Mike Callicrate | No-Bull Food News

“We are a cost to be reduced, a resource to be extracted.” Mike Callicrate witnessed Big Ag’s exploitation of producers, workers, and rural communities, and was boxed out of the cattle market after taking Big Ag on. He knows we need a #FairFarmBill that takes power away from monopolistic meatpackers by supporting local production and consumption.

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.”

John Tyson claimed he liked IBP because it was becoming more like the chicken industry.

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 Formula is the equivalent of a nuclear warhead in the arsenal of captive supplies.”

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:

When the Omaha based Federal judge, Lyle E. Strom, reversed the jury’s verdict and the $1.28 billion dollar jury award in the Tyson/IBP case, we lost our last chance to fix what little was left of the cattle market.

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.

Buying the largest beef packer, IBP, while cooperating with the other biggest players in the the meat industry, has worked out very well for Tyson and the meat cartel, while leaving the rest of America and the world with little choice of where food will come from?

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.

Truth loses to big money and political power.

It’s called stealing. Cattle producers invest the most and receive the least. The producer share of the consumer beef dollar was around 65 to 70% in 1970 when markets were competitive. The producer share sank to 27% during the height of the pandemic, and now remains around 36%.

After the 1996 South Dakota Auction Markets meeting and South Dakota Governor’s Cattle Conference of the same year, and following the 2004 trial in Montgomery, Alabama where a jury found Tyson/IBP guilty of market manipulation, law enforcers and economists remained in denial and blind to the abusive power of highly concentrated markets. Even today, after many more years of cattle industry decline and loss of food sovereignty, law enforcers and economists, including many in our nation’s land grant colleges and universities, still remain oblivious. The historic plundering of our nation’s largest agricultural sector continues, as many of these so-called public servants remain firm in their support of the meatpacking monopoly.

“Without us negotiating price, you folks don’t get paid.”

In 2012, Gary Brester, Montana State University’s “big is better” economist, was asked about Mike Callicrate. Brester wrote, “How should I put this? Ok, how about the following: Callicrate is nuttier than a loon.” This was the “intellectual” response from a person living in Montana’s cattle country, sitting in a warm comfortable office, preparing our ranch kids to work for the same corporations that were forcing their parents out of business, while taking a taxpayer supported paycheck.

The following presentations of Jim Strain, Leo McDonnell, and myself are a look back when thousands of cattle operations were being destroyed by low prices, and government agencies, with the authority to stop the slaughter, were looking the other way. You will see our positions on the dangers of highly concentrated markets, as has the lack of antitrust law enforcement, remained consistent over the last twenty-five years.

Other presentations at the 1996 Auction Market conference included Herman Schumacher and Johnny Smith, representing the auction markets, and Chuck Schroeder and John Lacey, representing the National Cattlemen’s Beef Association (NCBA) and the big meatpacker/retailer cartel.

Jim Strain, “I think we are in vertical integration now, and I think you people are paying the price.”

Rancher, Leo McDonnell, “Something is Wrong.”

Cattle feeder, Mike Callicrate, “Without us negotiating price, you folks don’t get paid.”

See the full event playlist here.

This is the best overview of the destructive meatpacking monopoly and the challenges in dealing with it.

The Biden administration will have to do a lot more, and soon.

USDA, FTC, and the Justice Department should file a flurry of enforcement actions now, from antitrust violations to deceptive and false labeling, pushing back the corporate predators. To ensure necessary reform, the appropriate agency should join the private actions currently working there way through the courts, providing funding, and any and all support to expedite, and without lax settlement agreements like in previous cases – and then adopt favorable policies to support, fund, and promote alternative local/regional food system development.

We can’t have competition without competitors. Break ‘Em Up!

Mike Callicrate

It took a sales job and help from USDA

The year was 1996, the National Cattlemen’s Association had just become the National Cattlemen’s Beef Association (NCBA). The new entity included the large meatpackers and some of the biggest pharmaceutical companies in the world. In addition to being robbed by the meatpackers, and feeling sold-out and betrayed by NCA leadership, cattlemen were  furious their $80 million per year beef checkoff had been captured by the new group, with funds they were mandated to pay, now being used against them.

“The visionaries were rolling out their new “Long Range Plan,” designed to make cattle producers more like chicken farmers, and beef more like chicken.”

The visionaries were rolling out their new “Long Range Plan,” designed to make cattle producers more like chicken farmers, and beef more like chicken. After the plan was announced, I had a meeting with the new NCBA CEO, Chuck Schroeder. What I remember most about that meeting, in which I argued against the plan, was having an epic headache.

The above presentations by pitchmen, NCBA CEO, Chuck Schroeder, and NCBA President, John Lacey, were part of the June 2, 1996 Grassroots Cattle Producer’s Forum, sponsored by South Dakota Auction Markets, held in Ft. Pierre.

“The newly formed NCBA and USDA, with their gang of economists, were telling law makers, law enforcers, and producers, all was well.”

Cattlemen were stomping mad. The meatpackers were manipulating the markets, and the call for reform was growing much louder. Iowa Beef Processors (IBP), the largest of the big-four meatpackers, armed with their new market manipulating formula, had hammered the fed cattle market by over $200 per head in the spring of 1994, followed by many other wild bankrupting price swings into 1996. The newly formed NCBA and USDA, with their gang of economists, were telling law makers, law enforcers, and producers, all was well.

Thanks to the NCBA, and a captured and compliant USDA, the American cattle industry is a mere shadow of what it was 50 years ago. Rural Americans are living in poverty in dying communities, pastures and forests are burning for lack of stewardship with grazing livestock, and consumers are more and more dependent on foreign sources for food.

Note: See Herman Schumacher and Johnny Smith’s presentations here. Other speakers, including Leo McDonald, Jim Strain, and myself, will be posted next.