February 22, 2002
Reining In The Big Meat Packers Restoring Freedom and Fairness – At what cost?
By Mike Callicrate
The effects of banning big packer ownership of livestock should be insignificant to the market considering the number of livestock the packers claim they own. But I believe the costs to our livestock producers and consumers will be whatever the packers want them to be. Operating outside of the law and with impunity, the big packers have gained control over our markets. Price is arbitrarily set at a level at which packers can convince cattlemen, through the mental conditioning efforts of packer-influenced trade associations, university economists, market analysts, etc., to accept the price without starting a revolution. Through their unprecedented market power, the big packers are stealing record dollars from livestock producers, keeping much of the profit and passing even more on to their allied retail partners: Wal-Mart, Kroger, Safeway, and Albertsons.
Following the events of September 11th, packers and retailers looted producers and consumers by lowering prices to cattlemen 12%, while charging consumers 9% more. What will the packers do in response to a ban on their ownership of livestock, a very necessary first step legislative action to help stop their exploitation of producers and consumers? �
“It has been brought to such a high degree of concentration that it is dominated by few men. The big packers, so called, stand between hundreds of thousands of producers on one hand and millions of consumers on the other. They have their fingers on the pulse of both the producing and consuming markets and are in such a position of strategic advantage they have unrestrained power to manipulate both markets to their own advantage and to the disadvantage of over 99 percent of the people of the country. Such power is too great, Mr. President, to repose in the hands of any men.”
-These words were spoken on the floor of the U.S. Senate by Wyoming Senator John Kendrick in 1921
With the loss of competition, cattlemen have now lost over $400 per head of their share of the consumer beef dollar (non-value added, fresh retail beef – see attached chart) compared to 1975 when four-firm concentration was 36%. Today, the top four firms control over 80% of our nation’s steer and heifer slaughter. Tyson/IBP, the world’s largest packer, with their partner Wal-mart, the world’s largest food retailer, is positioned to control both the supply and demand of beef, pork, and poultry (Doug Ross, U.S Justice Department, sees no problem).
Banning big packer ownership of livestock, constraining the power of this monopoly, is absolutely necessary, but only one small step in restoring competition, innovation, and fairness to our livestock and meat industries. Much more needs to be done. Get ready for the most brutal fight of this century. It has already started with Tyson’s threats and Smithfield’s blackmailing and intimidation in South Dakota. Without citizen involvement, government oversight and regulation, the packers will get the final say, as they did with their reversal of the intent of mandatory price reporting. They will punish us with eight-cent hogs again, and fifty-cent cattle…however low our government allows the packers to take the markets. Packers, with the captive supply of their own livestock, profit with the lower livestock prices they dictate, because they don’t sell livestock, they buy livestock and sell meat.
There is no other alternative than legislation, an all out fight, when the market predator becomes more powerful than our Federal Government, as has this meat packer/retailer cartel! Without hardly a mention, these modern day robber barons have already cost our country many of our precious farmers, ranchers, cattle feeders, and communities.
Make no mistake, this is a choice of corporations vs. people, a fight for our basic freedom, for social justice, equal opportunity, and economic fairness. Fair competition is fundamental to our economic system and our democracy. Without fair markets we lose our freedom. What is our freedom and a diverse, dependable, high quality, and safe domestic food system worth?