From Great American Prairie to Dried Up Industrial Wasteland

The first settlers came upon a vast grassland teaming with ruminant animals and wildlife. Rivers flowed from the mountain peaks to the west, bringing precious water and life to the prairie land, and filling one of the largest, and what has become one of the most important underground sources of water in the world – The Ogallala Aquifer.

Today, the Ogallala Aquifer is being mined far beyond its recharge rate by some of the largest and most predatory corporations in the world, filling their bank accounts, rewarding their shareholders, and leaving us with dry wells, broken communities, and blowing dirt.

The picture is too clear on this 29th day of May, 2023 – From the center of the Ogallala Aquifer at Garden City, Kansas, to the edge of the Aquifer west of Lamar, the land is suffering from poor stewardship and abusive extraction of resources.

From Kansas to Hope, Arizona, to California, why are we squandering this most precious resource?

Also see:
Salt, Water, and Soil – When it’s gone, they leave
Industrial Agriculture and Urban Sprawl – A Model of growth that’s made to fail.
The Current State of U.S. Agriculture and Food Infrastructure, and Solutions
VICE: Meathooked and End of Water

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Only a livestock and soil centered farm bill can repair the damage

“A nation that destroys its soil destroys itself”
– February 1937, President, Franklin D. Roosevelt

In Pictures: The legacy’s of industrial ag advocates Earl Butz, and authors of the 1996 Freedom to Farm policy, Senator Pat Roberts, and Professor Barry Flinchbaugh.

Current day on the eastern plains of Colorado and western Kansas

A reflection on the lasting legacy of 1970s USDA Secretary Earl Butz

Industrial agriculture lost one of its greatest champions last week: Earl “Rusty” Butz, secretary of the USDA under Nixon. Blustering, boisterous, and often vulgar, Butz lorded over the U.S. farm scene at a key period. He plunged a pitchfork into New Deal agricultural policies that sought to protect farmers from the big agribusiness companies whose […]

Tom Philpott

Published Feb 08, 2008

Industrial agriculture lost one of its greatest champions last week: Earl “Rusty” Butz, secretary of the USDA under Nixon.

Blustering, boisterous, and often vulgar, Butz lorded over the U.S. farm scene at a key period. He plunged a pitchfork into New Deal agricultural policies that sought to protect farmers from the big agribusiness companies whose interests he openly pushed.

He envisioned a hyper-efficient, centralized food system, one that could profitably and cheaply “feed the world” by manipulating (or “adding value to”) mountains of Midwestern corn and soy. Patron saint of the Fast Food Nation, Butz lived to see his dream realized. He died in his sleep, a quiet end for a man whose career shook the earth, causing untold acres to succumb to the plow. Yet his legacy still thrives, and will not likely die as gently as the man.

None of Your Agribusiness

Nixon plucked Butz out of Purdue’s agriculture department and planted him in the USDA in 1971. At the time, Butz served as a board member for several agribiz firms, including Ralston Purina, then a sprawling food conglomerate. He rejected criticism that these ties might compromise his performance as USDA chief. (The habit of stuffing the USDA with industry cronies has proven hard to break.)

But Butz did forcefully equate the interests of agribusiness with the national interest.

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And in 1971 as now, what agribusiness wanted was for farmers to plant lots and lots of corn and soy. In order to profitably mass-produce convenience fare for a growing middle class, the food industry needed unchecked access to cheap inputs.

But the ag policies of the day encouraged restraint. After the Great Depression — which featured the stunning confluence of huge grain surpluses, widespread hunger, and a tide of farm failures — the Roosevelt Administration put in place mechanisms to help farmers “manage supply.”

The program that Butz inherited worked like this: When farmers began to produce too much and prices began to fall, the government would pay farmers to leave some land fallow, with the goal of pushing prices up the following season. When prices threatened to go too high, the payments would end and the land would go back into cultivation.

The government would also buy excess grain from farmers and store it. In lean years — say, when drought struck — the government would release some of that stored grain, mitigating sudden price hikes. The overall goal was to stop prices from falling too low (hurting farmers) or jumping too high (squeezing consumers).

A side goal was to go easy on the land. The New Deal policymakers had seen how high-production agriculture could devastate land’s productivity. The “dust bowl” was a fresh memory.

