“The greatest threat to any free society is the concentration of power and wealth into the hands of a few.” James Madison

Over the past five years, my team at Antimonopoly Counsel has investigated monopolization and the elimination of competition in every major industry in our food and agriculture system. Yesterday, I shared what we found with Democratic Senators at a roundtable discussion on food and household costs organized by Leader Schumer. I made three main points.

First, we no longer have free markets in the food supply chain. Either a single monopolist or a tight oligopoly controls each of the major industries involved in growing, processing, or distributing food in America. Four multinationals dominate the supply of seeds and pesticides for most major crops. Single firms monopolize each of the domestic markets for nitrogen, phosphate, and potassium fertilizers. One corporation wields monopoly power over new farm tractors. Five conglomerates share power over the nation’s meat and poultry supply. Four grain-trading giants have a similar power-sharing arrangement with respect to the processing of wheat, corn, and soybeans. Nearly all of the country’s fluid milk comes from just three companies, a super-majority of egg production is controlled by just five companies, and similar concentrations pervade the fruit-and-vegetable processing industries. Meanwhile, four national chains now capture nearly 70% of all grocery sales in America.

Second, these autocrats of trade — and the strategies they use to stay in power — are the primary drivers of today’s unaffordable food prices. For example, the seed and pesticide oligopoly led by Bayer has trapped grain farmers into dependency on a narrow set of glyphosate pesticides bundled with GMO seeds by creating “patent thickets” around key technologies and deploying predatory strategies to disable innovation by independent firms. As a result, over the past two decades, this oligopoly has charged skyrocketing prices for seed-and-pesticide bundles whose efficacy is declining and that, to add insult to injury, seem to give farmers cancer. Not to be outdone, the fertilizer monopolists have used their control over key mineral inputs and key distribution channels to muscle out rivals. As a result, they’ve been able to engineer chronic fertilizer shortages and keep fertilizer prices high for nearly two decades — giving them Apple-level profit margins of 30-40% on products they haven’t improved in over half a century. All of these additional costs to farmers ultimately increase prices for consumers.

And the abuses of power are only worse among processors and retailers. Since the 2000s, the meat and poultry oligopoly has repeatedly used coordinated plant shutdowns to push livestock prices down while keeping beef, pork, and chicken prices high. A similar story has played out in the egg industry, where a few dominant producers have used a mix of collusion and coercion to throttle industry output and maintain a near-chronic shortage of egg supplies for the past two decades. Meanwhile, the troika of fluid milk sellers have raised the price of bottled milk by roughly 150% since 1996, but kept the price of raw milk paid to dairy farmers in a near-permanent depression. And, of course, we cannot forget the grocery retail giants like Walmart, who — as a lawsuit brought by Lina Khan’s FTC and dropped by Trump showed — use their buying power to force suppliers to give their competitors higher prices, eliminating price-lowering competition from the market.

In short, the root cause of our food affordability crisis is that, across our food system, we’ve allowed central planning by robber barons to take the place of actual free enterprise. This brings me to my final point: We’ve been here before, and we know how to fix this fundamental problem. Like today, in the 1920s and early 1930s, a failure to enforce the antitrust laws had allowed corporate power to metastasize, leading to massive inflation even in the midst of economic depression. After examining the situation in a report to Congress, the FTC issued a stark warning: “Either this country is going down the road to collectivism,” the FTC said, “or it must stand and fight for competition as the protector of all that is embodied in free enterprise.”

America chose to fight. Over the next decade, Congress increased funding for the FTC and DOJ Antitrust Division six-fold, allowing the agencies to launch the greatest trustbusting campaign in the country’s history — breaking up hundreds of monopolies and cartels across the economy. Simultaneously, Congress acted directly to restructure critical industries through legislation — passing bills that broke up dominant firms, separated key segments of supply chains to prevent conflicts of interest, and provided financing for farmers’ cooperatives and small businesses to buy divested assets. The results did not take long to arrive. Within a decade, farmers could — for the first time in generations — buy their supplies from competitive markets and sell their crops into competitive markets. The mark-ups imposed on food products by processors, distributors, and retailers shrank significantly. Communities across the Heartland — large and small — flourished with dynamism as the iron grip of faraway corporations was lifted. A republic of free, independent enterprise was reborn.

