the
    way of voluntary consenting adults exercising freedom of choice
    for their bodies' microbiome fuel. Few human decisions speak to
    freedom like what we have the right to swallow.
        I can butcher a beef in the field, process it, and give it
    away. If I sell an ounce, I'm a criminal. What is it about
    exchanging money that suddenly makes meat unsafe? Clearly,
    current market regulations are not about safety; they are about
    market access.
        Our society recognizes scale and relationship when
    assessing risk. In Virginia, we can keep three daycare children
    in our private home without a license and governmental
    oversight. Why? Because an entity and arrangement that small
    inherently offers seller-buyer intimacy that vets itself equal
    to licenses and inspectors. In Virginia, we can keep three
    elder care patients in our private home without licenses and
    government oversight. Why? Because such an intimate arrangement
    protects equal to the government.
        Expectations and trust provide context in any transaction.
    People who want to disentangle from the agri-industrial
    government crony complex don't expect their provenance to be
    squeezed through the regulatory process. They trust their
    farmer more than a government agent. While this group, both
    farmer and customer, may represent a lunatic fringe of the
    society, we all know that's where innovation comes from. How
    society deals with its unorthodox element defines its march
    toward tyranny or freedom.
        Our society, desperate for food security and stability,
    wallows in a morass of regulatory impediments to what we need
    and desire. Well, what remedies exist?
        Right now, 1968's Public Law 90-492, known as the producer-
    grower exemption, allows 20,000 head of poultry to be processed
    on-farm without inspection. This has enabled thousands of
    community-scaled neighbor-to-neighbor entrepreneurs to launch
    small broiler operations. To my knowledge, not a single
    customer has been harmed by this exemption. Why not extend it
    to beef or to pork?
        Right now, custom processing designation allows me to sell
    preslaughter portions of an animal, usually in wholes, halves,
    and quarters. Well, why limit my customers to large volumes?
    Let them buy by the cut. Congressman Thomas Massie's PRIME Act
    would enable this.
        Another remedy could simply be a food emancipation
    proclamation, allowing farmers currently enslaved by regulatory
    shackles to sell meat to neighbors. Right now, farmers can give
    it away, they just can't sell it. Neighbors can buy and feed it
    to their children. Clearly, if uninspected meat is hazardous,
    the commerce prohibition should be on the buyer as well as the
    seller, but it's not, which clearly illustrates the
    prohibition's hypocrisy.
        Surely, if we really want freedom of food choice and food
    security, we can create a remedy that refuses to criminalize
    neighborly meat transactions. The only reason food freedom was
    not written into our Bill of Rights was because our Nation's
    Founders could not have imagined a time when neighbors could
    not exchange a chuck roast or sausage. At some point, requiring
    professional league infrastructure and referees on a sandlot
    pickup ball game is both inappropriate and malicious.
        It's time to remove the heavy hand of tyranny from
    America's food system by allowing market access, opportunity,
    and competition for producers and consumers seeking freedom of
    food choice.
        Thank you.
        [The prepared statement of Mr. Salatin follows:]
        [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]

        Mr. Massie. Thank you, Mr. Salatin.
        Ms. Bauman, you may begin your testimony.

                      STATEMENT OF ROSANNA BAUMAN

        Ms. Bauman. OK. Is this going now? Anyway.
        All right. Thank you for inviting me here. It's rare that I
    get to talk about butchery, because usually that's like a
    conversation killer, especially if you're on airplanes.
        So, a year ago I probably wouldn't have been a good
    candidate. I do poultry processing. I agreed to speak here
    because I figured it would be good therapy for me, actually. I
    had an incident last summer, after 15 years of operating USDA-
    inspected poultry and beef plants that really helped bring to
    light some of the flaws in the inspection system, I guess, and
    it took me 90 days to get my voice heard. My business lost a
    significant amount of money in the meantime.
        In short--it's a very long story--but in short, we had a
    small mechanical failure that led--that opened the door to a
    overly aggressive FSIS supervisor who come in and placed all of
    my 3,000 chickens on hold, wouldn't review basically any of my
    corrective actions. It's a situation that if it happened in a
    large plant, it could be
    resolved in a matter of hours. It took me 90 days to resolve
    this. My business lost $80,000. All 3,000 of those birds were
    condemned. My process was not complete without a personal farm
    visit from the head of the Food Safety Inspection Service, the
    administra-
    tor there. In the end, all those 3,000 birds got the wholesome
    stamp of inspection from the USDA, and they all went back to
    their farmers.
        A lot of layers in there, but the concern and the takeaway
    that I got from that experience was I was a 15-year-old plan.
    They're all over--we have the USDA. It's one of their
    priorities. We've all seen it. We do have a nice increase of
    new plants. We do have a lot of attractive grants that are
    being dangled for folks to move toward USDA inspection. If I
    was a baby businesswoman and had the same experience, I would
    have folded. In fact, last summer, that was a very stressful
    time for us in the business, and I had to take a step back and
    ask myself, why in the world am I doing this, why am I a
    butcher at all?
        It was like a Queen Esther moment for me, because I didn't
    need the inspection services for my own farm stability, for my
    own markets, for any of my own thing, but my community did. I
    processed for a lot of other farmers. I had survivor's guilt. I
    could reduce my stress, but they needed that inspection service
    to access their markets. If that would have occurred to me
    younger in my inspection journey, I would have been yet another
    plant closure.
        During this process--I've talked to a lot of other plants
    around the Nation that's ran into similar problems, not knowing
    how to navigate the entire inspection system. I found out the
    hard way that the Food Safety Inspection Service is set up
    completely contrary to the American judicial system in to where
    we are presumed guilty first, even worse. So, my product was
    consumed--or presumed contaminated with no evidence of
    contamination. Even worse, my judge and jury was also the same
    as my accusers. So, nothing that I did or said would have to be
    considered.
        The USDA FSIS does not have an ombudsman, unlike a lot of
    Federal agencies. I don't believe that an ombudsman would be
    very helpful. We need like a mediation board.
        The other thing that the USDA has an overreach of purpose
    with the Food Safety Inspection Service. They are to inspect
    food safety, not public health, and they're there to inspect
    food as it moves about within commerce that's not the direct-
    to-consumer markets at all. That really helps clarify the
    purpose in a lot of where we bump into our--against things that
    feel like overburdensome regulations are sometimes just simply
    an entire misapplication of them trying to apply them where
    they don't belong at all.
        Barriers to entry beyond just regulations also include
    labor and waste management. That's inclusive of access to labor
    and with the waste management from--that's how Tyson makes
    their money. That's how the small plants used to make their
    money. Those value streams have disappeared. Labor access, the
    same way. If we're going to open up, say, operating, those
    things need to happen.
        Do appreciate you guys coming--or inviting me here. Come on
    out anytime to our butcher shops; we'll put you to work.
        [The prepared statement of Ms. Bauman follows:]
        [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]

        Mr. Massie. Thank you, Ms. Bauman.
        Mr. Trotter, you may begin your opening statement.

                        STATEMENT OF JOE TROTTER

        Mr. Trotter. Good morning and thank you for the invitation
    to testify before the Committee.
        I'm Joe Trotter, Director of ALEC's Energy, Environment,
    and Agriculture Task Force, and I look forward to bringing our
    nonpartisan analysis to this.
        ALEC is America's largest nonpartisan, voluntary membership
    organization of State legislators dedicated to the principles
    of limited government, free markets, and federalism. Our
    members represent more than 60 million Americans and provide
    jobs for 30 million people across the country.
        The issue at hand cuts to the very core of ALEC's
    principles of encouraging free, competitive markets, and
    balancing State and Federal authority.
        A little over 50 years ago, Congress passed the Wholesome
    Meat Act, prohibiting States from setting their own inspection
    rules on slaughterhouses and meat processing facilities.
    Congress also prohibited the intrastate sale of meat from
    cattle, sheep, swine, and goats, unless it was processed at a
    facility with an onsite inspector subject to Federal
    regulations.
        Today, farmers--local farmers that are looking to serve
    their communities by supplying grocery stores or farm-to-table
    restaurants face essentially the same statutory and regulatory
    burdens applied to multinational, vertically integrated
    corporate conglomerates. It often means that local farmers
    engaging in traditional commerce truck their cows and pigs to
    the same slaughterhouses and processing facilities as major
    animal agriculture producers, which could be hundreds of miles
    away.
        Thousands of meat processing facilities shuttered their
    operations over the last four decades, leaving farmers and
    ranchers with significantly less options for slaughtering and
    processing their meat. As it currently stands, less than a
    hundred slaughterhouses are responsible for over 95 percent of
    the country's meat production.
        As a result of the laws and regulations governing who can
    process meat for commercial consumption, there are high
    barriers to entry for small businesses looking to increase
    their market capacity.
        Facilities staffed by FSIS and State inspectors usually
    operate at full capacity, meaning farmers and ranchers have
    fewer choices on where to have their animals slaughtered and
    processed. While the supply of processing facilities
    contracted, the demand for meat products throughout the country
    surged, creating an even higher demand for the processing
    facilities. Farmers are increasingly forced to book
    appointments months in advance and often have to travel over
    State lines.
        Centralization also leaves the meat supply chain, and by
    extension the country's food security, vulnerable to massive
    disruption. When a large plant shutters its operations, the
    capacity within the market to pick up the slack largely does
    not exist, causing meat prices to skyrocket. Unfortunately, we
    saw this play out to a degree during the COVID-19 pandemic and
    in other instances when plants were forced to halt their
    operations due to, say, fire or flood.
        Similarly, when things go wrong with these large-
    centralized processing facilities, the impacts on the immediate
    supply chain are enormous. With 85 percent of grain-fed cattle
    processed by the four largest producers, if one plant has an
    outbreak of a foodborne pathogen that forces a recall, there's
    a massive, immediate economic impact on food pricing and
    availability. When these recalls happen from the largest
    processing facilities, millions of pounds of meat are pulled
    off the shelves and ultimately destroyed.
        Now, there are other options to decentralize the
    production, but they can't currently bring their products to
    market because of Federal law and regulation. Custom
    slaughterhouses exist all throughout the United States, but by
    statute, they are only allowed to slaughter meat for personal
    consumption. With over a thousand of these facilities all
    across the country, they are well positioned to provide the
    option of locally sourced meat to their communities.
        Now, custom slaughterhouses are required to follow all USDA
    as well as State law and regulation, but they don't have onsite
    inspectors. Instead of having a persistent inspector presence,
    they are examined by Federal, State, and local authorities
    throughout the year.
        With legislative updates to the Federal Meat Inspection
    Act, States could, if they wish, they're not required to allow
    custom slaughterhouses and processing businesses to sell meat
    commercially. This would empower small businesses, including
    ranchers, farmers, processors, restaurants, and local grocers,
    while also ensuring food security on a State and local level.
        Farmers and ranchers who just want to serve the local
    restaurants and grocers should not be forced to compete for the
    same space in slaughterhouses with the multinational
    corporations. They are ready and willing to be inspected up to
    standards. This is a perfect example of well-meaning Federal
    regulation run amuck.
        There is an opportunity to empower small businesses,
    decrease regulation, and improve food security if Congress
    decides to act.
        Thank you for the opportunity to speak.
        [The prepared statement of Mr. Trotter follows:]
        [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]

        Mr. Massie. Thank you, Mr. Trotter.
        Mr. Gunthorp, you're recognized now for your opening
    statement.

