American Cattle Industry on the Brink – Ignoring the Obvious

Truth loses to big money and political power.

It’s called stealing. Cattle producers invest the most and receive the least. The producer share of the consumer beef dollar was around 65 to 70% in 1970 when markets were competitive. The producer share sank to 27% during the height of the pandemic, and now remains around 36%.

After the 1996 South Dakota Auction Markets meeting and South Dakota Governor’s Cattle Conference of the same year, and following the 2004 trial in Montgomery, Alabama where a jury found Tyson/IBP guilty of market manipulation, law enforcers and economists remained in denial and blind to the abusive power of highly concentrated markets. Even today, after many more years of cattle industry decline and loss of food sovereignty, law enforcers and economists, including many in our nation’s land grant colleges and universities, still remain oblivious. The historic plundering of our nation’s largest agricultural sector continues, as many of these so-called public servants remain firm in their support of the meatpacking monopoly.

“Without us negotiating price, you folks don’t get paid.”

In 2012, Gary Brester, Montana State University’s “big is better” economist, was asked about Mike Callicrate. Brester wrote, “How should I put this? Ok, how about the following: Callicrate is nuttier than a loon.” This was the “intellectual” response from a person living in Montana’s cattle country, sitting in a warm comfortable office, preparing our ranch kids to work for the same corporations that were forcing their parents out of business, while taking a taxpayer supported paycheck.

The following presentations of Jim Strain, Leo McDonnell, and myself are a look back when thousands of cattle operations were being destroyed by low prices, and government agencies, with the authority to stop the slaughter, were looking the other way. You will see our positions on the dangers of highly concentrated markets, as has the lack of antitrust law enforcement, remained consistent over the last twenty-five years.

Other presentations at the 1996 Auction Market conference included Herman Schumacher and Johnny Smith, representing the auction markets, and Chuck Schroeder and John Lacey, representing the National Cattlemen’s Beef Association (NCBA) and the big meatpacker/retailer cartel.

Jim Strain, “I think we are in vertical integration now, and I think you people are paying the price.”

Rancher, Leo McDonnell, “Something is Wrong.”

Cattle feeder, Mike Callicrate, “Without us negotiating price, you folks don’t get paid.”

See the full event playlist here.

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Breaking Points – Understanding the Challenges of the Meatpacking Monopoly

This is the best overview of the destructive meatpacking monopoly and the challenges in dealing with it.

The Biden administration will have to do a lot more, and soon.

USDA, FTC, and the Justice Department should file a flurry of enforcement actions now, from antitrust violations to deceptive and false labeling, pushing back the corporate predators. To ensure necessary reform, the appropriate agency should join the private actions currently working there way through the courts, providing funding, and any and all support to expedite, and without lax settlement agreements like in previous cases – and then adopt favorable policies to support, fund, and promote alternative local/regional food system development.

We can’t have competition without competitors. Break ‘Em Up!

Mike Callicrate

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American Cattle Industry is on the Brink – How did it happen?

It took a sales job and help from USDA

The year was 1996, the National Cattlemen’s Association had just become the National Cattlemen’s Beef Association (NCBA). The new entity included the large meatpackers and some of the biggest pharmaceutical companies in the world. In addition to being robbed by the meatpackers, and feeling sold-out and betrayed by NCA leadership, cattlemen were  furious their $80 million per year beef checkoff had been captured by the new group, with funds they were mandated to pay, now being used against them.

“The visionaries were rolling out their new “Long Range Plan,” designed to make cattle producers more like chicken farmers, and beef more like chicken.”

The visionaries were rolling out their new “Long Range Plan,” designed to make cattle producers more like chicken farmers, and beef more like chicken. After the plan was announced, I had a meeting with the new NCBA CEO, Chuck Schroeder. What I remember most about that meeting, in which I argued against the plan, was having an epic headache.

The above presentations by pitchmen, NCBA CEO, Chuck Schroeder, and NCBA President, John Lacey, were part of the June 2, 1996 Grassroots Cattle Producer’s Forum, sponsored by South Dakota Auction Markets, held in Ft. Pierre.

“The newly formed NCBA and USDA, with their gang of economists, were telling law makers, law enforcers, and producers, all was well.”

Cattlemen were stomping mad. The meatpackers were manipulating the markets, and the call for reform was growing much louder. Iowa Beef Processors (IBP), the largest of the big-four meatpackers, armed with their new market manipulating formula, had hammered the fed cattle market by over $200 per head in the spring of 1994, followed by many other wild bankrupting price swings into 1996. The newly formed NCBA and USDA, with their gang of economists, were telling law makers, law enforcers, and producers, all was well.

Thanks to the NCBA, and a captured and compliant USDA, the American cattle industry is a mere shadow of what it was 50 years ago. Rural Americans are living in poverty in dying communities, pastures and forests are burning for lack of stewardship with grazing livestock, and consumers are more and more dependent on foreign sources for food.

Note: See Herman Schumacher and Johnny Smith’s presentations here. Other speakers, including Leo McDonald, Jim Strain, and myself, will be posted next.

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Dear President Biden – Regarding Food System Reform

In regards to today’s Presidential panel on food system reform:

Building any new plants or expansion of existing plants is a fools game without a fair, open and competitive market. New facilities, and new investments in existing facilities, are already in trouble as consumers have returned to big box stores and big food service supplied independent, fast food, and chain restaurants. What school districts and institutions are buying local? Which government associated, or any kind of government influenced entities, from town, to city, to federal, are buying local? Break up the monopoly power first, invest in market access, and the plants will be built with very little, if any, government cash.

Why are the organizations claiming to represent family farmers and ranchers so averse to saying – there is no market?

An example of investing in reliable community-based market access for both producers and consumers:

Small food processors and family farm and ranch operations will have a fair chance of success if we build safe and profitable connections to consumers. Non-subsidized, and properly regulated, big-box stores would have little chance competing with public, or privately owned, shared-space community markets.

See: Let’s Meat – Challenges & opportunities in small and mid-scale meat and poultry processing

 

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Defending The Cattle Industry – Like our lives depend on it.

With IBP leading the way, the big meatpackers took from the cattle producer and feeder and gave to the big retailers and food service companies. The producer share of the consumer beef dollar dropped from nearly 70% in 1970 to the mid 30% range, for a current loss of nearly $1,500 per head at the farm and ranch gate.

Herman Schumacher and Johnny Smith were fearless defenders of fair, open, and competitive markets, risking everything in the battle to protect their auction market customer – the cattle producer.

The following presentations were part of the June 2, 1996 South Dakota Auction Markets Grassroots Cattle Producer’s Forum held in Ft. Pierre. The meatpackers were manipulating the markets. The fight for fair markets was raging. IBP as the price leader,  shocked the industry in the spring of 1994 with a $17/cwt. price drop, followed by other serious price declines into 1996. The USDA, and newly formed and checkoff-funded NCBA, along with their gang of meatpacker defending economists, were telling producers all was well.

Herman, Johnny, and other speakers of the day called BS. Over 1,000 very unhappy cattle producers were in the room.

Will today’s young leaders find inspiration from the words of Herman and Johnny and fight aggressively for real solutions, or will they compromise what’s left of the cattle industry, following the path of exploitation and modern day slavery like poultry and pork?

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