Big Food Companies Sell Stolen Goods

Big Food Companies Sell Stolen Goods

Government cops look the other way

By Mike Callicrate

The following quote is inscribed above the portico of The United States Department of Agriculture:

“The husbandman, that laboreth, must first partake of the fruits.”
– The Second Epistle of St. Paul to Timothy

Herman Schumacher in front of the Federal Courthouse in Montgomery, Alabama attending the Pickett vs Tyson/IBP trial, January 2004

Last week while visiting legislative offices in Washington D.C., my friend Herman Schumacher laid the financial results of many months of hard work and investment on the table before us. A sick dark feeling came over me as I realized the devastating results of his feeding and caring for a group of over 300 cattle that recently sold to one of the big meat packers. The loss totaled more than $100,000. These cattle were from a place known for producing our best beef, beef from our nation’s highest quality cattle herds that produce the highest-priced retail beef in the world. Herman lives in the heart of farm and ranch country and for years has witnessed the destruction of his community, and the surrounding rural communities, due to a lack of sustainable income.

Economic and social decline has been the sad reality in global agriculture, long preceding the current global financial meltdown. What would St. Paul say about today’s big agribusiness companies who pillage the land and financially rape the husbandmen that care for it? Why are we standing idly by while livelihoods are stolen? Herman stands up for livestock producers, the husbandmen St. Paul spoke of, nature’s wealth creators, the foundation of our economy. They produce the food that sustains us without receiving so much as a scrap from the table. The big packers take part of the ranch equity along with every calf produced from the husbandmen’s cows and prairie grasses.

In 2001, shortly after Tyson Fresh Foods announced their intentions to buy IBP (Iowa Beef Processors – the biggest meatpacker in the world), I had a chance encounter with John Tyson, CEO of Tyson Foods, at a cattlemen’s gathering in San Antonio, TX. I introduced myself to Tyson as a plaintiff in a lawsuit against IBP. I explained that cattlemen were suing IBP for market manipulation based on the Packers and Stockyards Act of 1921. I went on to explain to Tyson that the lawsuit, if successful, could cost his company more than IBP’s total market capitalization. Tyson very indignantly responded, “You should be suing Wal-Mart (instead of IBP), they are the problem. They tell us what they will pay and we have no choice but to pay you less.” I responded, “I would sue Wal-Mart, but because of Illinois Brick (Supreme Court Opinion), I do not have standing in federal court. I have to sue you and you can sue Wal-Mart.”

Of course, the once-powerful IBP, who for at least the last twenty years unlawfully dictated prices to both sellers of livestock and retailers, now stands conquered, having lost negotiating power to the food retailers and distributors. Tyson certainly can’t be expected to bite the hand that feeds it. Wal-Mart is calling Tyson their partner, essentially giving Tyson preferential access to sell its beef, poultry, and pork in the meat cases of the biggest food retailer in the world.

Herman Schumacher has been in the forefront in the fight for open, fair, and competitive markets for many years, trusting that in America fairness and justice would eventually prevail. The following is an excerpt from Herman’s testimony delivered to the U.S. Senate, June 10, 1998.

“Laws designed to uphold our constitutional rights of freedom and equal treatment are not being enforced. One such law, the Packers and Stockyard Act of 1921(P&S Act), the only law legislated to protect producers and consumers from another meat monopoly like the one of the early 1900s, has not been enforced. Government has believed the lies of efficiencies of scale, economies of size, the global economy, etc. to justify this catastrophic destruction of the American beef industry.”

Eighty-eight years before South Dakota’s Herman Schumacher, Wyoming Senator John B. Kendrick said to his colleagues on the Senate floor, “It [the beef industry] 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 [cattle] 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.”
Senator Kendrick’s efforts resulted in the establishment of the 1921 Packers and Stockyards Act.

Today, injustice prevails. The P&S Act has only collected dust since the big packer breakup 100 years ago. From a corrupt justice system refusing to enforce the laws to patronizing legislators, well oiled by big foods’ lobbying dollars, a predatory marketplace has left us with far more concentration and consolidation than in the trust-busting days of President Teddy Roosevelt. Senator Kendrick would be astonished and saddened at today’s even stronger and more abusive packer, retail, and food service sector as they prey upon producers and consumers. Without the rules governing a fair market, prices at the farm and ranch gate continue to decline. It is easier to buy cattle cheaper from small independent and defenseless sellers of livestock than to sell meat higher to Wal-Mart, Kroger, and Safeway; and food distributors like Sysco and U.S. Foods. Because the USDA, President Lincoln’s so-called “peoples” food agency that was assigned the task of keeping the markets fair and competitive, has been sleeping on the beat, we now stand to lose what little is left of the “American beef industry” that Herman Schumacher described eleven years ago. Like the SEC, FDA, and other government agencies, the USDA has been captured by the companies they were mandated to regulate.

What would most price shoppers be expected to do when given the choice: Buy food that is priced at the full cost of production, with dollars fairly distributed back to the producer in a fair market system, or cheaper food that comes to them having been literally stolen? If only the human suffering, the lost communities and reduced stewardship of the land that comes with stolen food could be sensed in some way. Perhaps if we could tell by the look, smell or taste, we would choose not to buy it. Today, unknowing consumers pay record-high prices for food while those who invest, take the risk, and do the work, go broke. The big packers, retailers, and foodservice companies are stealing the fruits of the harvest, AND the USDA cops are driving the truck.

By the way, the Alabama jury awarded cattlemen $1.28 billion in damages in the lawsuit after hearing Tyson/IBP admit to violating the law in their manipulation of the cattle market. Trial Judge Lyle B. Strom, after failing to steal the case for Tyson/IBP with a flawed set of jury instructions, reversed the jury verdict. The case eventually made it to the U.S. Supreme Court. The Justices said they would only hear one of two cases before them – one being the cattlemen’s case for fair markets. They chose to hear the other case; the divorce case of Anna Nicole Smith. After eight years and enormous expense, cattlemen were denied justice. On that day, cattle producers, along with consumers, where tossed into the big packer/retailer meat grinder where we remain today. Jurors are still wondering why they reported for jury duty.

Herman Schumacher continues to fight for fairness in the marketplace from his home in Herreid, South Dakota. He also frequents our nation’s capital, hoping to be heard.


Mike Callicrate can be reached at 785-332-8218

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One Response to Big Food Companies Sell Stolen Goods

  1. Anonymous says:

    So glad to see these writings being sent out by Mike. Knew him many years ago and one of the clear thinkers in our industry. I remember a lot of the discussions going on inthe old days and many of our problems of today were around then. I hope people notice and join the fight!

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