                       STATEMENT OF GREG GUNTHORP

        Mr. Gunthorp. I'm Greg Gunthorp, an artisan farmer,
    processor, and meat distributor. I'm a member of the American
    Grass Fed Association and Farm Action.
        Thank you, Mr. Chair, for the opportunity to present today.
        I grew up on a diversified family farm in the 1970's and
    1980. After attending a land-grant university, I came home to
    farm with my family.
        In 1994, the hog market dipped, and dad said the hog
    industry was over for the independent hog farmer. My wife and I
    bought the sow herd and went off on our own. We found out in
    1998, dad was right. The market crashed. We sold live pigs for
    less than what my grandpa sold them for in the depression.
        After selling commodity pig--selling pigs in the commodity
    market for four generations, we sold our first dressed pig to a
    restaurant in Chicago that same year. Our first customer,
    Charlie Trotter, was rated No. 1 in the world for food and wine
    by Wine Spectator Magazine. We capitalized on the popular farm-
    to-table movement. Had we filled out the paperwork, we would
    have made the Inc.'s 5,000 list in 2011 as one of the fastest
    growing independent businesses in the United States, with
    product being served at O'Hare Airport, the Sears Tower,
    Wrigley Clubhouse, and Disney, just to name a few.
        Today, we are in a fight for our life. I'd love to tell you
    that rural America has thrived with niche marketing wholesale
    opportunities like I once had. I'd love to tell you that
    dealing with USDA is easy rather than the major challenge it
    is. Finding, keeping, and affording a skilled workforce in
    today's descaled industry is virtually impossible. Market
    access for small, local, regional plants in today's wholesale,
    predatory, and concentrated marketplace is no longer possible.
        Food that tastes better and is better for you, agriculture
    that rebuilds soils and community, food system resilience,
    greater biodiversity, and more opportunities for all should be
    the goal. The global food supply is in peril. For too long, get
    big or get out policies touting false efficiencies and economy
    of scale have favored today's failed top-down controlled and
    concentrated food system, wiping out the safer, more
    dependable, and resilient local/regional infrastructure
    essential for our food security.
        The issue to me is like the local little league committee.
    We aren't here to argue balls and strikes. We need a new game
    where everyone has a chance for success, including us smaller
    scrappy players who are willing to put the time and energy into
    it.
        New processing plants quickly realize that attaining a
    grant of inspection from USDA is a difficult hill to climb.
    Only after we climb the USDA inspection hill do we see the
    mountain--fair market access--today's insurmountable challenge.
        Fixing USDA inspection issues is the first step in
    rebuilding local/regional food systems. I've spent several
    decades of my own time and resources doing advocacy work for
    the independent family farm and small processor. If we want
    successful local and regional food systems, we need subsidy
    reform, antitrust enforcement, truth in labeling, and
    inspection reform, and we must support the infrastructure with
    government purchasing.
        Here are my suggestions on inspection reform and antitrust
    enforcement. First and foremost, we need to create an ombudsman
    to deal with USDA dysfunction concerning existing and
    perspective small and very small establishments. Small plants
    have more issues with the process than they do with the
    regulations. It's 1st, 4th, and 14th Amendment issues, i.e.,
    the ability to challenge and criticize without retribution; the
    differences in opinions when plants have facility, product,
    and/or equipment retained; and the ability to have realistic
    due process during unprofessional inspection behavior and/or
    differences in opinion. There are way too many nightmare
    stories. We could go on all day talking about those.
        We need to redefine plant size so that overtime fees, grant
    funds, procurement funds, and implementation of regulations are
    actually appropriate. You guys need to look at the National
    Advisory Committee for Meat and Poultry Inspection--I served on
    that--and we don't actually even get to present topics for the
    Committee.
        I have some--ensure that rulemaking processes are complete
    before USDA enforces rules. Salmonella performance standards;
    excellent example.
        We need to do everything we can to expand the Talmage Aiken
    or cooperative State inspection. Most of the little plants in
    this country are actually in those, because they can deal with
    the politics and bureaucracy of State programs easier.
        Please restore truth in labeling. Every viable niche we've
    come up with has been stole by Big Ag without any meaningful
    change.
        USDA procurement program should prioritize some of its
    purchasing from local and regional suppliers.
        Fix the agency revolving door and ethics issues.
        Restore strict antitrust enforcement. Oligopolies and
    monopolies harm both producers and consumers. It's clear that
    cheap food isn't cheap.
        Today, the essentially unregulated big food cartel
    continues to extract the wealth and resources of rural America,
    while local independent businesses, claimed to be the backbone
    of America, fail under abusive regulatory pressure and lack of
    market access. The people who best steward our land and
    livestock and who grow and process our Nation's agricultural
    production are being left to die under the boot of monopoly
    power, unprotected and unrepresented at all levels of
    government. It's time for a change.
        Thank you.
        [The prepared statement of Mr. Gunthorp follows:]
        [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]

