Today, independent feeders are losing around $300 per head as consumers pay some of the highest prices in history. Big packers, who cooperate rather than compete, are harvesting both cattle and ranchers with their price-fixing monopoly power, while feeding big retailers and food service companies fat profit margins. Despite rising demand from a growing population, U.S. cowherd numbers are now the lowest in 60 years. We continue to lose more of our domestic market to imports. The big packers have destroyed the finished cattle market, and now are in the final stages of eliminating competition for feeder cattle and calves as the last independent feeders and auction markets are put out of business.
Meanwhile, the National Cattlemen’s Beef Association having betrayed independent producers in their 1996 merger with the big packers and the National Livestock and Meat Board, continues to divert hundreds of millions of beef checkoff dollars. Dollars that have shifted from promoting U.S. beef to facilitating the death march of vertical integration, further industrializing (A system based on so-called efficiency and profit that disconnects owners from land and livestock.) a government-subsidized, centrally-planned, high-risk, and dangerous food system.
March 22, 2010
Stop the strip-mining of rural America
Federal action needed to preserve domestic food producers, infrastructure
By Mike Callicrate
The last thirty years have been tough times for independent livestock producers.
For decades, in addition to the hard work of keeping our farm and ranch operations running each day, we have literally been in a fight for our lives and for the life of our industry.
My place in the production process came after the cattle left the ranch, at the final step before the packinghouse, where cattle are grown to around 1,250 pounds. This part of the production chain is a bottleneck. The packing industry is the point at which the industry is most concentrated. With four packers controlling over 85% of the market, few choices exist for selling cattle. It was my responsibility to get the highest price possible for the cattle I fed; instead, I felt complicit and guilty in a massive transfer of wealth from farmers and ranchers to the processing and distribution segments of the business.
Cattlemen accept the things they can’t control, like winter blizzards and droughts. They assume the risks of volatile grain and cattle markets. But over the years, they’ve become helpless price-takers to a handful of highly concentrated meat packers, while consumers pay record high retail prices. Producers, who invest far more in capital, land, and labor than the processors, distributors and retail, receive a lesser share of the food dollar.
We have lost over 40% of our cattle producers, 90% of our hog producers, and 80% of our dairy operations in the last thirty years, along with most of our small to medium-sized packers and processors – victims of an unfair marketplace that demands excessive profits instead of distributing fair returns to the rest of the production chain. An economic and social decline has ensued in rural America. Take the example of St. Francis, Kansas, which now has half of the number of kids in its school compared to 30 years ago.
Tragically, once prosperous rural communities have been “strip-mined” by unregulated big business. This administration has promised to rebuild rural America, our source of good food and wealth creation. The Justice Department and USDA recently held the first of several workshops in Ankeny, Iowa, showing a renewed interest in antitrust law enforcement, an important first step in restoring a competitive marketplace. However, this is a far bigger task than most people realize. Our processing and distribution infrastructure has been dismantled, and — once lost — is extremely difficult and costly to resurrect.
I, along with many other farmers and ranchers, have fought the consolidation and concentration of the big meat-packers through public and private legal action and legislative efforts, all to no avail.
During the last thirty years, the traditional family farm food system that has fed America both nutritionally and financially has been displaced by an extractive and exploitative industrial system. This is the same system capable of rapidly spreading food borne illnesses with the speed of assembly line style processing and the efficiency of national food service distribution. Excessive profits come before good food, healthy people, and our national interests. We are now a net food importer depending on arriving ships and trucks from somewhere else, for something to eat. How secure is a nation unable to feed itself?
Ten years ago, I decided to downsize and reinvent my cattle operation in Northwest Kansas and attempt to market my beef directly to consumers. What I found was little or no market access outside the corporately controlled food system. Direct producer-to-consumer sales represent very low volume. Farmers’ markets are great, but they can’t adequately serve those who produce on a scale sufficient for a mid-western farmer or western rancher to make a living. Historic levels of corporate concentration stand like a fortress, impenetrable to naive new entrants who too often forfeit their life savings plus all they could borrow.
USDA’s “Know Your Farmer, Know Your Food” initiative combined with aggressive antitrust enforcement has great potential in laying the foundation for rebuilding thriving communities. Elevating the importance of eating good food, from people we know, leads to better health, a deeper respect for food animals, healthier soils, and a better environment. It would be great if more independent restaurants and food markets could distinguish themselves by connecting directly to nearby family farms. From community centers to schools, new kitchens could be designed for preparing real food.
Antitrust law enforcement will provide the foundation for rebuilding both rural and urban communities. Putting responsible limits on industrial food production is also necessary. Nurturing a new and better food system has become absolutely critical to the health and well-being of our nation.
Mike Callicrate is an independent cattle producer from St. Francis, Kansas, marketing his beef through his company, Ranch Foods Direct, in Colorado Springs, Colorado.