For Butz and his agribusiness cronies, the program amounted to socialism — an intolerable check on farmers’ ability to plant and harvest as much as possible. By killing the “supply management” program, Butz would open a floodgate of cheap inputs from farms to food factories. Rather than use federal policy as a check on farm output, Butz saw it as a lever to maximize output.

To make the policy shift palatable in the Midwest, Butz needed to convince farmers that they weren’t risking a return to Depression-era conditions: vast overproduction, low prices, and foreclosures.

So he dangled the promise of foreign trade as a panacea. Don’t worry about overproduction, Butz told farmers on trips through the Midwest. Produce all you can, and we’ll the sell the surplus overseas!

Providing a grand example of how his vision might work, Butz engineered a massive grain sale to the Soviets in 1972. The move worked dramatically. The Soviets essentially bought up the U.S. grain reserve — just as a widespread drought hit the Midwest.

With the grain reserve hollowed out and the drought impeding the 1973 harvest, grain prices jumped and farmers scrambled to plant as much as they could to take advantage. Butz fanned their frenzy. “Plant fence row to fence row,” he exhorted from his bully pulpit. In other words, plow up and plant every bit of land you can get your tractor on. He brooked no dissent. “Get big or get out,” he routinely thundered.

Urged on by Butz and buoyed by high grain prices, millions of Midwestern farmers spent the 1970s taking on debt to buy more land, bigger and more complicated machines, new seed varieties, more fertilizers and pesticides, and generally producing as much as they possibly could.

Then, in the 1980s, the bubble burst. By that time, farms were cranking out much more than the market could bear, and prices fell accordingly. Meanwhile, interest rates had spiked, making all of those loans farmers had taken out in the ’70s into a paralyzing burden. Farm incomes plunged and tens of thousands of farms went under. Butz’s great policy change had given rise to the deepest rural crisis since the Depression.

Scorched Earth

Yet the food-production machine Butz created kept cranking. Surviving farms responded to low prices by planting more, hoping to make up on volume what they were losing on price. Failed farms got folded into larger operations at cut-rate prices. Throughout the Grain Belt, abandoned farmhouses were burned to the ground, cleared, and incorporated into ever-larger corn and soy fields. (For a blunt account of the farm-crisis period, see Osha Gray Davidson’s 1996 classic Broken Heartland: The Rise of America’s Rural Ghetto.)

While farmers scrambled to “get big or get out,” Butz’s beloved agribusiness giants cheered. Regaled with mountains of cut-rate corn, Archer Daniels Midland used its political muscle to rig up lucrative markets for high-fructose syrup and ethanol. In Iowa, bin-busting harvests gave rise to an explosion of massive concentrated-animal feedlot operations (CAFOs). An increasingly consolidated meat industry learned to transform cheap grain into cheap — but highly profitable — burgers, chops, and chicken nuggets.

It must have been satisfying for Butz to watch his vision come to life. But he endured personal humiliation along the way. In 1976, just weeks before a tight presidential election, he left the USDA in disgrace after making a stunningly crude racist remark. Five years later, he pled guilty to tax evasion and served a short stint in jail. But over the years — not unlike his political patron, Nixon — he returned to respectability. He died still holding an emeritus position at Purdue. (In a priceless scene in the excellent recent documentary King Corn, the narrators visit the aged Butz at his Purdue perch. I tried to interview him last fall for Grist’s Sow What? series; Purdue officials responded that he had grown too frail.)

And despite the rise of organic this and local that — a trend that annoyed Butz to no end — the old campaigner’s vision of maximum-production agriculture has become more entrenched then ever. He surely loved the way the biofuel boom has farmers worldwide scrambling to plant corn and soy and drench the earth with agrichemicals. Days after Butz died, the Wall Street Journal reported, “In the U.S., farmers … are razing old barns, ripping up sod and grassland, and uprooting fences — some in a routine attempt to improve land, others in an effort to make room for the grain boom.”

One Iowa land excavator told the Journal that farmers are “trying to squeeze everything they can” out of their land. Butz has passed on, but fence-row-to-fence-row agriculture — and its vast environmental footprint — lives.


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What does the biggest meatpacker in the world have over USDA?

Federal government purchasing shouldn’t discriminate against local/regional suppliers

Politico bribery article

So what does JBS, the biggest meatpacker in the world, have over USDA?