        Mr. Massie. Thank you, Mr. Gunthorp.
        Thank you to all the witnesses who speak from experience.
        I'm now going to recognize the Ranking Member, Mr. Hank
    Johnson from Georgia, for his opening statement.
        Mr. Johnson of Georgia. Thank you, Mr. Chair, and thank you
    for holding this hearing on barriers to entry and competition
    in meat processing.
        In my State of Georgia, we have nearly 50 poultry
    processors alone, with at least two in my district. Although
    concentration in meat processing is an issue industrywide, no
    other sector is more vertically integrated than the poultry
    industry. Fifty-four percent of all chicken processing is
    controlled by just four giant corporations: Tyson, JBS,
    Marfrig, and Seaboard. While these poultry processors account
    for more than half of the market, this was not always the case.
    In 1986, for instance, these companies only controlled 35
    percent of the market.
        Chicken integrators who perform a similar function as meat
    packers, such as Tyson Foods or Pilgrim's Pride, control every
    step of the poultry production, from breeding to slaughtering.
    Chicken growers across the country and in my State are contract
    farmers. They sign contracts to grow chicks on a roughly six-
    week basis, and they must agree to substantial capital
    commitments.
        At a hearing before the USDA and DOJ, poultry farmers
    explained how this process forced them to take on debt, had
    little security that their contracts with the big chicken
    companies would last long enough for them to pay off their
    debts, and they faced retaliation, such as losing their
    contracts if they complained.
        Dominance in this sector has resulted in measurable harms
    to our local farmers. The Small Business Administration Office
    of the Inspector General found in 2018 that the large chicken
    companies exercised, quote, ``such comprehensive control over
    growers,'' that it nullifies, quote, ``practically all of a
    grower's ability to operate their business independently.''
        More than half of all chicken growers only have one or two
    potential integrators in their area. Growers claim that even
    when they have multiple integrators nearby, they do not, as a
    matter of practice, compete for growers. The dominance of just
    four large corporations in this sector does not hurt just the
    farmers and meat suppliers, but it also affects worker wages
    and consumer prices.
        Although large meat processing plants should result in
    lower operating costs that should positively impact workers'
    wages and consumer prices, these big firms have instead used
    their control over the market to extract more profit from the
    system, while paying workers less and charging consumers more.
    Charging consumers for meat is not a small issue. Meat prices
    are the single largest contributor to the rising cost of
    groceries.
        Finally, as the COVID-19 pandemic demonstrated, our
    reliance on these four meat processors has created a fragile
    food supply system that contains numerous bottlenecks that are
    highly sensitive to shocks in the market. For all these reasons
    we should closely examine what we can do as Members of the
    Judiciary Committee to increase competition in the meat
    processing market, protect workers, and ensure that smaller
    meat plants are getting the support they need to compete and
    thrive.
        Although Federal standards for meat processing facilities
    can pose a high burden to smaller processors, we should explore
    ways of supporting them and breaking up the big four meat
    processing companies, not rolling back inspection regulations
    that have roots in the late 1800's and support a safe and
    sanitary food system. Maybe we should add more Federal workers
    to get the job efficiently and effectively and, hopefully,
    those workers can have a heart and treat the people that they
    work with humanely and with some compassion.
        I thank the witnesses for coming here today. I want to
    especially thank Ms. Bauman, our Queen Esther exemplar. Thank
    you all for sharing your perspectives.
        I yield back the balance of my time.
        Mr. Massie. I thank the Ranking Member.
        We'll now begin the questions, and we'll proceed under the
    five-minute rule.
        I'm going to yield to the Chair of the Full Committee, Mr.
    Jordan.
        Chair Jordan. I thank the Chair.
        Mr. Salatin said it best when he said: ``They trust their
    farmer more than a government agent.'' Amen to that. Someone
    once said, when someone from the government shows up at your
    front door, your first response is not usually, oh, joy, one of
    my public servants is here to help me today. That is the
    fundamental issue.
        I appreciate what the Chair's doing and everyone's
    testimony. It's amazing, we got four witnesses. I don't know
    which one came from the Democrats, but they all understand we
    have to change this system. So, God bless you all for what you
    do.
        I'm going to yield to the good man who knows a little bit
    about agriculture, from Wisconsin, Mr. Tiffany.
        Mr. Tiffany. Thank you, Mr. Chair.
        I believe you used the phrase, Mr. Salatin, ``rule without
    restraint.'' I wrote a letter on August 27, 2021, to the Food
    Safety Inspection Service, it actually went to Secretary
    Vilsack, in regard to forced mask mandates that were put on
    processing facilities. As I quoted in here, ``they do not have
    the authority to abate hazardous conditions directly.'' That
    was what FSIS said, ``they do not have the authority.''
        Do you see these things regularly from the Food Safety
    Inspection Service?
        Mr. Salatin. Yes. Yes. There is, as I mentioned, the word
    ``extortion.'' The problem is that if you dare question a
    judgment because of the subjective nature of inspection, it's
    not empirical at all. They can retribute pretty easily. So,
    every owner of a plant, like us, has been down this road
    where--well, I can tell you the example. For us it happened in
    the last five years. We've had two new inspectors at our plant.
    Because we're a small plant, it's a training ground for new
    ones. So, because we sell grass-finished beef, not grain
    finished, many times our liver has just a bit of a green patina
    around the edge because it's not feedlot.
        So, two years in the last five, we've had new inspectors
    that condemned all our livers. That's $30,000 a year, times two
    is $60,000 a year. We take them 50 miles up to another plant
    with another inspector, all our livers come back. Same animals,
    same farm, same day, and same rules. One, we lose several
    thousand. One, we gain several thousand.
        If you dare question or say anything, then, well, we can
    find a fly here, we can find a post wrong here, this room has
    to be blue instead of pink. So, you just are under this
    extortion all the time.
        Mr. Tiffany. It kind of brings back a funny story, Mr.
    Chair. When I was a kid on a dairy farm, all the dairy farmers
    in the area used to always say, you got to make sure you got
    one thing wrong for the inspector to see because you can't get
    a perfect score.
        Mr. Gunthorp, I believe you used the phrase ``presumed
    guilty.'' I think you used that in your testimony. To this same
    point, is this something that you found also.
        Mr. Gunthorp. As I mentioned in my testimony, I think that
    we see this on a regular basis. I would argue that--and I've
    actually read the regulations, I probably can cite to any of
    them imaginable--but I think the problem is the interpretation,
    and it is the dysfunction that we see with the inspection. As I
    mentioned, I think it's our First Amendment rights, because I
    think it's our ability to challenge and criticize the
    inspectors, and we can't do that because of, as Mr. Salatin
    said, ``retaliation.'' I think it's the--we can't question or
    even have them have proper probable cause or suspicion when
    they either withhold our ability to use our facility, our
    equipment, or hold our product.
        Then we don't have legitimate due process in this. If I
    actually wanted to fight over an issue with the USDA, I'd have
    to go completely through the appeal process. So, starting at
    the inspector that wrote us up for noncompliance, I'd have to
    go through the whole way through the chain of command before I
    could get an administrative court hearing. So, I'd have two
    years that we wouldn't be open without even being able to get
    due process. That's not due process.
        Mr. Tiffany. Thank you very much for that. I just got a
    brief time.
        Mr. Gunthorp, you sound like you could be interchangeable
    with our ALEC representative here. I really appreciate the
    Democrats bringing you forward.
        To the Ranking Member, you hope to have a heart, you hope
    these regulators have a heart, but sometimes that is not how it
    works, and you force some of these plants to close. We've seen
    it in our district where we have a plant closing. They were
    subject to those mask mandates. It really did great harm to
    their business. I know it caused them to reconsider whether
    they should do an expansion.
        I would just close with this, Mr. Chair. I am so--we are so
    fortunate in Wisconsin. We have, I believe, almost 500 of these
    small processors. Many States do not have the diversity of
    processors. I get a quarter to a half every year, my wife and I
    do, from one of those small plants. We are so fortunate. I hope
    this can happen in the rest of the country.
        I yield back to the Chair--or yield back to you, Mr. Chair.
        Mr. Massie. Thank you, Mr. Tiffany.
        I'm going to yield to the Ranking Member of the Full
    Committee at this moment for questions, Mr. Nadler.
        Mr. Nadler. Thank you, Mr. Chair.
        Mr. Gunthorp, the meat processing market is highly
    concentrated with only four firms controlling most of the
    processing in this country. Why was it important to your family
    business to start your own plant to become involved in the meat
    processing plant?
        Mr. Gunthorp. Thank you for the question. We had no choice
    but to start a processing plant. My family raised pigs and sold
    live pigs on the commodity market for four generations. The
    commodity market is virtually done for the independent hog
    farmer, especially somebody like us that raises heritage breeds
    of pigs on pasture seasonally. The commodity market's not going
    to buy those hogs at any price that we could be profitable. We
    have no choice but to establish our own markets.
        Mr. Nadler. How hard has it been for your meat processing
    plant to stay in business and compete against large-scale
    processing facilities owned by one of the big four meat
    processors?
        Mr. Gunthorp. It's been an amazing journey. Unlike Mr.
    Salatin, we wholesale virtually all our stuff. We're not direct
    to consumers. So, we sell mostly to restaurants, upscale
    retailers. Up until about 2015, it was an amazing journey. We
    could sell product virtually anywhere. I think that the whole
    farm-to-table movement woke the big guys up, and the big guy's
    now with misleading labels. It's part of a requirement for
    antitrust enforcement is that you have a fair and competitive
    market.
        The big guys co-oped every single thing that we produce
    nowadays, whether that's natural, whether that's grass fed,
    whether that's product of USA, and whether that's the organic
    label. Those same big companies dominate all these markets, and
    they dominate them without the production of--
        Mr. Nadler. More since 2015?
        Mr. Gunthorp. What.
        Mr. Nadler. You implied more since 2015.
        Mr. Gunthorp. Oh, it's been--I mean, it started about 2015.
    We corresponded to it by expanding our region. We sell outside
    of our local region so, as far west as Oregon, as far south as
    Florida, into Pennsylvania, and New York. Expanding regionally
    works for so long. Eventually, when it becomes--I should send
    you a link to the Joe Rogan show. A good friend of mine, Will
    Harris, explaining his whole situation with Whole Foods. It's
    all the niche farmers that are wholesaling.
        Mr. Nadler. Thank you.
        Mr. Gunthorp, how do USDA inspections help protect the
    quality and safety of the meat produced to ensure the health
    and well-being of the livestock?
        Mr. Gunthorp. I think there should be some improvements in
    the USDA inspection system, but I'm actually a fan of USDA
    inspection. I think for the overwhelming majority of meat and
    poultry sold in the United States we need a basic standard for
    safety and wholesomeness.
        USDA is supposed to be there to be another set of eyes to
    ensure that we're doing what we're supposed to do. I would say
    about 80 percent of the inspectors fall in that category. You
    actually got a problem with 10 percent. I like to call them the
    lazies and the crazies. You got 10 percent that don't do their
    job, and they're a problem for both of us as a plant and
    consumers. Then you got 10 percent that there's not a person on
    the planet that can make them happy. USDA has nothing,
    whatsoever, to do to be able to deal with those inspectors.
    Little plants can't deal with them at all. So, you guys really
    need to fix both ends of it.
        Mr. Nadler. Now, Chair Massie's PRIME Act would propose to
    carve out meat sold commercially within the State from the
    Federal baseline inspection requirements. Do you expect
    consumers in your State to have an appetite for this
    uninspected meat?
        Mr. Gunthorp. I would say I'm not opposed to the PRIME Act.
    I think that if you put the restrictions poundswise the same
    week--we have the equivalent right now in poultry inspection,
    and it's 1,000 birds per year and 20,000 birds per year. We
    don't have problems with that. Indiana is actually one of the
    exemplary States. I would tell Mr. Johnson that Georgia is
    actually right now eliminating their--
        Mr. Nadler. Thank you. I have two more questions, which
    I'll ask as one. Are there tracing mechanisms in use at the
    State level that are like the tracing that a USDA inspection
    supplies? If meat is sold without a USDA inspection mark and
    thus unable to be traced, how might consumers who later fall
    ill thanks to contaminated meat find out if the meat came from
    a specific meat processing location?
        Mr. Gunthorp. I think that it's that accountability of
    actually there--the person buys from the actual producer and
    processor. So, I think that's the tracing there. That's why I
    say we need USDA inspection when it's a no-name transaction and
    it's in the grocery store and you don't know who the producer
    or the processor is. That's why USDA creates that basic level
    there. When it's an interaction between two people, the
    traceability is you know the person you got the meat from.
        Mr. Nadler. Thank you. My time has expired. I yield back.
        Mr. Massie. I thank you, Mr. Nadler.
        I yield five minutes to Mr. Cline for his questioning.
        Mr. Cline. Thank you, Mr. Chair. I want to thank you for
    holding this important hearing on this critical topic. I
    support your legislation. I've been a co-sponsor for many
    years. It's important to my district.
        I want to welcome my constituent, Mr. Salatin, here today.
    The Sixth District of Virginia is the No. 1 agriculture
    district in the Commonwealth. So, I see that he has been
    writing nonstop since he gave his testimony, and everybody else
    has been asking questions. So, I'm going to give you a minute
    just to kind of respond to what was said before I launch into
    my questions.
        One thing Mr. Tiffany mentioned was the proliferation of
    small processors in Wisconsin. I asked him why and what was the
    kind of reason for that magic that happens in Wisconsin as
    opposed to what might happen in Virginia.
        Mr. Salatin, thank you for being here.
        Mr. Salatin. Well, Wisconsin has a really small farm. It's
    the cheese capital. It has a really small farm feel about it.
    To my knowledge, Perdue is not there, Tyson's not there. So, in
    Virginia, we have Smithfield. So, it just has a small farm
    feel.
        Also, that as you head into Wisconsin, you get a kind of--
    it's not in the center, it's out there. A lot of homesteaders
    are moving to Wisconsin. So, it's got that smallholder feel.
        Mr. Cline. Well, in Virginia, we have a State-level program
    that allows meat to be inspected and sold for intrastate
    commerce. However, we're one of only 27 States that have this
    kind of program in place.
        How would the PRIME Act improve on our system in Virginia,
    if at all?
        Mr. Salatin. Well, the PRIME Act would allow by-the-cut
    sales. I know Mr. Nadler has kept harping on safety, safety,
    safety, but we've got to realize that safety is actually quite
    subjective. I think a lot of people do things that are unsafe.
    Like drinking three Cokes a day is pretty unsafe. Maybe, I'll
    not go too far here, but there are a lot things that people do
    that are maybe bungee jumping, whatever, OK. So, 50 kids
    drowned in backyard swimming pools last year. That's more than
    have ever been hurt by any kind of meat problem. We're not
    filling in swimming pools.
        What I'm saying is you choose your risk. It's a personal
    choice of how you choose your risk.
        So, the beauty of the PRIME Act creates a parallel
    competition based on voluntary consensual choice among adults
    to opt out of a system. Just like homeschooling has now created
    a competition and opt-out chance and charter schools for people
    that are upset with the public school and don't trust the
    public school system. Or Uber created an opt-out option for the
    chauffeuring business. Or Airbnb created an opt-out position
    for the hospitality industry. We need an opt-out--the only way
    to really break up these big outfits is to create a universe
    that allows a competitive free-market option.
        So, the PRIME Act allows a competitive free-market option
    that will create accountability within the system.
        Mr. Cline. You have a long history of helping small farmers
    and processors get started in the industry and navigate Federal
    laws, USDA regulatory requirements, and food safety inspector
    relationships. Starting at the beginning, what are the biggest
    problems faced by processors and just getting a grant of
    inspection that enables the facility to even operate?
        Mr. Salatin. The biggest problems for getting around the
    inspection?
        Mr. Cline. No, getting a grant of inspection.
        Mr. Salatin. Oh, getting a grant of inspection. Oh. Well,
    it's basically a $2 million process. You've got a million
    dollars to build a facility and a million dollars to get the
    paperwork done.
        Mr. Cline. Once a facility is operating, what difficulties
    do processors face in complying with all the Federal laws and
    regulations?
        Mr. Salatin. Well, I think you heard a lot of it right
    here.
        Mr. Cline. We've heard a lot.
        Mr. Salatin. When we were talking here before the meeting,
    Greg--Mr. Gunthorp--I'm sorry, be formal here--mentioned that
    if we started down the path of each of us telling stories, we
    could be here well into the night. The problem is that these
    stories don't have easy resolutions because of the nonappellate
    situation within the industry.
        So, that's why trying to say, be nice, agency. FSIS, could
    you be nicer? Could you be kinder? That doesn't work. The
    reform needs to come from an option that allows people to take
    control of their own microbiome.
        Mr. Cline. Thank you for being part of a discussion that's
    long overdue.
        I yield back.
        Mr. Massie. I thank the gentleman from Virginia.
        I recognize Ms. Jayapal now for her questions.
        Ms. Jayapal. Thank you, Mr. Chair.
        After decades of corporate consolidations, small and
    independent farmers are limited to fewer larger meat processing
    facilities to prepare their product for consumption. Over 20
    years ago, the market share of the two largest meatpacking
    firms was 21 percent. Today, there are just four companies--
    these are the four companies--that occupy over 50 percent of
    the market, even though there are almost 6,000 meat processing
    businesses in the United States. These conditions, as we're
    hearing, have led to a scarcity of options for many independent
    farmers, many of whom must now travel great distances to
    process their meat.
        I really appreciated, Mr. Gunthorp, your description of the
    boot of monopoly power. I think that is an apt description for
    how small independent farmers are being crushed.
        Before we get to that, I just wanted to pick up on
    something that Mr. Salatin was just saying. Do you think that
    the essential components of food safety are subjective?
