Since 1980, 43% of our ranchers (land stewards) have left the land – St. Francis, Kansas 2021
April 1, 2010
Thirty-five years ago I learned that fences didn’t have to be new to be tight and straight, keeping our cattle in the pasture and our neighbors happy.
In 2004, a jury in Montgomery, Alabama, was presented with an actual section of broken-down fence in the courtroom. The fence symbolized the market; an important mechanism for establishing price. The market was meant to separate those of us that raised cattle from the companies that packed and processed beef. The market was meant to serve everyone equally, big and small.
Many were sounding the alarm about concentration and vertical integration.
The Packers and Stockyards Act of 1921 (P&S Act) was passed to protect producers. It led to the break-up of the big meat packer trust of that day. Congress intended to prevent any future reoccurrence. The law was clear in stating that if what a meatpacker did, so much as had even the effect of reducing competition, they were acting illegally. Eighty-three years later only a few rotted posts and broken wire remained from the once taut barrier to anticompetitive practices. The big packers had breached the fence. Eight years after filing the class action case, we were finally in court, facing the biggest meatpacker in the world – Tyson/IBP.
When I first arrived in St. Francis, Kansas in the early seventies, the town was full of life, from the humming feed mills to the grocery stores, to the country club. I was excited about my future in the cattle business. In 1978, I built the first feed yard in Cheyenne County with a group of local investors. More than fifteen families made a good living from the operation. Farmers had a new market for hay and grain, and local ranchers had the opportunity to add value to their calves, growing them to market weight for the many packers that bid weekly. The markets were working, our community was thriving.
By the late eighties, the packers had consolidated into four dominant firms. They were posting record profits. Contrary to the intent of the P&S Act, the biggest packers were vertically integrating and manipulating prices. The cattle business was looking more and more like the chicken business, in which farmers had already been impoverished by vertical integration. Our income was dropping as consumers paid more for beef. We sold off half our land to pay down the bank loan.
USDA was filling the agency with people from the same companies it was charged to regulate.
Many were sounding the alarm about concentration and vertical integration. The highly respected professor of law and economics, Dr. Neil Harl, was warning about the deadly combination of concentration and vertical integration. As early as 1965, Professor Harold F. Breimyer, in his book, Individual Freedom and the Economic Organization of Agriculture, said. “… vertical integration appears the greatest threat to individual freedom in agriculture … integration is not primarily a means to efficiency but an instrument of power …”
USDA was filling the agency with people from the same companies it was charged to regulate.
By the nineties, the packers, applying the same strategy used against chicken farmers, divided cattlemen and were vertically integrating. The biggest cattle feeders were being singled out and offered sweetheart deals, giving them many advantages over the smaller operators, who were going out of business. The aligned feeders expanded their operations into huge industrial feeding operations. Participation was by invitation only.
I asked USDA Secretary of Agriculture, Dan Glickman, why he didn’t enforce the P&S Act as intended by Congress. He responded that things are different now – we’re dealing in a global market and we needed big companies better able to do business globally.
Our community, our ranches, and our farms were being strip-mined in the interest of big business while our government beat the bigger-is-better deregulation drum.
By 2004, we had lost half our kids in the St. Francis schools, the feed mills had gone quiet, for sale signs lined our city streets, and one struggling grocery store remained. The brightest students were following their parent’s advice to leave the farm. They were looking for jobs with the very global corporations that had reduced us to near third-world status. Our community, our ranches, and our farms were being strip-mined in the interest of big business while our government beat the bigger-is-better deregulation drum.
We convinced the jury in Alabama that the packers had manipulated the markets to their advantage and to the disadvantage of cattlemen. The jury awarded us $1.28 billion in damages. Insulting both the jury and cattle producers, judge Strom quickly reversed the verdict in favor of Tyson/IBP and ordered the cattlemen to pay more than $70,000 for Tyson’s court costs. After a prolonged appeal, we stood before the U.S. Supreme Court asking that our case be heard. The justices refused, deciding instead to hear the Anna Nicole Smith family feud case.
Mandatory Price Reporting was passed, intending to improve price transparency, exposing the sweetheart deals.
Meanwhile, we were asking Congress for help. Country of Origin Labeling (COOL) was finally passed, intending to let consumers know where their beef came from, hoping to strengthen demand for U.S. beef. Mandatory Price Reporting was passed, intending to improve price transparency, exposing the sweetheart deals. Congress’s intent was reversed in rule-making when the packers helped USDA write the rules. Since 1980 we have lost one-thousand ranches per month – 41% have gone out of business and the bleeding continues.
The Obama administration has promised to rebuild rural America. The Justice Department and the USDA are now working together. The first of several Justice Department/USDA workshops was held recently in Ankeny, Iowa. It is in all our interests to restore the ability to feed ourselves. Let’s build a sturdy new fence of fair, open, and competitive markets – with many packers on one side, serving local and regional markets, and many independent producers on the other receiving a living income.
March 2021 – The 2010 Obama antitrust hearings found a severely broken marketplace, but nothing was done, essentially giving the big meatpackers the green light to continue their plunder. Now, eleven years later, still, nothing has been done about the destructive market power of Big Ag. Predictably, COVID proved the highly concentrated, fragile, and unsafe supply chains a failure and unable to feed us. What will Biden do?
Calling for States and State Attorney’s General for a full investigation of big meatpacker wrongdoing.
To help restore competition to our livestock markets and support a true investigation of the meatpacking cartel, please join us at Family Farm Action.
I understand what Mike has said and fully agree with him. Big ag is choking us out. Who will feed future generations? The P& S Act needs to be enforced for what it was intended!!!