In 2019, as Brazilian meatpacker JBS was proving itself as a leading global criminal, instead of protecting American citizens by revoking JBS corporate charters and grants of inspection for its many criminal violations, our federal government funded JBS with lucrative preferential meat purchasing contracts – JBS a big winner in USDA trade war relief contracts.

Evidence of corruption

After 40 years of government service, why did the Food Safety Inspection Service (FSIS) Administrator, Al Almanza, leave the agency and go to work for JBS? Just prior to his new employment, Almanza allowed JBS’s rotten meat into our country for 90 days after Brazilian authorities made the world aware of the tainted shipments. The U.S. was the only developed country that didn’t cut off imports of JBS’s rotten meat. So, who had Almanza really worked for as he cashed his government checks? Meanwhile, as they had consistently done during Almanza’s tenure, USDA continued their confrontational and abusive treatment of small plant operators. Those plants were running safer, more humane, more sustainable, and far more resilient operations.

Al Almanza went to work for JBS after 40 years at USDA.

Almanza’s time at USDA saw a wildly-spinning revolving door from industry to agency and back again. It was a time when small USDA-inspected processing plants were driven out of business. The four largest multinational meat companies cooperated to eliminate competitors and monopolize the meat industry. Assisted by USDA, the big-four meatpackers gained control of 85% of our nation’s steer and heifer slaughter – the highest level of market concentration in history, nearly double compared to the Robber Baron era of a century ago.

Along with USDA, the Justice Department and the Federal Trade Commission have ignored anti-competitive practices, which drive independent meat plants and family farmers and ranchers out of business. Without a more direct connection to the end consumer, new and existing local/regional infrastructure cannot survive against the government-enabled big-food predators. Corporate control of our government agencies has enthroned big food, now ruling with complete authority over America’s food supply.

Prioritizing government purchasing in support of small processors and local/regional food systems would ensure the survival of new and existing small plants, along with future food security and a better climate, eventually restoring life in the rural communities that feed us.

Secretary Vilsack talks a good game with his descriptions of circular, regenerative, and promises of more sustainable economies, but the programs he mentions in the Politico article miss the mark. Local/regional meat processors, after stepping up and feeding us reliably during the pandemic, while the big plants failed, continue to die along with rural America.

The highest and best use of taxpayer money would be for the government to buy from the food system that represents our future food security, not from the companies that threaten it.

May, 2023 – Matthew Greco with My Health Forward
and Mike Callicrate, owner of Ranch Foods Direct

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Twenty-One Years Later Food Fight Continues Over Labeling – How many cows are in one burger?

Video by Tiffany Schilling – April, 2023

Seattle Times

Washington farmers have beef with imported meat: Food fight ensues over labeling

Thursday, April 25, 2002, 12:00 a.m. Pacific

By Lynda V. Mapes
Seattle Times staff reporter

OKANOGAN, Okanogan County — Kirk Kramer noses his dad’s 1949 Chevy pickup through a river of Black Angus, worrying aloud about beef prices, trade barriers and whether labeling meat by the country of its origin would give American farmers a better chance in the marketplace.

These days, globalization is even putting the squeeze on a guy with a 2-mile-long driveway.

Cheap foreign labor and environmental costs, trade barriers and a strong U.S. dollar have farmers and ranchers from Okanogan to Orlando struggling against a rising tide of food imports.

Given the opportunity, Kramer and independent family farmers like him are betting U.S. consumers will choose to buy American if Congress will impose mandatory new labeling laws on everything from pork chops to asparagus.

“… a single patty can contain meat from as many as 1,082 animals from the United States and abroad.”

“Most every widget and gadget in the store says where it is made,” said Kramer, who helps run his family’s nearly 9,000-acre ranch. “It seems like a no-brainer to me that people would like to know where their food comes from.”

The issue is coming to a head this week as a congressional conference committee works to find agreement on new rules for food labeling as part of the 2002 Farm Bill.

Packing houses, retailers and other food-industry giants are fighting country-of-origin labeling, which they say adds hassle and expense to a global food-production system focused on low cost and high efficiency.

“This has nothing to do with the right to know and everything about protectionists wanting to kill imports,” said Sara Lilygren from the American Meat Institute in Arlington, Va., which represents packing houses.