        Mr. Gunthorp. For me?
        Ms. Jayapal. Yes.
        Mr. Gunthorp. Yes, I think it is. As I mentioned earlier,
    80 percent of the inspectors, by my estimation, do a great job.
    They're there to ensure we have a safe and wholesome food
    supply. Ten percent of them probably don't do their job, and 10
    percent--
        Ms. Jayapal. That 80 percent are judging on standards that
    it sounds like you think are appropriate, their core essential
    functions of food safety?
        Mr. Gunthorp. Yes. Employee hygiene, preoperational,
    operational sanitation, ensuring that you're meeting critical
    control points. Those things are essential whether we'd have
    USDA there or not.
        Ms. Jayapal. Thank you. So, they're essential. I just
    wanted to make it clear that it's not like we're looking at
    food safety and saying this is a whole set of things that we
    can just judge whether or not they're safe. There are certain
    clear standards, and that is what the regulators are trying to
    regulate.
        I understand your point. You've been nuanced in saying that
    they're not necessarily all doing a great job. I understand the
    things we need to do better, but that you're in favor of having
    some regulations, and that the majority, 80 percent of them, do
    a good job.
        Mr. Gunthorp. Oh, yes. Those four large corporations, and
    even down to a much smaller scale, it'd be a free-for-all if we
    didn't have inspection. I still think person to person is a
    different--
        Ms. Jayapal. Of course, understood.
        The U.S. Department of Agriculture reported in 2002 that
    four-firm concentration in hog slaughter increased from 30
    percent in 1989 to 57 percent in 1999.
        In 2004, Mr. Gunthorp, you began operating your own USDA-
    inspected processing plant due to limited processing
    availability. Can you talk about why you think there was
    limited processing availability at that time?
        Mr. Gunthorp. That's a story that would probably take a
    whole book. The hog industry consolidated. The big guys kept
    getting bigger and pushed out the little guys. As I mentioned
    earlier, in 1998, we sold live pigs for less than what my
    grandpa sold them for in the depression. We really had no
    choice but to quit the hog market. It was over. Went from
    600,000 hog farmers to 60,000 today. Everybody quit. We just
    chose to try a different path so that I could still raise pigs.
        Ms. Jayapal. Yes. You've been really successful at that.
    You've maintained your processing facility for almost 20 years.
        As companies have consolidated more during that time, has
    access to processing facilities improved?
        Mr. Gunthorp. In some ways it's improved, but in lots of
    ways that it hass gotten worse. I tell people processing plants
    disappeared, but we forget the kind of processing plants that
    farmers need to be able to direct market had completely gone
    away. The little processors that had a truck that did a route
    that actually made a whole bunch of different products, served
    restaurants and retailers, those didn't exist when we started
    direct marketing. We've had to rebuild this whole process.
        Ms. Jayapal. You've had to really rethink the whole thing.
        Mr. Gunthorp. Yes.
        Ms. Jayapal. Currently, just four companies, as I
    mentioned, control more than half of the market in chicken
    processing, close to 70 percent in pork, and nearly three-
    quarters in beef. How does that consolidated power--and you've
    spoken to this in different ways, but briefly, how does that
    consolidate power impact the pricing for independent farmers
    and consumers?
        Mr. Gunthorp. It drastically impacts the pricing for
    farmers and consumers. We've been told economy of scale,
    economy of sale. I have a degree in economics from Purdue
    University. It realistically has not worked for farmers or
    producers. It has not increased farmers' prices. It's
    drastically reduced farmers' prices, and it's increased
    consumers' prices. All that improvement has went to the people
    in the middle. In my opinion, the Department of Justice, the
    USDA, and the Federal Trade Commission have been on vacation
    since the 1970's on antitrust issues.
        Ms. Jayapal. I absolutely agree, and they're coming back in
    a big way, and I really support that.
        Mr. Gunthorp. I'm ready for them to go back to work.
        Ms. Jayapal. Fantastic. Well, I really appreciate it.
        Mr. Chair, I yield back.
        Mr. Massie. Thank you, Ms. Jayapal.
        I now recognize the Chair of the IP Subcommittee, Mr. Issa,
    for five minutes.
        Mr. Issa. Thank you, Mr. Chair.
        This is an incredibly important hearing, and hopefully I
    can ask a couple of questions to bring a few things out.
        Mr. Salatin, you're probably the most qualified to answer a
    fairly straightforward question. Is there a record of a
    difference between State inspection and USDA's inspection as to
    tainted meat getting into the market?
        Mr. Salatin. I don't know. I assume that there is some data
    base that records--
        Mr. Issa. Are you aware of any record that somehow the
    States didn't care enough about people's health where the
    Federal government did a better job?
        Mr. Salatin. Oh, no. The Federal government never does a
    better job.
        Mr. Issa. OK. I'll take that one for the record.
        Mr. Salatin. Probably not even a better job than a direct
    farmer to consumer where a farmer doesn't have a bureaucracy to
    hide behind.
        Mr. Issa. Similarly--I once worked in a slaughterhouse. I
    worked for Rabbi Kaizen (ph). I'm not sure how far over 1,000
    chickens he went, but let me assure you there were hundreds
    every single day as I came to work, so it was a lot. He
    slaughtered them according to religious beliefs. We stripped
    the feathers off, we soaked them in brine, and later that day I
    got to deliver them in a very old station wagon to one after
    another customers, if I was lucky, because I got tipped for
    that. I didn't get tipped for slaughtering.
        So, is there a record, similarly, of the small processor,
    including the one-of-a-kind rabbi who operates both retail and
    wholesale? Is there any history that small is somehow less able
    to do the job properly?
        Mr. Salatin. Not to my knowledge.
        Mr. Issa. So, as we see over 50 percent of processing done
    by just four processors and we see, to my recollection, that
    most of the time when I hear about it, they're the ones that
    have the shutdowns and the recalls and so on. Now, maybe that's
    because of their volume, but it doesn't seem like bigger is
    better from the standpoint of safety. Is that fair?
        Mr. Salatin. That's absolutely fair, just like--think about
    your own kitchen. If you're cooking five meals a day in your
    own kitchen, as long as you keep it clean, then if suddenly
    you're doing 50, scale does matter.
        Mr. Issa. Ms. Bauman, you haven't been asked very much, but
    would you like to, as we say here, opine on those two questions
    of bigger versus better and who cares more about the health and
    safety, the processor and your local inspector or somebody
    who's brought in from somewhere in the country for USDA?
        Ms. Bauman. Yes. I would say, from a safety perspective, if
    there's any difference between small processors versus large,
    it depends maybe which data base you'd be looking at, because
    if--the USDA does publish all the testing that goes on in small
    and large plants. They have a public access data base. I don't
    know how to get there, but--and you will find that the small
    plants do have a higher incident rate of testing failures.
    However, that's--you'd want to call the word ``failure,'' but
    that is directly proportionate to the ratio of products tested.
        So, small plants are tested an incredibly lot more than
    large plants. So, they can look really bad on the data base
    until you realize which representation you're looking at. From
    a State versus USDA, I'm not aware of any difference in that
    either.
        Mr. Issa. Mr. Gunthorp--I could ask either of you this--
    but, is it fair to say that when your name is on the meat and
    your business goes from whatever it is to zero, maybe
    permanently from a standpoint of high-end restaurants and so on
    buying, that you're probably more likely to pull back any
    dubious meat because you cannot afford to have your brand hurt,
    where, quite frankly, the majors, yes, they have a brand, but
    they've had all these problems and they survived them.
        Mr. Gunthorp. I tell people all the time, there's a huge
    correlation between food quality and food safety. If you're
    selling to high-end restaurants, high-end retailers, our name
    is all about quality. So, we can't put anything out there.
    Small guys with one recall are done. Big guys, no name, it goes
    on.
        Mr. Issa. I'm going to have a rhetorical question for a
    moment for the record, and that is, a big chunk of our meat,
    not the majority, but a chunk of it comes from outside the
    United States. I think of New Zealand lamb and so on. My
    understanding is it's inspected when it gets here. So, to a
    great extent, meats from around the world enjoy the ability of
    being inspected after the fact, rather than intrusive visits to
    the factory. That may, in fact, be just as much of a double
    standard for the USDA to try to explain.
        So, with that, Mr. Chair--that one was for the record--I
    yield back.
        Mr. Massie. Thank you, Mr. Issa.
        Now, I recognize Mr. Correa for his questions.
        Mr. Correa. Thank you, Mr. Chair. I just thank you for
    holding this most important hearing.
        As I think about your comments, USDA versus the PRIME Act,
    we've got to have safety standards. I don't represent an area
    that we do any farming, primarily very urban southern
    California. We still care about safety of the products we
    consume.
        USDA, I've heard testimony today, fixing the USDA
    inspection. Do we need a nicer, kinder USDA?
        Ms. Bauman, you mentioned this in your comments that you
    get inspected more often. You feel you're held to a higher
    level of scrutiny because you're small versus a larger--the big
    four, so to speak. Is that because they're trusted more than
    you are? What is it, in your opinion, that drives more scrutiny
    of your operation as opposed to the larger guys?
        Ms. Bauman. Well, part of it is just how the regulations
    are written and exemptions made for high-speed slaughter. So,
    whenever animals are being slaughtered, an inspector is
    required to be present. Because of I can do far fewer in a
    day--what I do in a day is equivalent to like maybe what some
    of them do in a second--they have more time to see more stuff,
    bottom line. It doesn't mean that the big guys don't mess up
    more--
        Mr. Correa. So, that would argue that the inspection of
    your process, your product sounds to be more safer than that of
    a high-speed operation.
        Ms. Bauman. I would tend to think so myself. I have--and
    likewise--
        Mr. Correa. So, is there an ombudsman? Is there an
    inspector? Do you have a personal relationship with your
    personal USDA person that comes out to see you?
        Ms. Bauman. You have to because you're with them literally
    all the time.
        Mr. Correa. They would know how you do business, that you
    don't take shortcuts--
        Ms. Bauman. Exactly.
        Mr. Correa. --that you're actually there to do a good job.
        Ms. Bauman. Half of the skill of being a USDA plant owner
    is developing that relationship because they're your coworker.
    You have to figure out how to get along and how to achieve
    your--they can do their job and you can achieve your goals.
        Mr. Correa. I'm trying to get at why is it that you have
    same rules, same regulations, same set of law, same objectives,
    yet the outcomes seem to be different? You're held to a higher
    level of scrutiny, when safety appears to be something that at
    the end of the system is accomplished, so to speak.
        So, how do we change the system so that you're as
    competitive as the big four and you can essentially compete
    with the rest and those benefits of competition are passed on
    to my consumers?
        Ms. Bauman. Some of that would be--I'm never going to
    achieve the level of--I'm never going to be able to reduce my
    levels of inspection, if that makes sense, like the big guys
    can, because I can't--
        Mr. Correa. I don't want you to reduce levels of
    inspection. What I want you to do is be able to work with USDA
    so you're not at a competitive disadvantage.
        Ms. Bauman. Right. Part of that is plant owner education. I
    don't have the resources that Tyson does to explain
    microbiology and defend my practices. I don't have the
    resources to access--
        Mr. Correa. Explain that to who?
        Ms. Bauman. What's that?
        Mr. Correa. Explain that to who?
        Ms. Bauman. To the inspectors. Because everything I do in
    my plant has to be backed with scientific documentation to
    prove that I'm not doing anything to make my product worse.
        So, one, there's the small plant owner doesn't have that
    depth of knowledge. In Tyson, they can fly someone in if they
    need to know more information. That's a rhetorical company
    named there, but--in the large processors.
        Additionally, so it is that the small processors are--don't
    have the knowledge base by means of who they are, if that would
    explain it. Then there is the FSIS, diametrically opposed to--
        Mr. Correa. Let me cut you off in the last 30 seconds that
    I have.
        Ms. Bauman. OK. Go ahead.
        Mr. Correa. What would you--all of you, would you have a
    set of recommendations for us to look at, short of, of course,
    the PRIME Act, if we have to continue to work with USDA? What
    would be some of the top two or three recommendations that you
    would have to make your business models more successful?
        I only have 15 seconds.
        Ms. Bauman. Sure.
        Mr. Correa. I would welcome some testimony if you could
    provide that to my office.
        Ms. Bauman. I would say two things. Once again, not
    requiring inspection of stuff that doesn't need it. So, back
    to, if stuff's exempt, if it's being directly sold to
    consumers, let me save some time with the inspector and do the
    stuff that needs it.
        The other thing is being able to have a better
    conversation, an ombudsman, a mediation board, for when me and
    the inspector have a disagreement, we have somebody to go to,
    and we don't waste a year trying to get our voice heard.
        Mr. Correa. Thank you, Mr. Chair. I yield.
        Mr. Massie. Thank you, Mr. Correa.
        Now, I recognize Mr. Gaetz for questions.
        Mr. Gaetz. Thank you, Mr. Chair.
        I'm a proud cosponsor of the PRIME Act. I appreciate this
    hearing, if for no other reason that I'm not going to eat the
    bugs. So, I'm here for the where's the beef hearing.
        Mr. Chair, I would also observe that there's a great deal
    of economic opportunity here. As we look at the buying patterns
    of millennials, there's often great interest in having a
    greater connection to the farmer or the individual who was
    involved directly in the production of that food source, rather
    than moving through a lot of these branded processors.
        So, if we were to pass the PRIME Act, I don't just think we
    would achieve a great regulatory accomplishment, but I think
    you would actually be able to sell product at a higher price to
    people who are willing to pay it by virtue of that direct
    consumer relationship that is only being impaired right now
    because of what the government has done, wrapping the apparatus
    of government around these large businesses.
        I'm sure I'll learn a great deal more yielding my time to
    Ms. Hageman of Wyoming and allowing her to ask some questions.
        Ms. Hageman. Well, thank you, Mr. Gaetz.
        I appreciate the opportunity to be here as well. I'm also
    proud to be a cosponsor of the PRIME Act.
        Wyoming is one of the 29 States currently operating a State
    inspection program known as the Meat and Poultry Inspection
    program. Under current law, as has been repeated here several
    times, the meat processed at the State-inspected plants can
    only be sold intrastate.
        Now, as a product of my family ranch outside of Fort
    Laramie, Wyoming, and having dozens of family members who are
    in the livestock business, I can assure everyone here and the
    American public that every farmer, rancher, and every meat
    processing facility has every incentive to protect our meat
    supply and ensure the safe handling of our food.
        One of the other reasons that we are here today is to rebut
    some of the misguided arguments pertaining to this bill, and
    arguments which are mainly coming from the large corporations
    and packers who have essentially a monopoly when it comes to
    meat pricing and packing.
        Mr. Trotter, if the PRIME Act became law, do you believe
    that farmers and ranchers would abandon the existing supply
    chains whereby they sell to the feedlots which then serve the
    existing meat processors and packers, or would they continue to
    use the same process that they use now?
        Mr. Trotter. I think you'd see an expansion. You'd have a
    lot of the--look, the big feedlots have their purpose. These
    large industries do have their purpose, but what you have here
    is an opportunity for small businesses to expand. This would
    just be a result in net economic growth here.
        The large processors do have their place. When it comes to
    local businesses, like within your own State, making sure that
    they have products from the farm down the road that didn't need
    to be trucked 300 miles away to get processed at a USDA
    facility, there is a market for that. It's simply an expansion
    of everything else.
        You're not going to see the big four necessarily go away,
    but you are going to see competition around the edges, and
    you're going to see the biggest benefit for the smaller
    producers.
        Ms. Hageman. Well, so I think it's fair to say, then, that
    the PRIME Act merely gives farmers and ranchers more options
    when it comes to selling their cattle, and these increased
    options in turn provide increased benefits to the producers and
    stave off vertical integration, as well as allowing these
    producers to determine their own destiny rather than being at
    the mercy of the packers.
        We contacted some of the producers in the State of Wyoming
    and asked them to weigh in on some of the challenges that they
    have related to producing food, producing our beef, pork, and
    chicken, et cetera. One of the things that I thought was
    interesting was a comment from one of my constituents who said
    that our industry is crippled by the endless regulations coming
    from the EPA, FDA, and USDA. We spend countless dollars and
    hours tracking, documenting, and proving things that we do as a
    regular part of our operation. We have to pay experts to file
    reports because the regulations are so complicated to follow. A
    few examples of our struggles include the FD rules, CAFO
    nutrient management regulations, cattle tagging rules, and
    animal feeding operations and registrations.
        The other challenges that they talked about is that there
    is the industry monopoly that has been discussed several times
    today. Then the other thing is the unwillingness of the packers
    to work with our cattle producers, our livestock producers to
    actually address the price. We also have to be concerned about
    vertical--continued vertical integration.
        These are all challenges that our small businesses, our
    farmers and ranchers, really the backbone of so many of our
    communities, are facing with overregulation.
        I want to thank all of you for being here today, for
    sharing your stories, for discussing the importance of the
    PRIME Act, and for coming to Congress to find ways that we can
    fix the problems that your industries are suffering from. I can
    tell you that we're all committed to doing that. We're all
    committed to making sure that we're providing a safe food
    supply for the American citizens, the great people of this
    country. So, again, thank you for everything.
        I yield back.
        Mr. Gaetz. I yield back.
        Mr. Massie. The gentleman from Florida yields back.
        I'll recognize Ms. Scanlon from Pennsylvania for her
    questions.
        Ms. Scanlon. Thank you, Mr. Chair. I want to thank you for
    calling today's hearing, so we have the opportunity to
    highlight the high degree of consolidation that has occurred in
    our agricultural industry, obviously not a new problem for the
    country.
        Consolidation in grain, livestock, and meat processing has
    plagued the U.S. since the 1800's. It was those early
