Recently, in a letter to the U.S. Secretary of Agriculture, the North American Meat Institute, a mouthpiece for the corporate meatpacking industry, complained that the Biden Administration’s work to combat concentration in the agriculture industry cannot ignore the “fundamental principles of supply and demand.”
Let us look at some facts to counter their claims. In 1977, the largest meatpackers controlled 25% of the beef supply. Today, just 4 corporations control 85% of the beef supply.
The Meat Institute lobbied to remove Country-of-Origin Labeling (COOL) and succeeded in 2015, so now any beef product from anywhere in the world could be labeled as “Product of the USA”, no matter what country the meat comes from. This matters for both consumers and farmers. For example, in 2014, when the U.S. had mandatory COOL, cow/calf producers were paid around $518 per cow/calf unit. In 2020, that margin dropped to $85 per unit and is projected to be around $120 per cow/calf unit this year. This means cattle farmers are operating below their cost of production–meaning they are losing money on every animal they sell.
Meanwhile, we are importing more and more cattle and boxed beef, which undercuts prices paid to U.S. cattle producers. In 2020, during the pandemic, the U.S. imported a record 4.4 billion pounds of beef and only exported 2.9 billion pounds.
Right now, the price paid for fed cattle (cattle ready for processing) is the same as it was in January 2020, even though the price of beef has risen significantly for consumers, who have seen their grocery bills rise and meat prices skyrocket. Long story short: cattle farmers are struggling while meatpackers enjoy record profits.
The meat lobby is trying to make you (and policymakers) believe that COVID and lack of labor is causing this. They want you to believe that consolidation and centralization of the meatpacking industry has nothing to do with our current challenges, for both the farmer and consumer.
The truth is, over the last three decades, corporate consolidation and control have put small and medium-sized meat processing facilities out-of-business, while paying farmers less and charging consumers more. Diversity in our food system, including meatpacking, allows for more resilience, in good times and bad.
With just four companies controlling almost the entire beef industry, supply and demand is virtually an illusion, and so is the Meat Institute argument. Its business practices not only make it the scapegoat, but the problem as well.
We as producers and consumers can make a change happen. There are bills currently moving or being debated that could help.
The bipartisan “50-14 Bill” sponsored by Sen. Charles Grassley, R-Iowa, and Sen. Jon Tester, D-Mont., would require meatpackers to purchase 50% of their supply from the market and own their supply for 14-days or less before slaughter.
The “American Beef Labeling Act of 2021” sponsored by Tester, Sen. John Thune, R-S.D. and Sen. Mike Rounds, R-S.D., and Sen. Cory Booker, D-N.J., would reinstate mandatory COOL and ensure that “Product of the USA” really means the beef was “born, raised and harvested” in the USA.
Bipartisanship is rare. It is up to us to push our Congresspeople to make these bills law. We all know nothing gets done in Washington, D.C., without “We the People.” So now it’s up to us.
Darvin Bentlage is a fourth-generation cattle and grain farmer and occasional contributor to the Missouri Independent, which first published this essay.