Cheap food imports are an important cog in what has become a global processing and distribution machine.

Nearly 42 percent of all fresh fruit consumed in the United States was imported in 2000, as was 14 percent of all fresh vegetables and melons, according to the U.S. Department of Agriculture.

A total of 16 percent of all beef consumed in the United States is imported, most of it by packing houses that blend low-cost imported beef with fat trimmings from higher-end domestic-beef cuts to produce that ubiquitous American meal, the fast-food burger.

“They just want to be able to get their meat anywhere they can, as cheaply as they can and get a bigger profit.”

“We are being killed by the hamburger market, and it is because of imported meat,” said Rod Haeberle, a third-generation rancher in Conconully, Okanogan County.

Haeberle is frank about why he wants country-of-origin labeling: “I am hoping it will put my foreign competitors out of business.”

The reason for the opposition by retailers and packing houses is simple, according to Kramer. “They just want to be able to get their meat anywhere they can, as cheaply as they can and get a bigger profit.”

But what impact a labeling law would have is disputed.

Exemptions already carved in even the more stringent version of the bill offered by Senate members mean as little as 3 percent of the beef sold in groceries would be labeled by country of origin.

That is because all food service, frozen and processed meat would be exempt from the labeling law. That knocks out most imported meat because the vast majority is beef imported for hamburger that finds its way to fast-food restaurants.

McDonald’s rocked the meat industry earlier this month with its announcement that it would begin buying Australian and New Zealand beef for burgers served in 400 of 13,000 restaurants, opening its door to beef imports for the first time. McDonald’s is by far the largest purchaser of U.S. beef, so the company’s so-called “test” purchase, destined for restaurants in the Southeast, set off alarms.

Hamburger is one of the thorniest aspects of the labeling debate.

There is no uniform tracing system in place now that would allow a retailer to know, in many cases, where the animals that make up the meat in his grocery case came from. In the case of hamburger, a single patty can contain meat from as many as 1,082 animals from the United States and abroad, according to a January 1998 study by researchers at the University of Colorado.

Opponents of labeling worry customers could be put off by disclosure of the international pedigree of some hamburger in their grocery.

“This is the farthest this has ever gotten. But I wouldn’t be surprised if the food industry doesn’t still get it stripped out.”

“What would the consumer impact be should a consumer walk into a retail store and pick up a product that says ‘Product of Canada, Mexico, and the United States’? ” asked Bryan Dierlam, director of legislative affairs for the National Cattlemen’s Beef Association, based in Washington, D.C.

“We want to have answers to that before this bill goes through.”

There is a lot at stake for ranchers like Kramer and Haeberle, 53, the third generation to work his 7,500-acre family ranch, a picturesque spread of grassland and sage sprinkled with bounding deer.

A post-and-beam barn at the heart of his operation, constructed nearly a century ago from giant timbers hand-hewn with a froe and secured with wooden pegs, is testimony to his family’s deep roots in Okanogan cattle country.

Haeberle’s herd of about 600 cattle will become the prime cuts of beef sold in steakhouses around the country and world. But as much as a quarter of his bottom line comes from the sale of cull cattle for hamburger — and he got more for the sale of those cattle 25 years ago than he does today.

Washington growers of asparagus, tree fruit, raspberries and other crops getting killed by imports also back a labeling law, which they say would boost the market for U.S. products.

“The ideal would be that somebody going into the store would have the same information buying an apple, a strawberry or a grape as they do a T-shirt,” said Chris Schlect, president of the Northwest Horticultural Council, which represents the tree-fruit industry in Washington, Oregon and Idaho.

Labeling produce has its own problems. Onions shed their skin, lettuce is wet and wholesalers often mix the produce they obtain before selling it to retailers, so the retailer doesn’t know for sure where every lemon, orange or mushroom they sell comes from.

Despite the obstacles, some meats and produce already are labeled on a voluntary basis. Labeling produce by country of origin is already the law in Florida, where the state has estimated the annual cost of its mandatory produce-labeling law to be less than $250,000 for the entire industry.

Washington state lawmakers passed a bill last session that requires all Washington produce to be labeled by retailers. But there is no penalty for noncompliance — Gov. Gary Locke stripped fines for failing to label out of the bill, in favor of a nonpunitive approach.

