Twenty-one years ago this week, the National Cattlemen’s Beef Association advised cattlemen all was well.
What was the real reason Tyson bought Iowa Beef Processors (IBP), the biggest beef packer in the world,?
“Tyson said he was attracted to IBP because he saw the company putting in place a lot of the things Tyson did 20 years ago.”
Did Tyson, having profitably captured the poultry supply chain, see the use of the IBP Formula as a better way to control livestock supplies without the expense and risk of owning the animals? Eliminating the capital intensive ownership of livestock, especially cattle, would show a big return on investment for Tyson shareholders. Owning the chickens and the feed, while indentured growers owned the growing facilities, the dead birds and the manure, wasn’t nearly as good a deal as what IBP had innovated with the Formula. The Formula pushed the huge investment in livestock, and the work and risk, onto ranchers and independent cattle feeders, and control of the inventory and priceless ability to manage and manipulate market prices to IBP, soon to be Tyson.
The 2001 NCBA Convention was my last. I introduced myself to John Tyson as a plaintiff in the IBP lawsuit. He asked, “What lawsuit?” I told him it was a private action based on the 1921 Packers and Stockyards Act, and if we were successful, the lawsuit could cost IBP more than it’s entire market capitalization. He said he knew all about the Packers and Stockyards Act. I responded, yes I know you do, and had it been properly enforced, you wouldn’t be where you are today in the chicken industry. He went on to blame Walmart and departed to address the convention:
Walmart was likely another very good reason for Tyson’s interest in IBP. Money was cheap, and with Tyson’s cozy and nearly exclusive supplier arrangement with Walmart, the opportunity to manage and control both the supply and demand for all three major meat categories, beef, pork and poultry, was an extraordinary opportunity. Since the 1996 merger that created NCBA, the organization had been a dependable ally of the big meatpackers and could be depended on to pacify producers.
Cattlemen today, even more than captured poultry growers, have seen their equity systematically transferred to the balance sheets of the big food cartel. Tyson and Walmart, with the help of NCBA, have led the way to today’s disaster – the most concentrated, consolidated, unfair, and fragile food system in history.
Can we really look for solutions to come out of this week’s NCBA/meatpacker convention?
To understand more about how we got here and why we should care listen to the Charter ranch story.