A Food System Gone Wrong

A Food System Gone Wrong
By Mike Callicrate

Why don’t you sue Wal-Mart?
When I introduced myself as a plaintiff in the IBP antitrust lawsuit to John Tyson, Tyson Foods, at this years NCBA convention, he countered to me, “Why don’t you sue Wal-Mart.”  He said, “The retailer is the problem.” I told him, “I agree, your right, but because of the Illinois Brick ruling, preventing suit by an indirect seller, like myself, I have to sue you and you have to sue Wal-Mart.”For the first time in our history big retailers have become large enough to dictate terms to giant processors…Probably the main motivation behind the Tyson-IBP deal: to match power with and leverage Wal-Mart, now one of the top two U.S. food retailers.

Price Reporting – Keeping the unfairness and corruption a secret
Cattlemen, you’re being cheated – big meat packers and big retailers are stealing your money and your livelihoods. Wal-Mart, Kroger, Safeway, and Albertson’s tell the processor what they will pay. You, the farmer and rancher, get the leftovers. Do you really want to know how much and how fast this theft is occurring? If better price reporting tells you how much the packer is stealing, is there anything that you can do about it? Probably not. Not as long as our designated livestock market policeman, Ann Veneman, is Secretary of Agriculture, and not as long as meat packers control her and the USDA.

Last week, in the final hours of Friday’s business, cattle owners finally gave in and dumped their cattle for an outrageously low $70.00 per hundredweight. Record high retail beef prices justify $90 live cattle. To add insult to injury, the packers called for delivery of many of those cattle early Monday morning, proof of how short bought and needy they were. Of course, the blindfolded cash cattle sellers couldn’t have know it

Today, thanks to the power of the big meat packer big/retailer cartel, only the wealthy, well-organized packers and retailers have money and information. Uninformed, weak, and desperate sellers of live cattle only have feed bills, hot weather, and cattle that have to be sold.

Why are rural communities dying? It is called stealing!
Never before has there been so much money in the food system, and never before has so little of that money gone to the producer of the food – the farmer and rancher. Retailers are selling beef at record high prices with record high margins and profits. Packer-processors are also posting record margins and profits.

Contrary to the packer-retailer, and their supporting propaganda machine, the percentage loss of the consumer beef dollar to the producer at the ranch gate is due to market power, not value-added or extra services provided. USDA uses non value-added, raw choice beef for their comparisons. The farm and ranch gate has lost 20% of the consumer beef dollar at the same time as four-firm packer concentration has increased from 36% to over 80%. After subtracting the costs to convert boxed beef to retail ready product, it is clear that the big retailers are making over $500 per head profit while independent cattle feeders and ranchers go broke. Meat cutters are paid less per hour today than they were 20 years ago. Go to: meatpricespreads (http://www.ers.usda.gov/briefing/foodpricespreads).

Producers follow their livestock to slaughter
USDA is fully armed with this shocking and incriminating evidence, plus actual evidence of many antitrust violations including, collusion, price fixing, price discrimination, and retaliation. Yet USDA continues to follow its long history of endorsing a destructive centrally planned, industrialized agriculture in abdicating its duty of policing and protecting the market place. USDA, through their failure to act, instead promotes more concentration and control into fewer hands, enriching their agribusiness friends and destroying the rural landscape. History repeatedly reminds us that the single greatest threat to a free society is concentration of power and wealth into the hands of a few.

USDA Secretary Ann Veneman told an interviewer on the Kansas KSN television network this week, when asked about concentration, “There are many opportunities for producers to become part of the supply chain of the big companies.”  In other words, opportunities to become indentured slaves for her agribusiness bosses. By abdicating her duty to enforce the P&S Act, and continuing to keeping livestock prices and terms of contracts secret through the 3-60 rule, Secretary Veneman and others in government are facilitating the packer- processor-retailer cartel in dealing producers in both the pork and beef industries the same crushing death-blow already dealt enslaved poultry growers.

Beef packers continue to illegally give undue preferences to their captive supply providers, some in excess of $100 per head, explaining why the advantaged feeders continue to profit and expand at the same time as smaller independent feeders go out of business…Precisely the tactic used in the early integration of poultry.

Break up the concentration and consolidation – A food system gone wrong!
The meat packer-USDA cartel has snookered us at every turn, including stealing mandatory price reporting legislation, killing legislation to suspend big agribusiness mergers, defeating contract grower bill of rights laws, settling iron clad meat packer antitrust lawsuits with impunity (USDA vs. Farmland National), and misreporting boxed beef prices.

When we lose our free, open, and competitive markets, we lose our freedom. Rural communities, the source of a safe and sustainable food supply, die along with independent farmers and ranchers. All of America is losing with our food supply in the control of a few predatory, profit driven companies. It is time to break up the big multinational agribusiness companies beginning with the meat packers – Tyson/IBP, Cargill, and ConAgra. It is also time to apply the same criminal penalties to corporations and their executives that apply to individuals.

Whether you are a farmer, rancher, or consumer, you may want to ask yourself the question: Is your freedom worth fighting for, or would you and your children rather be serfs?

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