Some consumer advocates favor labeling of both meat and produce for public-health reasons.

April, 2023 – TRUTH in labeling must be a goal we strive for. Under current regulations, meat companies can import from a foreign country, but because it was butchered and packaged in the United States, they are allowed to put “Made in the USA” stickers on the package in deliberate efforts to deceive.

Caroline Smith De Waal, director of food safety for The Center for Science in the Public Interest, in Washington, D.C., said she sees no greater incidence of disease outbreaks from imported than domestic food. But when there is an outbreak of a food-borne illness, labeling would enable a quicker and more informed public-health and consumer response, De Waal said.

“The major benefit we get is a better ability to trace raw produce or meat that has been identified in a food-borne illness outbreak.”

Ultimately, the consumer group would like to see a larger labeling program that includes domestic products, with food traced all the way back to its farm of origin.

For now, just getting country of origin labeling will be a struggle, De Waal predicted.

“This is the farthest this has ever gotten. But I wouldn’t be surprised if the food industry doesn’t still get it stripped out.”

Lynda V. Mapes can be reached at 206-464-2736 or

Copyright © 2002 The Seattle Times Company

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Surviving in the land of the giants – A look back

Mike Callicrate says he was nearly driven out of business by a packing company that refused to buy cattle after he wrote an article criticizing the company.
(Karen Krien/Special to The Wichita Eagle)

Market dominance of huge agribusiness firms has some farmers crying foul; others say it’s a natural evolution of the industry

SUNDAY August 22, 1999

By Eric Palmer
Knight Ridder News Service

A vocal critic of the power of big business, Kansas feedlot operator Mike Callicrate believes his stand just about cost him his business this year. In January it had been weeks since his best customer, Farmland National Beef Packing, had bid on cattle.

Callicrate had written a livestock journal article criticizing National’s move into buying cattle on contracts. He thinks contracts depress cash prices at feedlots like his, a 12,000-head operation near St. Francis in northwest Kansas. He heard National was mad about the criticism.

“They went from buying most of our cattle to buying nothing,” Callicrate said. “It meant bankruptcy pretty damn quick.”

“Without question, they are exerting abusive market power,” said Callicrate

Callicrate notified the U.S. Department of Agriculture of his suspicions, then set about preparing to close his feedlot. The USDA filed a complaint against Farmland National for blacklisting Callicrate, a charge the company denies.

Callicrate says the government’s inquiries prompted other packers to take up the slack and he staved off closure, although he says he lost tens of thousands of dollars. He thinks the episode represents an abuse of market power being wielded regularly against small operations by agribusiness companies that have been merging into global giants.

“Without question, they are exerting abusive market power,” said Callicrate, who also is a party to a lawsuit over similar alleged practices against IBP, the nation’s largest meat packer. “We have companies today that are so large they are almost bulletproof. They have so much money and so much political power that it is almost impossible to get justice.”

Suspicion always has tinged the dealings between independent-spirited farmers and the pin-striped corporations to which they sell. That suspicion has magnified the last two years as mergers in the agriculture industry have left farmers with fewer buyers for their crops and livestock even as prices have been free falling and family farms have succumbed.

Large agribusiness companies deny they are acting anticompetitively. Agriculture economists say it is normal market forces, not monopolistic power, driving both the mergers of large companies and the collapse of commodity prices.

“It certainly begins to limit our choices,” said Mark Taddiken of the mergers. He raises soybeans, corn and milo near Clifton in north central Kansas. “Whether that’s bad or not I guess time will tell.”

Dealing with big business

Farmers such as Taddiken have little choice but to do business with the giants of agriculture. Huge agribusiness firms supply the seed, fertilizer, machinery and chemicals that farmers need to produce crops and livestock. They also buy most of what farmers produce.

Taddiken and thousands of other farmers have signed agreements with Monsanto Co. that would have been unheard of not long ago.

That’s not all bad, he said, because big companies have the resources to develop products that — when marketed fairly — can benefit the farmer and the company alike. In the past three years, Taddiken and thousands of other farmers have signed agreements with Monsanto Co. that would have been unheard of not long ago.

Through its biotechnology research, Monsanto developed soybean plants that are not killed by Roundup, a cheap and effective weed-killer also developed by Monsanto. It cuts his herbicide costs to about $15 an acre, rather than the $25 to $40 an acre he had been spending.

