Now This: Author Denise Hearn on the Hidden Cause of U.S. Inequality

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posted January 2, 2019

“Capitalism without competition is not capitalism.” — The hidden reason economic inequality is on the rise is right in front our noses.

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USDA Enables Rustlers

by Gilles Stockton | January 2, 2019

Gilles Stockton

We brand our calves to prevent theft and it works pretty good, but because Department of Agriculture Secretary Purdue withdrew the GIPSA Rules, once those cattle reach a slaughter plant, rustling is condoned. Theft by packing plants may not be strictly legal but since there is nothing practical that a cattle owner can do about it, it comes to the same thing. Under President Obama, USDA went through the rule making process to clarify the Packers and Stockyards Act as to what kinds of actions by packing plants and poultry integrators is “undue and deceptive.” Underpaying because of inaccurate weights and wrong grades was definitely considered “undue and deceptive” under the new GIPSA Rule.

The Trump Administration withdrew the GIPSA Rule as fast as they could and now that a Federal Judge has agreed with them, cattle producers again do not have the right to sue packers for under weighing and mis-grading carcasses. The National Cattlemen’s Beef Association (NCBA) agrees with the withdrawal of the GIPSA Rule because according to them, if cattle feeders are allowed to sue beef packers for underpayment, the entire system of marketing fat cattle would fall apart.

The NCBA is right of course, if packers were required to bid on cattle and accurately pay for what they bought, the current system would fall apart. Captive supplies are what makes the current market for cattle work, and captive supply is designed to extract cattle from the people who raise and feed them as cheap as possible. It is perfectly true that this is what companies do, they strive to buy low and sell high. The problem is that when a segment of an industry becomes sufficiently concentrated, it no longer makes sense for them to actively compete against each other. Economic studies have clearly shown that the three dominate packing companies have every incentive to coordinate how they buy and sell their products – in this case fat cattle and beef.

The purpose of anti-trust laws is not to punish successful businesses but to insure competition. When an industry becomes too concentrated, competition is compromised which in turn distorts the market and the structure of that industry. We see this clearly in the loss of smaller independent cattle feeders. This is important for cow/calf producers because with fewer independent feeders and the growth of larger feedlots that are vertically integrated with packing firms, there is less competitive bidding on feeder calves. Witness this past fall’s feeder calf sales which were uniformly less than the cost of raising them.

USDA withdrew the GIPSA Rule in October of 2017. By December 2018 USDA announced that they were fining JBS USA for not accurately tracking, weighing, and grading dressed carcasses. This underpayment happened over a four-month period starting in December of 2017 through March of 2018. JBS was fined a whopping $50,000. This is a fine example of how our government looks after our interests and protects our backs. JBS probably stole more than $50,000 in just one hour of operation.

The Packers and Stockyards Act is a continual embarrassment to the packing concerns and their captive supply of cattlemen’s associations, docile federal employees, bought and paid for politicians, and agricultural economists. The Act clearly states that packers should not be engaged in deceptive practices but because their business model is based on deceptive practices, they are in constant violation of the
law. They get by year after year by conveniently ignoring this law, emasculating the regulators, and using litigation to block reforms to the cattle markets. It is interesting that the NCBA and the packers are in favor of litigation when its them doing the suing, but they oppose cattle producers being able to sue for accurate payments. Past statements by the packers and the NCBA are quite clear, should cattle feeders ever be allowed to sue beef packers the sky would fall.

We have a see saw situation going on. The Democrats, when they have power and after they have summoned up a little bit of courage attempt to reform the cattle market. Over the last two decades Democrats looked at forbidding captive supplies, passed Country of Origin Labeling, and enacted the GIPSA Rule. The Republicans, on the other hand, rescind these reforms as fast as they possibly can.

It is actually quite simple to restore function to this dysfunctional livestock market. All that is needed is to require that packers actually bid for their cattle supply. Individual cattle producers have a couple of choices about what to do about cleaning up the fraud in the cattle market. One of them is to continue to do what many cattlemen have been doing – which is not putting up much of a fuss at all. On the other hand they can insist that Country of Origin Labeling is reinstated and follow that up with restoring competitive markets in fat cattle.