This was how New Deal Democrats solved the affordability crisis of their era and, in the process, saved this country from snake-oil salesmen and would-be fascists. This is also how Democrats can solve the affordability crisis and save the country today. In short, I told the Senators, we already know what we need to do. We just need to do it.

Joe Maxwell, Farm Action, statement: 

Leader Schumer, Senators — thank you for the opportunity to share the lived experience of an American farmer.

Today in this country, 63 farmers a day are being forced off their land. Farmers are pleading with Congress for bailout payments for the fourth time in just over a year. At the same time, families are struggling with high food costs. And yet across agriculture and food sectors, dominant corporations are posting record profits.

The common thread is clear: extreme consolidation and lack of competition in our food system.

When I began farming in 1980, the top four beef packers controlled about 36% of the market. Today, they control roughly 85%.

In fertilizer, dozens of firms once competed. Today, just a few companies dominate nitrogen, phosphate, and potash — giving them the power to raise prices well beyond cost increases and beyond farmers’ ability to absorb.

We have repeatedly seen the consequences.

When egg prices surged more than 300% in 2022, corporate profits rose tenfold — even though production fell less than 7% and costs rose modestly. No competitors increased supply to discipline prices. That is not a competitive market.

When a single Kansas packing plant fire removed about 6% of capacity, dominant firms pushed cattle prices down for ranchers while raising beef prices for consumers — producing the largest farm-to-retail spread on record.

And when fertilizer prices jumped as much as 200%, margins at major firms increased five- to seven-fold. Fertilizer companies themselves acknowledge that a large share of their pricing is tied not to their costs, but to what farmers are paid. When farmers receive more, input prices rise to capture it.

We also need to confront the role of commodity checkoff programs. These programs were created to support farmers, but today a large share of mandatory farmer funds flows into marketing and policy influence that primarily benefits the processors and dominant firms. When trade and lobbying groups funded by farmer checkoff dollars walk these halls speaking for “farmers,” too often they are advancing the interests of the industry that buys from farmers — not the farmers themselves.

For more than four decades, both parties have allowed consolidation to deepen through weak antitrust enforcement and policy choices that favor scale over fairness. The result is a food system in which a handful of firms can raise prices for consumers while lowering prices for farmers — and face little constraint.

As a young economics major, I learned that markets keep prices fair only when competition exists. In much of agriculture today, that competitive discipline is gone.

The good news is this is not inevitable. It is the result of policy — and it can be changed by policy.

Leader Schumer, Senators — I see this roundtable as an opportunity to restore what farmers and families both need: real competition, fair markets, and affordable food. Thank you.

A summary and the full text of the bill follow:

Should Walmart, Tyson, Cargill, JBS, Marfrig and other monopolists be scourged and shorn?

Straying as far as possible from the intent of the Packers and Stockyards Act, Walmart is now a meatpacker – Should cattle producers be concerned? Should consumers?

Former Assistant Attorney General for the Antitrust Division, Jonathan Kanter, delivered powerful testimony at the recent Monopoly Busters field hearing in Seattle. Kanter said we’re living under the “Tyranny of the middlemen” (1:02 min), the courts have been eroded (1:31), and are refusing to enforce the law.”

Middlemen have been a concern for  sometime:

NATIONAL FARMERS UNION— OPPOSES PACKERS MERGER

December 14, 1922

WASHINGTON, D.C.—Stating that the National Farmers Union is emphatically opposed to the proposed merger of the large meat packing companies, the Washington office of the National Farmers Unfon, 1781 Eye St., N.Y., on Saturday made public a copy of a letter addressed to Attorney General Daugherty. The copy of the letter in part follows:

“The National Farmers Union, meeting in annual convention at Lychburg, Virginia, November 21-23, considered the question of the proposed packer merger and thereupon adopted the following resolution:

‘Whereas there is an effort being made to merge two of the great packing companies, therefore, be it resolved, that we express our disapproval of this attempted consolidation as a menace to agriculture.’

‘The National Farmers Union believes that this proposed merger If carried out would be contrary to the interests of the agricultural people: and we respectfully request that you do not permit It to be carried out.”

Senator George Norris, Chairman of the Committee on Agriculture and Forestry of the Senate and Representative Gilbert N. Baugen, Chairman of the Committee of Agriculture in the House are among the prominent members in Congress who have been asked to lend their influence, if this can be done in an appropriate manner, against the proposed packer merger.