    monopolies that set the stage to pass most of our key antitrust
    laws that guide our policy to this day. A lot of Americans
    don't realize how consolidated, particularly the meat
    processing industry's become, and that just a handful of
    companies make, process, and sell most of the food that we eat,
    although they do know that over the past three years they've
    seen their food prices go up at the grocery store.
        The economic shocks of COVID and the Russian invasion of
    Ukraine have certainly highlighted the urgent need to introduce
    more competition. Where there's only two or three companies
    producing a staple good, like grain, eggs, or formula, any
    disruption of one company can lead to shortages and higher
    prices.
        So, today we're talking about meat processing. We've heard
    that three, four, or five companies control between 50-70
    percent of the various markets. In the past couple years, we've
    seen these companies use their size to push higher prices on to
    consumers, while charging farmers less for livestock and
    shortchanging worker wages and working conditions. So, the
    handful of meat processing plants that control the lion's share
    of the market have used their dominance in the market to reap
    record profits.
        The question for Congress should be how to address both
    food safety and competition, because deregulating large sectors
    of the meat industry doesn't really solve either problem.
        I'm particularly concerned about eliminating food safety
    regulations that might push serious health costs on to
    consumers. This includes both the ability to afford and
    purchase food that's been inspected and is safe, because not
    everyone's a millennial able to purchase high-end goods, as
    well as the impact of health costs if safety regulations are
    not enforced to help drive down costs, but then people get
    sick.
        So, I think the Agriculture Committee is the proper place
    to have an informed debate about USDA and food regs and how
    they need to be improved. In fact, traditionally that's where
    bills in this region have been referred. If the goal is lower
    prices and more choices for consumers, then improved and
    targeted antitrust enforcement is needed to help create that
    competition. It's more independent farmers, food processors,
    options for achieving those goals, and bills like the
    Prohibiting Anticompetitive Mergers Act or the Food and
    Agribusiness Merger Moratorium, and Antitrust Review Act are
    going to be helpful.
        So, I would love it if we were able to look at policies to
    strengthen the FTC and the USDA so they can break up
    monopolies, block bad mergers, and protect consumers, workers,
    and farmers from some of these unfair prices. I think that is
    probably a better focus for this Committee.
        Mr. Gunthorp, can you talk a little bit from the boots-on-
    the-ground perspective about how large-meat processors are
    using their size to squeeze our independent farmers and how
    they're using that size and influence to shape new regulations
    in a way that hurts our smaller farmers and food producers?
        Mr. Gunthorp. Sure. First, we have to look at the fact
    that--I don't think most people realize--about 25 beef
    slaughter plants, 40 pork slaughter plants, and only 200
    poultry slaughter plants slaughter almost all the meat in this
    country. It's 85-86 percent of the beef, 90 percent of the pork
    for those.
        So, this is a very real problem. I'm here to warn you today
    that this problem is no longer just the United States' problem.
    These companies are multinational corporations that are doing
    this globally, and they're taking this wealth that they're
    extracting from rural America right now to buy up processing
    and slaughter capacity globally. This is going to be a monopoly
    worldwide unless we address it today.
        So, it causes consumers harm. It causes farmers harm. It
    creates a lack of opportunities in rural America. If you look
    at the economic metrics of rural America, they're worse than
    the inner cities. This is because of concentration and
    consolidation taking away opportunities. Most farmers nowadays
    don't even own the livestock or poultry on their farm. We've
    returned to a feudal serf system.
        Ms. Scanlon. Thank you. Really appreciate your insights,
    particularly about how that monopolization is global and really
    hurting our American farmers. So, thank you.
        I yield back.
        Mr. Massie. Thank you, Ms. Scanlon.
        I recognize Ms. Spartz from Indiana for questions.
        Ms. Spartz. Thank you so much, Mr. Chair.
        It's my honor to be here with fellow farmers, as I've been
    involved in a lot of businesses, but this is one of the
    toughest ones when you depend on government and God. So, I
    appreciate being here, also my fellow Hoosier.
        I have seen that food security is also a national security
    issues, especially during COVID times, and we see what the
    power oligopolists have right now in many parts of the market,
    but including food processing, with creating oligarchs,
    cartels, and with some actual child labor issues, including the
    State of Indiana, which raises very significant concerns. So, I
    appreciate Mr. Chair having this hearing.
        Before I came here, since I'm not involved in livestock, I
    do soybean farm, I actually met with farmers in my district to
    get their input. I wanted to run something by you.
        PRIME Act is a great legislation. I'm surprised that we're
    even dealing with intrastate commerce. I don't know how
    Congress gets involved into everything. Just one issue they
    brought up to me was interstate commerce too, where they say we
    have this one-size-fits-all approach with Federal government
    centralizing a lot of regulations. States and businesses have
    liabilities. If you're not going to follow good safety laws,
    you will not be in business for very long. The same States,
    they have agriculture. It is a big part of GDP of States. They
    have an interest to have good production and good standards.
        There is some flexibility, like some regulations, Indiana
    Department of Environmental Management has quite more stringent
    even the Federal government. So, you actually can apply to
    local markets.
        So, one of the things they brought up to give more
    flexibilities for States to do inspections was also State
    inspectors, not maybe this large, huge processes would be
    dealing with just USDA factors. States can develop standards
    within the State to deal with smaller processors where it would
    be more competition and bring ability for actually these
    midsize companies to survive, because they cannot hire
    expensive attorneys and scientists and everything else, but
    they might not need it because they don't have the large type
    of mechanic processes as maybe some other ones.
        So, Mr. Trotter, I wonder, since you represent organization
    of State legislators, I used to be a member of--and I actually
    got an Iron Lady Award from them, but I wanted to get your
    thoughts on actually maybe doing more flexibility in the farm
    bill for States to have ability to do this inspections for
    interstate commerce too.
        Mr. Trotter. Yes. So, for commerce within a State, it's an
    intrastate commerce question, not an interstate commerce
    question. The Federal government definitely has jurisdiction on
    interstate commerce, but at the end of the day, this is a
    federalism question: Does the authority lie with the Federal
    government or does it lie with the State government? If we're
    talking about commerce within its own borders, inspection
    within its own borders for things that only stay in their own
    borders, that's clearly a State authority that's been subsumed
    by the Federal government. It's something that Congress has the
    ability to go ahead and delegate back to the States, and it's--
        Ms. Spartz. So, it's one thing asking them to delegate it,
    but what about interstate commerce to have more flexibility for
    in-State inspectors also to do some inspection maybe for
    smaller plants for interstate commerce also? Because we don't
    have to regulate everything, and we can set baselines, but we
    need to--don't have to one-size-fits-all approaches because
    States are so unique in agriculture.
        Mr. Trotter. Yes. States are the laboratories of democracy.
    We have 50 different opportunities in this great Nation to go
    ahead and figure out what works. You have to enable States to
    be able to do this without doing a one size fits all. Right
    now, what we have is a one-size-fits-all system, the same thing
    that goes through these vertically integrated multinational
    conglomerates as what happens with the small producers that are
    here at the table with me.
        Ms. Spartz. Maybe, Mr. Salatin, if you can briefly--each of
    our presenters--just get your thoughts on that, too.
        Mr. Salatin?
        Mr. Salatin. Yes. So, the germination tray for innovation
    is embryotic prototypes. You cannot have solutions to problems
    without prototype innovation. You don't start big; you start
    small.
        So, one of the problems we have right now is that with this
    overarching Federal domination of State choice, all right, if a
    State--for example, Maine, when they did their food sovereignty
    law, they said, ``In Maine, if a farmer and a consumer want to
    work together, we're not going to get a bureaucrat involved.''
    That's fine. Somebody at church, you want to sell, we're not
    going to get involved.
        Soon as they passed the law, here came Federal in and said,
    ``If you do that, we're going to withdraw all inspection from
    the State.'' Maine won't be able to sell anything to anybody
    out of the State. So, immediately Maine caved, and it was gone.
        So, this body right here has the chance to offer innovative
    experimentation opportunities for our 50-State experiment. We
    hear safety. Well, people are going to get sick if we have
    uninspected food. We don't know that. Maybe they'll actually be
    able to afford better food, it will be more available, and
    their food system will be more secure. Until this body grants
    freedom to try, to create a germination tray of innovative
    ideology, we don't know if we have more people or maybe we have
    healthier people because they wouldn't be condemned to the
    oligarchy. Maybe that would be the outcome.
        Ms. Spartz. Thank you.
        My time has expired. I yield back. Thank you.
        Mr. Massie. Thank you, Ms. Spartz.
        I now recognize Mr. Ivey for his questions.
        Mr. Ivey. Thank you, Mr. Chair. Thank you and the Ranking
    Member for putting this hearing together.
        Thank you to the panel. I appreciate you coming in and
    sharing your thoughts and your insights.
        I come from a district, it's the eastern border of
    Washington, DC, so we don't have a lot of processing plants
    over there. It's been a long time since I've been on or near a
    farm. When I was a little kid in North Carolina, we lived near
    one, and my father owned soybean, actually, somebody mentioned.
        For the track here, it seems to me there's sort of two sets
    of things that are going on that I'm sort of curious about. One
    is the antitrust issue, and all of you haven't talked so much
    about that. I guess there's been more conversation from up here
    about that. The issue seems to be a sense of there is basically
    four entities that are running the show and controlling the
    markets, and they're too big, and they're now growing to become
    international forces in that realm as well.
        As Ms. Scanlon pointed out, that would seem to be the area
    that antitrust legislation or enforcement could address. I know
    you've explicitly called for that, Mr. Gunthorp. I'm interested
    in pursuing that. I didn't realize until this hearing that
    those forces had become that big and had that much market
    dominance.
        First, Mr. Chair, I'd be kind of curious about if we move
    forward with this, because it's not clear to me exactly the
    impact your bill would have on those four entities. So, from
    the standpoint of some suggestions, like Mr. Johnson, he's
    talking about breaking some of them up, and that would be a
    whole set of hearings, it seems to me, on market forces,
    economists telling us, well, what would you have to do from a
    breakup standpoint to actually have an impact to try and
    address some of these issues. I'd be very interested in hearing
    about that. I haven't made a decision one way or the other yet,
    but I'd be curious about it.
        Second, with respect to your bill and some of the things
    that you've raised, it sounds like some of that would make
    sense. I live in a community where we have farmers that come up
    on the weekends, and they sell their goods at the local school
    or community center, and it happens all over the area. Mr.
    Gaetz said something about baby boomers buy that too, right.
    So, there's an openness to it as well. I'm not clear on some of
    the issues as to whether the bill would address that or not.
        There were some points that were raised that I really would
    like to hear more about. I don't know if they're going to be in
    our jurisdiction or the Agriculture Committee. Mr. Gunthorp,
    you suggested possible issues of reform, redefined plant size.
    You mentioned inspection reform. Ombudsman, was your
    suggestion. You mentioned mediation board. As a former
    litigator, I'd be careful about what you ask for on some of
    those.
        The point you're making is that if you have to go all the
    way down the track of litigating the issue, it could take two
    years, and you might be out of business just to challenge one
    inspector's ruling. I'd be open to trying to figure out ways to
    find some kind of expedited appeal or resolution to try and
    address that.
        Ms. Hageman's also over different hearings testify--or
    brought to our attention the heavy weight that regulations can
    bring on some of these entities. You're really at a distinct
    disadvantage if you're trying to take on Uncle Sam without
    having a gigantic budget behind you. So, I'd be open about
    that.
        The truth and labeling issue too, which we didn't get into
    much--and maybe that's an Agriculture Committee issue too, but
    I take your point. I go to the grocery store--we actually had a
    briefing about this a few weeks ago, and there are all these
    things about whether it's organic or whatever. It's hard to
    keep track of what they really mean and who's promising what
    and who should I buy from because my family and others want to
    actually support smaller farms and businesses, but it's hard to
    figure out how to do that sometimes.
        So, Mr. Chair, I think there's definitely room for
    bipartisanship here. I think there are ways we could find ways
    to try and address some of that. I do think if we do the
    antitrust piece, though, one of the questions I'd have is the
    custom slaughterhouse approach. I might have been Mr. Trotter,
    you used the phrase ``around the edges,'' which is important. I
    think we want to make sure we find ways to help small
    businesses, small farms to thrive and find their own markets.
    If it's not going to have an impact on the larger antitrust
    issue that Ms. Scanlon identified, and Mr. Johnson did too, I
    think that can't be our only track for solutions. We have to
    find additional ways to try and address that as well.
        In short, we've got to walk and chew gum in dealing with
    this issue.
        Mr. Chair, I commend you for your legislation and for this
    hearing. Mr. Johnson, I appreciate your comments too. I hope
    that we'll be able to continue working with you and your
    community to try and find ways to address these issues.
        Mr. Massie. Thank you, Mr. Ivey. Mr. Ivey yields back.
        I'm going to yield my--or recognize myself for my questions
    now.
        There's been a lot of discussion here, and I want to put it
    all in context. There's sort of an oligopoly solution where the
    big meat packers control, and then there's this other path
    which is farmers can sell directly to consumers, but they have
    to sell them the animal.
        So, these custom slaughterhouses exist because of one
    exemption right now, these hundreds of thousands of custom
    slaughterhouses. That is the farmer can sell the consumer a
    whole animal or half an animal. The problem with that is it's
    regressive. How many families can afford to buy 500 pounds of
    meat? That's the only alternative that exists.
        So, the PRIME Act seeks to expand that alternate path,
    which has made nobody sick, and it's made a lot more people
    healthier.
        So, I want to talk about, Mr. Salatin, sustainability,
    affordability, traceability, and safety. Those are concerns
    that were all raised.
        Mr. Salatin. Yes.
        Mr. Massie. Can you speak to each of those four--and I'll
    go over them one at a time--sustainability, affordability,
    traceability, and safety--and talk about how enabling or
    empowering a more local food system enhances all those things;
    it doesn't detract from them?
        Mr. Salatin. Yes. We've heard a lot about protecting the
    public here. It's time to protect the private. So, on
    sustainability, one of the beauties of offering this kind of
    choice to the consuming populous is that it does actually
    create options for farmers and consumers who want to opt out of
    whatever the system is, whether it's like the Gunthorp family
    that opted out of the industrial pork system or whether it's a
    consumer who's wanting to opt out of Walmart. The opt-out
    option creates a sustainability because it's about resilience.
        So, when fertilizer--for example, on our farm, when
    fertilizer jumped 400 percent when Putin invaded Ukraine, we
    didn't miss a beat because we don't buy any of it. These are
    the kind of farmers that we're dealing with. So, it works all
    the way up the food chain, building soil, earthworms,
    sustainability.
        Affordability is a big one because, as you mentioned, not
    only does the current system require large volume buying, the
    average American now can't put their hand on $400. So, you
    can't buy volume. It's pretty difficult. Because of the
    overhead and paperwork costs of inspection, it artificially
    elevates the price of food. So, a custom house operating at a
    much lower capitalization cost for infrastructure, a lower
    paperwork cost can actually do what a Federal-inspected plant
    does for, let's just say a dollar, it can do it for 75 cents.
    That cost gets passed on to the product, and so suddenly, not
    only do we have a sustainable secure food supply--does anybody
    think if we'd had 300,000 smaller plants accessing the country
    instead of 300 mega plants at COVID, but we would have had less
    of a hiccup in the food system if we'd had 300,000 plants
    instead of 300. So, affordability is a big deal.
        Traceability is another one. Right now, a typical burger at
    a burger joint has pieces of 600 animals in it. So, if anybody
    thinks that all those 600 animals in a burger at McDonald's is
    traceable, I've got a bridge in Brooklyn to sell you. Trust me,
    it is not traceable. OK? So, the problem is we've built this
    system, and we have a trust in this system that's actually let
    us down. It's not working.
        What was your fourth one?
        Mr. Massie. Safety.
        Mr. Salatin. Safety. That's the big one, because the safest
    food comes from smaller plants that have--somebody over here, I
    don't remember who, was talking about branding--that when you
    put your brand behind it, you have a really vested interest in
    making sure that is a safe product.
        One of the things that you notice with all these recalls--
    what's the first thing a CEO says as soon as they've got a
    product recall? Well, we've complied with everything. The big
    industry hides behind the skirts of the inspection service all
    the time. A place like me, we don't have any skirts to hide
    behind. If we sell bad chicken, bad beef, or bad pork chops, it
    comes back on us.
        I'll close with this story because I think this is
    foundational to what we're talking about here. When Michael
    Pollan wrote ``Power Steer'' in The New York Times and
    basically blew the door off grass-finished beef market, I got
    contacted by--I won't mention the name, but the largest fast
    food chain in the country, and they were interested in offering
    a grass-finished burger.
        Well, they saw some of the things that are written about
    them, and they said, ``Oh, maybe we don't want to go visit
    them.'' So, they sent their D.C.--their counsel, their retainer
    attorney, down to check us out, and we spent half a day
    together. As I was talking bought the disparity between the way
    a small plant and a large outfit deal with these subjective
    inspections, he said, ``Oh, that's just business.'' He said,