Gilles Stockton
Grass Range, Montana

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Farmers Should Not be Bamboozled, 1897

—courtesy of Tom Giessel

The farmers should not be bamboozled into the idea that a better farm education, diversity of crops or experiments in agriculture are to be of much benefit. Let farmers take the robber economic system of this country by the throat and strangle it and they will find that they are already producing enough wealth to forever do away with poverty. Farmers’ institutes which ignore such questions are encouraged by the rich to distract attention for great reforms. The president of our own county institute, in his opening address, discouraged farmers from going into politics. Yet everybody knows the speaker is one of the worst dabblers in politics in the county. While his solemn face gave seriousness to the remark, he must have chuckled within himself when he knew he had marked the expression to be printed in italics by the republican papers. The Banner differs. We advise every farmer to go into politics. Wade in knee deep. –Harvey County Banner

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Building a Healthy, Humane, and Fair Food System – December 2018

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Colorado Springs Business Journal: Rancher-retailer has a beef with Big Food

Mike Callicrate both supplies local restaurants and fights for the interests of smaller farmers in what he calls a broken food system.

by Jeanne Davant | November 1, 2018

Raising and selling top-quality meats puts bread on Mike Callicrate’s table. But activism feeds his soul.

The owner of Ranch Foods Direct has been a passionate advocate for family farmers and small businesses in the courts and on Capitol Hill for almost 20 years.

“I fight abusive power,” said Callicrate, who lobbies, speaks and writes about the effects of corporate agriculture and industrial meat packers on small businesses.

“We have a totally broken food system that’s in the hands of just a few companies that cooperate rather than compete,” he said. “People who are really more aware of what’s going on in our system seek out places like us.”

Callicrate sells meat from the cattle, pigs and chickens he raises in St. Francis, Kan. Ranch Foods Direct also stocks locally grown produce, dishes such as soups cooked in the on-site kitchen and prepared foods sourced from regional farmers and food artisans. It’s a bit like a year-round farmers market.

The next six weeks are his busiest time, Callicrate said. He’s stocking Thanksgiving turkeys and ham, as well as prime rib, filet and other choice cuts for holiday meals.

“We produce the hams ourselves,” he said. “We raise our own pigs and smoke our hams right here in our kitchen. We’re getting ahead of that now.”

Callicrate hasn’t been able to find a local source for Thanksgiving turkeys — “there’s no place to slaughter them,” he said. “The very best poultry grower I know of anywhere is Gunthorp Farms in Indiana. We get our pasture-raised birds from there.”

The store also supplies local restaurants and food markets, including Drifter’s, Susie’s Westside Café and Mountain Mama Natural Foods.

Callicrate grew up in Evergreen, one of eight children in a family where everyone had to work. At 13, he started carrying packages and working behind the meat counter at the Thrifty Food Market. But what he really wanted to do was ride bulls.

“I made the ropes bull riders hang onto, and I was making a good living right out of high school,” he said.

After two years of college and rodeo riding at Sam Houston State in Huntsville, Texas, he joined the rodeo team at Lamar Community College. A professor there introduced him to agriculture and animal science, and he met the woman who became his wife.

He decided to complete his education at Colorado State University and then moved to St. Francis, where his wife’s family farmed and ranched.

Callicrate built a feedlot and, several years later changed his operation from an industrial approach to the regenerative methods he espouses today.

Regenerative agriculture precludes the use of pesticides and artificial fertilizers and focuses on improving and revitalizing soil. Animals are raised humanely, without the use of hormones or antibiotics, and slaughtered on-site. Nothing is wasted; some of the animal bones are used to make bone broth and soup stocks. Compost is produced from manure and the charred bones of slaughtered animals and turned back into the soil.

Mike Callicrate raises and processes the meats he sells. -Photo by Jeanne Davant

Callicrate started out selling meats wholesale. In 1996, after taking the lead in an antitrust lawsuit that aimed to end price fixing by large, monopolistic meat packers, “I was blackballed,” he said. “They wouldn’t buy from me.”

So he decided to sell his beef directly to customers through a retail store in Colorado Springs, where his animals were processed.

“We hauled them to G&C Packing Co. on the Westside,” he said.

Ranch Foods Direct opened in 2003 in a warehouse on El Paso Street. He supplied dining rooms from the now-closed Conway’s Red Top to the El Paso Club, as well as several school districts.

Callicrate moved the store to its present location three years ago after he lost his lease at the El Paso location. He also bought a large warehouse at Wooten Road and Platte Avenue where the carcasses are processed.

“The wholesale market is still terribly predatory,” he said. “Retail has kept us going. When I develop a relationship with a customer, they aren’t going anywhere. When you look at the way we produce beef and hogs, the prices are a bit higher, but our meat is so much better.”

The business also is supported by sales of the Callicrate bander, a humane, bloodless castration tool that Callicrate invented and sells through a company called No Bull Enterprises.

“It provides us the capital to invest in Ranch Foods Direct,” he said.

But Callicrate would prefer to talk about the small farmers and ranchers who are struggling in this agribusiness era.

“We’re walking more ranchers off their land every day,” he said. “Most of them don’t have a clue what happened. I try to represent and speak for them.”

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