But there’s a catch: A farmer who grows the Roundup-ready beans signs a contract agreeing not to save any of the soybeans for replanting the next year, or for selling to other farmers for replanting. The agreement gives Monsanto the right to review farmers’ production and sales figures — information farmers typically share only with their banker.

The penalty for violating the terms of the contract can be stiff.

Taddiken has no regrets.

“You make an agreement and if you keep it, everything’s fine,” he said.

And he can’t argue with the results. Last week, as he took a visitor on a tour of his farm, a Roundup-ready field on one side of the road was lush with soybeans and nothing else. On the other side, in a field planted with a traditional variety, weeds were nearly as plentiful as soybeans.

“We’re controlling weeds that over the years have been difficult to control,” Taddiken said.

Still, as he looks at what’s happening in agriculture, he’s concerned about the future. Seed companies and crop protection companies are merging, he said, and they’re starting to get involved in processing farm products as well. That puts the companies in a powerful position to determine what is grown on farms and what will be done with the crops.

“You begin to wonder, down the road, whether we’ll just be contract growers,” Taddiken said. “I don’t think there’s a big evil plan out there against us. I just think that’s the way the industry’s headed.”

An industrial model

Many agriculture experts say the loss of family farms is the result of an agricultural system that is rapidly, and inevitably, becoming more industrialized.

They say farming is fast becoming about bigger farms, global markets, contracts with meatpackers to sell genetically specific livestock, contracts with grain companies to grow genetically specific crops, high-technology systems and competition from corporate farms.

The farmers who will survive this transition, they say, will be distinguished as much by their grasp of technology and their business acumen as by their skill at growing a healthy field of corn.

Some family farmers are themselves indirect players in the merger game as their farm cooperatives join forces to better compete.

In May, the nation’s two largest farm cooperatives — Farmland Industries of Kansas City, Mo., and Cenex-Harvest States of St. Paul, Minn. –announced plans to merge. It would create a system with about $17 billion in annual sales.

Those co-ops are owned by hundreds of local co-ops which, in turn, are owned by farmers.

If small farmers are to survive, their cooperatives must learn the lessons of global competition, said Harry Cleberg, chief executive of Farmland — which, incidentally, owns Farmland National Beef, the packing company Callicrate clashed with.

“Wal-Mart figured out a more effective way of delivering products from the manufacturer to the consumer. Those competitors who couldn’t adapt died off,” Cleberg said. “For a producer to be a player rather than a hired hand, so to speak, we must put together a cooperative that has a better, more cost-efficient, supply chain.”

Mergers in agribusiness have become as commonplace as those in banking or telecommunications. In recent years Monsanto merged with DeKalb Genetics Corp. in a $2.3 billion deal, then picked up a leading cotton seed producer for $1.9 billion.

Dupont spent $7.7 billion to buy seed company Pioneer Hi-Bred. Farm implement maker New Holland has offered $4.3 billion to buy competitor Case Corp.

Minnesota-based Cargill, the nation’s largest grain buyer, last month acquired the worldwide grain operations of Continental Grain Co., the second-largest. At an estimated $400 million, it was small compared to other mergers, but it bothered many farmers and got reaction from members of Congress.

The deal was approved by the U.S. Justice Department only after Cargill agreed to sell off elevators in areas where the department said Cargill would have too much market muscle.

The facts of the market

“If these companies become more efficient, and if we maintain competition, they should lower costs and the farmer benefits,” Flinchbaugh said.

The economics that have led to mergers are simple, explained Barry Flinchbaugh, an economist with Kansas State University. Bigger companies can lower their costs by producing more product in bigger facilities with fewer people. Where some farmers see conspiracies by big business to lower farm prices, he sees economics at work.

“If these companies become more efficient, and if we maintain competition, they should lower costs and the farmer benefits,” Flinchbaugh said.

Economists point to the fact that even as food companies have gotten bigger, U.S. consumers have spent a declining amount of their disposable income on food, 10.8 percent last year, down from more than 13 percent in 1981.

More of that food dollar is going to wholesalers and retailers, acknowledged Bill MacLeod, an attorney for the Grocery Manufacturers of America. The difference, MacLeod said, has to do with further processing of food.

“Especially ready-to-eat foods,” MacLeod said. “There is more labor and more expense now between the farmer and the consumer.”