            At our place, when we have an overzealous inspector or a little
            tyrant or one of the 20 percent top or bottom, they call me. I
            go to the commissioner at FSIS and get them fired. That's just
            the way we do business.

        A small plant like ours, we don't have that kind of clout.
    We don't have that option. So, we're held hostage by this
    system that I've already said measures their efficacy in pounds
    per inspector personnel hour. Well, I didn't know that they
    were measuring efficacy by pounds per hour. I thought it was
    about safe food.
        So, the whole thing is incentivized to be prejudicial to
    small outfits, and that's why we need some sort of option that
    allows a parallel universe to exist, because that's the only
    way that you can actually create competition and accountability
    within the monopoly.
        Mr. Massie. Thank you, Mr. Salatin.
        I now recognize the Ranking Member of the Subcommittee, Mr.
    Johnson, for his questions.
        Mr. Johnson of Georgia. Thank you, Mr. Chair.
        I move to enter into the record a letter dated June 13,
    2023, entitled ``Where's the Beef?'' without objection.
        Mr. Massie. Without objection, so ordered.
        Mr. Johnson of Georgia. Thank you.
        Mr. Trotter, you are here with the American Legislative
    Exchange Council, which has, among its members, the
    organization known as the Americans for Tax Reform, which is
    Grover Norquist, correct?
        Mr. Trotter. Yes.
        Mr. Johnson of Georgia. You're familiar with his pledge
    that everybody has signed so as to limit the no new taxes
    pledge? You're familiar with that State, local, and Federal
    legislators have signed, pledging to impose no new taxes,
    correct?
        Mr. Trotter. I have heard of it.
        Mr. Johnson of Georgia. You have heard of his famous pledge
    to make the Federal government--to shrink it so small that you
    can drown it in the bathtub. Everybody's heard of that, and
    you've heard of it too, correct?
        Mr. Trotter. It sounds familiar.
        Mr. Johnson of Georgia. Yes. So, now we've had the DOJ, the
    Federal Trade Commission, the Antitrust Division of DOJ, all
    these Federal agencies that Grover Norquist wants to get rid
    of, wants to shrink so that you can drown it in a bathtub. They
    are the ones responsible for making sure that we don't suffer
    from a lack of competition policy, which leads to consolidation
    in the meat packing industry, which is what we're talking about
    today, correct?
        I mean, if one side wants to cut the Federal government's
    ability to engage in competition policy while the other side is
    talking about where we need more competition policy to prevent
    what we're talking about today that's a basic conflict that's
    hard to resolve.
        Another thing that the government does is to protect food
    quality, safety for Americans. So, if we deregulate the
    Department of Agriculture, as we've been doing, and it hurts
    its ability to actually perform the service that we need it to
    perform, and we're here complaining about the bureaucracy not
    being as quick and agile as it needs to be to deal with small
    meat processors, and it has a lot to do with the shrinkage of
    government, which is something that ALEC has been promoting
    throughout its existence.
        Tell me this, Mr. Gunthorp, chicken processors claim that
    the processors control the system so entirely that the system
    is akin to sharecropping, where the vertically integrated
    poultry companies own most of the supply chain and trap small
    farmers in debt, while keeping the farmers' profit margins at a
    razor-thin edge.
        How has that consolidation hurt family farmers? Have you
    ever been a contract grower?
        Mr. Gunthorp. We've never been a contract grower. I
    ventured off on this wild journey because we would've had a
    choice, could have put up contract barns, and I would quit
    before I'd put up contract barns.
        The farmers--I mentioned earlier it's a feudal serf system.
    They own the mortgage, the mortality, and the manure. That's
    all they own. The opportunities--there's that whole risk-reward
    relationship. They give up some of the risk for no chance at
    any reward. It's not a system that works.
        Mr. Johnson of Georgia. It's really a system of pimping
    that the Federal government has allowed to take place.
        Mr. Gunthorp. Yes, but, let me ask you this question. The
    CDC reports that each year 48 million people get sick from
    foodborne illness, causing 128,000 people to be hospitalized,
    and the result also is the death of $3,000--excuse me--3,000
    people.
        Under the PRIME Act, slaughterhouses and meat processors
    would be able to sell meat within their State without having to
    meet the Federal baseline requirements for commercially sold
    meat.
        If this bill, the PRIME Act, is enacted would instances of
    contaminated meat rise? If so, how could you trace it back to
    the processor? Are States equipped to meet the challenges posed
    by the commercial sale of uninspected meat?
        Mr. Gunthorp. I'd love to see you guys invite me back to--
    it's probably not this Committee, but a Committee that we could
    actually talk about food safety from a processor's standpoint.
    We have about a million illnesses from salmonella a year in
    this country. USDA implemented its salmonella performance
    standards in 2011. That number of cases of salmonella has done
    nothing but stay about the same.
        It's a very complex issue, and food safety takes all the
    way from production to the plate to solve, and I don't think
    we've took a holistic approach. USDA takes that approach of
    right there in the middle. Doesn't literally look at
    production. It can't legally, nor can they legally look at it
    after it leaves the plant. It's complex and complicated, and we
    really ought to solve it.
        Mr. Johnson of Georgia. Well, you can blame ALEC for that
    problem.
        Mr. Gunthorp. No, I think it's more complex than that. To
    get back to your other comment it's your guys' job to ensure
    that deregulation doesn't--
        Mr. Johnson of Georgia. We're all Members of ALEC.
        Mr. Gunthorp. Oh, OK. Well, I think it's your guys' job to
    ensure that deregulation doesn't give the big guys free rein to
    do whatever while giving the agencies the tools to harass us.
    That's my argument.
        I'm not a fan of what is, quote,

