Even though the cards are often stacked against us, farmers are the ultimate optimists.
I’m a 4th generation cattle and grain farmer, and, right now, I’m optimistic that, for the first time since Teddy Roosevelt with the Packer and Stockers Act of 1921, we have a president that is trying to take on corporate control of our farm and food system.
Why is this necessary? JBS, Cargill, Tyson and National Beef (Marfrig) control 85% of the beef market; four meatpackers control 54% of the poultry market; and, four meatpackers, JBS, Smithfield, Tyson and Hormel control 70% of the pork market. JBS and Marfrig are Brazilian, and Smithfield is Chinese.
Just this month, JBS is paying $52.5 million to settle a price-fixing lawsuit accusing JBS and other meatpacking companies of conspiring to limit supply in order to inflate prices and boost profit. Included in this antitrust litigation are Cargill Inc, National Beef Packing Company and Tyson Foods Inc.
In the seed market, the Big 6 have consolidated into the Big 3 — Monsanto/Bayer is a German corporation, ChemChina/Syngenta is a Chinese corporation and Dow/Dupont is domestic.
In fertilizer, Mosaic controls 80% of the phosphorus used in the US. Phosphate fertilizer costs have gone up as much as 200%, and Mosaic’s August phosphate fertilizer earnings were up $200 million over 2020 profits. CF Industries, which owns 3 of the top 5 nitrogen urea plants, had revenue for the quarter ending September 30, 2021 of $1.362 billion, a 60.8% increase year-over-year. For the twelve month period ending September 30, 2021, CF’s revenue was $5.1B, a 25.28% increase year-over-year. While the market giveth to farmers, monopolistic control of our inputs taketh away.
The biggest injustice is seen in beef, and the effect on both farmers and consumers is most visible right now.
The beef industry is the largest sector of U.S. agriculture. In 1980, the top 4 meatpackers controlled 36% of the market. Since then, deregulation and lack of antitrust enforcement has resulted in historic concentration in the meatpacking industry. Today the top 4 meatpackers control 85% of the beef market. Currently, consumer prices are at historic highs, while cattle prices remain low.
Corporate Ag public relations firms and lobbyists blame the pandemic and increased input costs for rising consumer prices, but, if that were the case, then their profit margins would be relatively flat. Instead, corporate meatpackers are raking in historic profits. White House economic advisers recently said that the biggest meat-processing companies, using their market power in the highly consolidated U.S. market to drive up meat prices, have tripled their own net profit margins since the COVID-19 pandemic started.
Despite receiving huge amounts of public taxpayer dollars over the last two years, corporate Ag did little to expand their capabilities or streamline the process to address the ongoing calamity. They chose instead to offer stock buybacks and pay dividends. Recently these meat packing companies paid $1 billion in new dividends and stock buybacks. And that is on top of more than $3 billion paid to shareholders since the pandemic began.
We need our Congresspeople to actually represent us and pass laws and policies to rein in corporate control of the food industry.
For example, the bipartisan “American Beef Labeling Act” would require that meat be labeled where it was born, raised and processed. The “50/14 Spot Market Bill” would require large meatpackers to purchase 50% of their supply on the cash market and not own the livestock for more than 14 days before processing — this would help stop meatpackers from being able to manipulate the price of cattle. “The Food and Agribusiness Merger Moratorium and Antitrust Review Act” would stop mega-mergers of food and agribusiness companies.
Additionally, we need to strengthen and enforce the Packers and Stockyards Act, which was adopted to protect farmers and ranchers from the unjustly discriminatory and monopolistic practices we have today.
Darvin Bentlage is a fourth-generation cattle and grain farmer from Barton County, Missouri, a member of Missouri Rural Crisis Center and a regular contributor to the Missouri Independent, which first published this essay.