“Bona fide farmers in Kansas oppose the merger,” said John Tromble, President af the Kansas Farmers Union, speaking for sixty thousand members of his organization, whose aggregate sales of livestock amount approximately to sixty million annually. Mr. Tromble further said “We most vigorously oppose any proposition which will give these meat packers further power over stock producers. For years we aided in the fight for adequate packer control legislation, believing that when industries had assumed such huge proportions and exercised their power in a way to adversely affect prices, it becomes the function of the government to exercise strong corrective control.

“I am very doubtful as to whether the law which was finally passed is exercising or will exercise the effective control which the meat producers believe is necessary for their protection. The fact is, I believe that the law should have teeth put in it, but even then, I am confident that our farmers would still be greatly opposed to any further consolidation of the packing industry.”

“This idea, that economies can be affected in the packing industry by a merger has been thoroughly exploded by the investigations which have been made by the Federal Trade Commission. I am sure that those whose only ground for favoring the proposed combination is that it will result in economical packing and distribution, will, if they have open minds, change their viewpoint when they have carefully evaluated reports made by the Federal Trade Commission.

The two preceding articles are from the archives of historian Tom Giessel, Larned, Kansas

More recently:

“Justice Roberts and his big business friendly court decided to hear the Anna Nicole Smith family feud case instead.”

Looking forward to the return of Jonathan Kanter and Lina Khan, as well as a new crop of better educated law students filling the judiciary.

See the following presentation to the Willamette University Animal Ag Law Class:

See full video of the hearing: From Farm to Kitchen Table: How Consolidation Spikes Food Prices | seattlechannel.org

“What we’re seeing is the tyranny of the middlemen.”
– Jonathan Kanter, former Assistant Attorney General for the Antitrust Division.

Congresswoman Jayapal opening statement

The video version of my testimony is edited for time. The full unedited statement follows:

Monopoly Busters Caucus Field Hearing

“From Farm to Kitchen Table: How Consolidation Spikes Food Prices”

Wednesday January 28, Seattle Washington

Good evening, Congresswoman Jayapal and members of Congress.

My name is Mike Callicrate. I’m a cattle and meat producer with operations in Kansas and Colorado. Thank you for the opportunity to discuss this important issue.

I’m here today because I believe due to decades of abusive market practices, lax antitrust enforcement, and growing monopoly control we’re entering the final stages of food system collapse.

A handful of multinational corporations control our food supply. Their hyper-extractive supply chains have gutted rural America, leaving our farm and ranch families bankrupt, and soil and water resources depleted and polluted.

In 1972, a local banker loaned me the money to buy my first cows. After weaning the calves, they were grown to feeder size and sold at auction to one of the many small feedlots in the region. The calf, feeder cattle, and finished live cattle markets were competitive and open to all producers. Farms were diversified, employing family members raising crops and livestock.

In 1978 I joined other local investors in building the first commercial feedyard in Cheyenne County, Kansas.  As manager, I arrived early to work, oftentimes meeting a cattle buyer sleeping in his car hoping to get the first look at our market ready cattle. There were as many as twenty regional meatpackers from Colorado, Nebraska, Kansas, Oklahoma, New Mexico, and Texas, willing to buy our cattle. There was dependable profitability in all sectors from farm and ranch to meatpacker, and retailer. Rural communities were thriving. The American Meat Institute reported the 1970 producer share of the consumer beef dollar at 82%.

IBP (now owned by Tyson) built the world’s largest beef plant in Finney County Kansas in 1980. Feedyards were thrilled to have one more buyer, but the smaller independent owner-operated regional plants, especially the Denver meatpackers, protested loudly, including in their 1979 Congressional testimony. Attorneys for Averch, Litvak, and Pepper Packing in Denver asked the Secretary of Agriculture to enforce the Packers and Stockyards Act, which was passed in 1921 to prevent loss of competition in cattle markets. They testified they were competitors in a highly competitive meatpacking business in a geographic area covering the eastern Front Range of Colorado and spreading into western Kansas, western Oklahoma and western Texas.

They testified, unless the secretary enforced the Act, irreparable damage would be done to them and others by virtue of IBP’s unlawful acts, including predatory pricing, market consolidation, and supplier control.