             . . . text deregulation, because most of the time, from what I
            see out in the field, it's letting the big guys do what they
            want while you still allow the tools for the agencies to harass
            us little guys.

        Ms. Hageman. [Presiding.] Mr. Gunthorp, I appreciate your
    comments and your insight. I agree with you. I think that we do
    need to have a hearing on food safety and address the specific
    issues that you've identified.
        Mr. Gunthorp. A hearing on deregulation on what the
    actual--on the agency capture, because these--I've been
    involved in--I was involved in the Pew/Meridian group that
    looked at a rewrite of food safety inspection laws, because I
    think you have 13 agencies, not just USDA, that deals with all
    the food safety. I was on the National Advisory Committee for
    Meat and Poultry Inspection. These are complex issues--
        Ms. Hageman. They are.
        Mr. Gunthorp. --that we're probably not going to solve
    today, but we ought to take--you eat an elephant one bite at a
    time, and we've got to start.
        Ms. Hageman. Well, then the agency captures something that
    has really affected almost every industry in this country, and
    the livestock packing and food industry is one of them.
        So, I'm going to now recognize Mr. Fitzgerald for five
    minutes of questioning.
        Mr. Fitzgerald. Thank you, Madam Chair.
        I'm going to yield my first minute to Ms. Spartz.
        Ms. Spartz. Thank you.
        As a former proud member of ALEC and State legislator, I
    just wanted to really rebut a little bit what Mr. Johnson just
    said. We're looking here not in a top-down approach. The
    monopoly oligopoly issue was created by government. It's a
    natural--not natural monopoly. We're looking at how we can
    create competition for value bottom up and how we can have more
    quality delivered to consumers. Because, unfortunately, what's
    happening right now, Federal government hasn't been able to
    enforce what they need to do, and they're dealing with core
    functions. All these agencies, including the Federal Trade
    Commission, is dysfunctional. All they're doing, they're
    catering more and more to large special interest groups. They
    become rich and rich, and we are creating oligarchs and cartels
    right here in Congress.
        So, I think we have to know how we can help the little guy
    and create more flexibility and competition on the ground,
    competition for value, and States are much better set up for
    that. Let's deal with issues that are important for this
    institution, like national security, securing the border,
    having strong military, and having good interstate commerce.
        I yield back.
        Mr. Fitzgerald. Reclaiming my time.
        Wisconsin is one of 27 States that offer State-run meat
    inspection programs. As of 2013, participants in the
    Cooperative Interstate Shipment program was over the top. We're
    very supportive of our small meat processors in Wisconsin. I've
    got a handful of them that are within just miles of my home,
    and they do everything from beef to chicken to venison. We have
    a nine-day deer gun season, and there will be a line a mile
    away from the small meat processor trying to do everything from
    hot sticks to venison brats to summer sausage, right. So,
    there's a culture there.
        The result is nearly 500 State, Federal, and custom exempt
    meat processing facilities in Wisconsin that in 2018 processed
    more than 2.2 billion pounds of meat.
        I say this not only to highlight the important work of the
    processors in Wisconsin, but also to stress how impactful
    Federal regs can be on the small processors as well, which you
    hear from all the time.
        So, Mr. Salatin, I thought I'd throw this to you. I know
    it's a big question, but because you have a history of helping
    small processors, do you see a difference in the way that they
    deal with the USDA requirements compared to, obviously, the
    large, the big four, and if they have the capability of dealing
    with these very onerous USDA rules and regulations?
        Mr. Salatin. Yes. The way to deal with them is quite
    different when you're big versus when you're small. I'll give
    you a personal story at our plant. We had our kill floor guy
    retired, and so the second guy moved up. The first day on the
    job, first day for a brand-new inspector--remember when you're
    a small plant, you get the newbies. So, we had a new inspector,
    a lady, and she'd been told, ``Look, you're entering a man's
    world.'' You better make sure that you--so she'd been read the
    Riot Act by her superiors.
        She comes in first day on the job, new kill floor manager.
    Most of the inspectors, they kind of stand back and just kind
    of watch the kill floor, watch the room. Then they're going to
    grab through the guts a little bit. She was hovering right over
    the shoulder, OK, almost like playing piggyback with the guy.
    He was nervous, first day in charge of the kill floor. He
    misses the pig. If you've ever heard of missed pig with a
    captive bolt, if you've ever heard a wounded pig, it's not fun.
    So, he's shaky. He puts a second thing in, hits it, and the pig
    goes down.
        She then goes in and writes us up for a felony level animal
    abuse charge, closes the plant for a week. There's no appeal.
    There's no nothing. We finally got back open. So, we couldn't
    pay our employees. We couldn't serve our customers. People
    didn't eat--all right. We get back open.
        The bottom line is that if our HACCP plan, where it says,