U.S. agribusiness companies say the mergers reflect their need to get market position to compete with some of the largest companies in the world.

Frank Sims, president of Cargill’s North American Grain operations, said the merger with Continental was part of a restructuring of the food and agribusiness industries that is being mirrored at the farm level as they adapt to new trends.

“Producers are changing faster than we are. In terms of consolidation, all the data I see from USDA suggests that there is as much consolidation and restructuring on the farm,” he said.

Agribusiness companies are getting bigger, but so are farms. That has been the trend for at least 50 years, said Dick Gady, chief economist and vice president of public affairs for ConAgra in Omaha, the nation’s second-largest food company.

Gady said his company hates that the trend has raised suspicions among its customers.

“It bothers us that legislatures are villainizing agribusiness companies. It bothers us that our suppliers mistrust us,” Gady said. “I think higher prices and better markets would dissipate a lot of that, although not all.”

Let’s make a deal

About 18 months ago, Dale Whiteside and his sons made a decision that dramatically changed the way they farmed. It also put them among those undertaking one of the most controversial practices in agriculture, one that underscores farmers’ concerns about how corporations are changing their place in the world.

“We used to be totally independent. Now we grow and finish, but we don’t own the pigs.”

They decided to raise pigs on contract for Farmland Industries.

The Whitesides used to own sows that produced the pigs they would raise and sell at market for the best price they could get. Now, Farmland delivers 10-pound pigs to their farm and the rations to feed them. They will raise about 28,000 pigs this year and get paid per pig for taking care of them until they are ready to be slaughtered.

“We used to be totally independent. Now we grow and finish, but we don’t own the pigs,” Whiteside said from his farm near Chillicothe, Mo.

With the contract, they were able to get the financing to build the facilities they needed to compete with corporate hog farms, Whiteside said. It also saved them when hog prices last year dropped to their lowest point in decades.

“It wasn’t my druthers. I liked being independent, but the train was coming down the track,” Whiteside said. “It looked to me like it was time to share the risk with someone in packing.”

Vertical integration, where large corporations own a product from farm to plate, has become controversial on several levels. It has put companies in competition with the farmers they traditionally have bought from. It eliminates the need for much of the expertise of farmers. The companies determine the breeding of the animals and what they are fed.

There are advantages to the large meat processors being able to buy much of the livestock through contracts, said Gady of ConAgra.

“We like it because we can buy genetically the kind of animals we need to satisfy consumers,” Gady said. “We’ve got these monster plants we have got to fill up every day. It does help to have at least some of that contracted.”

It is not a one-way street, however, Gady explained.

“It gives producers a guaranteed market. It can reduce their pricing risk, which can help them get financing,” Gady said. It also pays producers a premium if they raise higher-quality animals, he said.

If any good comes out of low commodity prices, some farmers think, it will be that the hardship got Washington to pay attention to their concerns over concentration.

The Justice Department has agreed to look closer at concentration in agribusiness.

The Senate is considering legislation that would require meat packers nationally to report each day’s prices to the USDA.

The USDA, which has authority over consolidation in the meat packing industry, is again looking at that industry for signs of anti-competitive practices.

The USDA has investigated the situation several times but never found evidence that concentration has caused “tangible harm” to livestock producers.

“Meat packing has gotten more concentrated, leaving farmers with less bargaining power,” said U.S. Secretary of Agriculture Dan Glickman. “We are looking aggressively at how to get farmers more bargaining clout.”

A University of Missouri study showed that four large firms in each sector buy and slaughter four out of five beef cattle, three out of four sheep, three out of five hogs and half of all chickens.

The USDA has investigated the situation several times but never found evidence that concentration has caused “tangible harm” to livestock producers.

Regulators warn they cannot stop the transformation of agribusiness being driven by technology and globalization, but maybe they can mitigate some of the adverse effects.

“Some people are going out of business. That is the state of things,” said Keith Collins, chief economist for the USDA. “While we cannot intervene in markets, we can ensure fairness and competition.”

Contributing: Steve Painter of The Eagle, Lance Nixon in Aberdeen, S.D., Worth Wren in Fort Worth, Texas, Kevin Bonham in Grand Forks, N.D., and Lee Egerstrom in St. Paul, Minn.

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