They asked for a cease-and-desist order against IBP preventing its use of those unlawful practices. Like today, requests for enforcement were ignored. In a few short years the Denver plants closed, and IBP continued what the Wall Street Journal referred to as the “Death March,” wiping out smaller competitors across the country.

As meat plants went out of business, feedyards struggled to sell their livestock to fewer and fewer buyers. Marketing windows narrowed and take-it-or-leave-it low bids became the norm. Arizona governor Bruce Babbit, in his 1988 run for President, branded IBP a “corporate outlaw.”

In 1988, I built my second new and improved feedyard. Loss of competition for finished cattle was becoming a bigger worry. Feedyards were fearful to speak out. Like in the game of musical chairs, they scrambled to align with IBP and the other big meatpackers through Alternative Marketing Agreements (AMAs) seeking relief from the misery of selling in a controlled market that only saw cattle as a cost to be reduced. AMA’s, including IBP’s Formula pricing model, gave the biggest feeders preferential treatment for providing market-depressing captive supplies – inventories of cattle used to leverage the cash market lower.

With the AMA captive supplier market access advantage, the big feedyards got bigger, while the more efficient, resilient, and low-cost farmer feeders went out of business. The cow-calf producer saw fewer buyers and lesser share of the consumer dollar in the increasingly concentrated marketplace.

After years of futile complaining and speaking out, feeling like nothing more than a wealth transfer agent in my role of feeding cattle for others, I joined in a 1996 federal lawsuit against IBP claiming anti-competitive practices we believed were illegal under the Packers and Stockyards Act. (A 2004 jury agreed.)

By 1998, I was down to one packer buyer – National Beef. I hadn’t seen the Cargill buyer, who lived thirty miles away in Goodland Kansas, for eleven years. The IBP buyer would stop occasionally for a cup of coffee and to offer what was referred to as a “bid not to buy,” a low-ball price so low he knew I would almost certainly reject it. The practice was used to condition desperate sellers to eventually accept a lower price from their designated buyer. It was clear the highly profitable big four packers, were cooperating, delegating territories, and pushing prices lower for cow-calf producers, while handing higher and higher margins to the big retailers who continued to charge higher prices unrelated to the price of cattle.

I had 14,000 cattle in my 12,000 head feedyard when I was informed by my only buyer, National Beef, that they were done buying from me.

I asked USDA Secretary of Agriculture, Dan Glickman, why he didn’t enforce the Packers and Stockyards Act? He responded, “In today’s global marketplace we need big companies that can do business globally.” He leaned on ConAgra to buy my existing cattle, but I would have no future market. The closing of my feedyard meant the loss of fifteen jobs, while eliminating a major buyer of local feedstuffs.

In 2000, considering my options, which didn’t include aligning with a big meatpacker, I decided to scale back and sell meat instead of live cattle.

Despite the Packers and Stockyards Act of 1921, a powerful antitrust law designed specifically to protect the producers of livestock, as well as other anti-monopoly laws, meatpackers continue to operate above the law. Overall beef demand is at record highs, the big four meatpackers control 80% of the steer and heifer market, while selling beef to an equally concentrated, and even more powerful, retail sector. Today, the producer share of the consumer dollar is fifty percent, down over 37% from 1970. Over half our cattle producers, stewards of our land and livestock, are out of business. Now 86,000 of our independent feedyards are gone, and, tragically, we’ve liquidated 9.3 million head of our wealth-creating mother cows. Tyson is shuttering plants in communities like Lexington, Nebraska and slowing down plants in Texas, as cattle and beef imports continue to rise.

In closing, it’s past time to “Break ‘Em Up,” including big meatpacking, big retail, and big food service, as we aggressively rebuild, protect, and support existing and new local regional food infrastructure.

Thank you for your leadership on this issue. I look forward to your questions.

The average November retail price for beef was $10.08 per pound. A 1,400 pound finished animal will produce around 42% retail cuts, or around 588 pounds of retail beef, not including offal. 588 pounds at $10.08 equals $5,927 per head. The big box retailer is making 43.8% or $2,596 per head, while the cattle producer who invests by far the most, along with taking nearly all the risk, gets 50%, down from 80% in 1970. It’s clear why we’ve lost half our ranchers and liquidated 10 million cows.

John, Coy, and Bill tell the story of today’s producer share of the monopolized meat industry. Only Congress can fix this threat to our food and national security.