            Administer captive bolt in knot box and then slit throat, step
            B, if instead it had, A, administer captive bolt; B, if A
            misses, redo A, we would have been perfectly fine.

    As Ms. Bauman said, we don't have the capability--we don't have
    the money to go to all the trade shows and the industry where
    the big guys sit around and play golf and drink and wine and
    dine each other telling them how to game the system. So, we
    didn't know about the option of B in the HACCP plan,
    readminister A, so we get shut down for a week.
        This is the kind of prejudicial thing that happens to us
    small operators routinely. It happens with microbial checking.
    It happens with infrastructure requirements. It happens with
    these kinds of things. That is exactly the kind of thing that
    happens.
        Mr. Fitzgerald. Thank you very much for that answer.
        I yield back, Madam Chair.
        Ms. Hageman. Thank you.
        The Chair now recognizes myself for five minutes of
    questioning.
        One of the things that strikes me as I listen to your
    testimony today and the discussion that we've had is I often
    say that government is always trying to fix its last solution.
        The Federal government, through misguided laws and
    regulations, has created the monopolistic problems that we've
    talked about, the agency capture that has been raised, the
    regulatory burdens that have been discussed, and now we need to
    fix this mess. The PRIME Act is an excellent step in that
    direction.
        Mr. Salatin, if under the PRIME Act farmers and ranchers
    are able to feed their livestock for a longer period of time
    because they're able to sell or contract with the independent
    processors that we've been talking about, rather than a
    feedlot, do you think that there would be benefits to the
    consumers as well?
        Mr. Salatin. That's probably the most unsung story of the
    hearing today is the benefits to the consumer.

        (1)  They wouldn't be subjected to only this oligarchical
    funnel. They would now have lots of options. So, that creates a
    more resilient secure food supply, a more stable food supply
    for shocks and black swan events. All right.
        (2)  They would be able to buy small volumes instead of
    large volumes. So, they wouldn't have to maintain either as
    large a freezer or as large a bank account. It would be a more
    democratic access to people that can't afford the large
    volumes.
        (3)  The price would come down because they don't--because
    it doesn't have to be pushed through this very expensive
    capital and paperwork and regulatory intensive sieve of small
    plant Federal inspection.
        (4)  Finally, that they would know more where their meat
    came from, and there would actually be more overall
    accountability within the system from traceability,
    responsibility.

    All those kinds of things would happen because it is a smaller
    relational--it's a more relational intimate transaction rather
    than a nameless, faceless, label on a supermarket shelf.
        Ms. Hageman. Well, I think that's a very good summary.
    Under the Federal program and the Federal laws and regulations
    that have set this up, in Wyoming, we have 12 USDA meat
    processors and 10 State-inspected slaughter facilities. The
    meat that is processed under our State inspection can be bought
    and sold within the State, but not outside of the State.
        Mr. Trotter, is there any reason to believe that there is a
    lesser quality of meat or a less healthy meat or a less safe
    meat that is being produced in our State-regulated facilities?
        Mr. Trotter. The way the current law is set up, the State
    authorities, the State inspectors are held to exactly the same
    standards as their Federal counterparts. The facilities
    themselves are also held to the same standards as their Federal
    counterparts. So, no, it's really up to the same standard. It
    is just a different agency going in and enforcing these
    standards. The agency themselves are reviewed by FSIS and USDA.
        Ms. Hageman. So, it really comes down to just a different
    entity employing the inspector.
        Do you think that Congress should reform the Wholesale Meat
    Act?
        Mr. Trotter. I'm not sure I could comment quite as well as
    some of the other people here on that, but it's something
    definitely worth looking at.
        Ms. Hageman. OK. Do you have any policy recommendations for
    the Subcommittee today?
        Mr. Trotter. I would say that the Subcommittee and
    Congress, in general, has the opportunity here to empower small
    businesses without actually detracting from any Federal
    oversight. At this point, you can empower these small
    companies, the one- or two-person businesses that are
    throughout the Nation, thousands of them, that are able and
    willing and ready to help empower other small businesses,
    restaurants, grocers, and people in their local communities.
    This is not something that necessarily should have Federal
    inspection and Federal--just direct oversight day to day for
    very small parts of the market here.
        There are ways by, essentially, returning this power to the
    States. States can go ahead and set their own standards. That
    is the purpose of State governments and just the concept of
    federalism as a whole.
        Ms. Hageman. Mr. Salatin, you said something today that
    really resonated with me, and you used the word ``freedom.''
    That is really the foundation of our Constitution and our
    republic. I respect the fact and understand and appreciate your
    understanding of how freedom is related to the very topics that
    we're discussing today.
        All four of you have been wonderful witnesses. We
    appreciate the comments and the commentary that you have
    provided, the personal experiences that you have had, and why
    this is such an important issue, not just for you, not just for
    our small producers, and not just for one segment of our
    industries. This has to do with food supply, this has to do
    with the supply chain, this has to do with being able to
    provide affordable beef, pork, chicken, and venison to the
    citizens of this great country.
        I just truly believe that one of the things that our
    government should be doing is we need to make sure that we are
    adopting policies and regulations and laws that do not increase
    the cost of food, housing, and energy. Your contribution today
    allows us to address one of those very important legs to that
    three-legged stool, and I appreciate it.
        With that, I believe that concludes today's hearing. We
    thank you again for appearing before the Committee today.
        Mr. Johnson of Georgia. If I might, Madam Chair?
        Ms. Hageman. Without--what is it?
        Mr. Johnson of Georgia. I'd just like to make a closing
    comment.
        Ms. Hageman. No. I think that we're just going to go ahead
    and finish the hearing--
        Mr. Johnson of Georgia. Well, the Chair took liberty to do
    a second round of questioning, did she not?
        Ms. Hageman. Oh, no, I didn't. That was my first round of
    questioning. I had Matt Gaetz'--he yielded his time to me. So,
    I did not.
        So, with that--
        Mr. Johnson of Georgia. Well, with a closing statement
    having been rendered by the Chair, I would think that a closing
    statement by the Ranking Member would be appropriate.
        Ms. Hageman. Without objection, all Members will have five
    legislative days to submit additional written questions for the
    witnesses or additional materials for the record.
        So, Mr. Johnson, you have the ability to do that.
        Without objection, this hearing is adjourned.
        [Whereupon, at 12:15 p.m., the Subcommittee was adjourned.]

        All materials submitted for the record by Members of the
    Subcommittee on the Administrative State, Regulatory Reform,
    and Antitrust can be found at: https://docs.house.gov/
    Committee/Calendar/ByEvent.aspx?EventID=116086.

                                     [all]