Twenty-one years ago, in responding to the question of why producers were receiving so little for their livestock, Dr. John Helmuth (economist, meat industry expert, and longtime critic of meat industry consolidation) said, “There’s an economic term to describe this phenomenon: It’s called stealing.”
A fire in a slaughterhouse on August 9, 2019, in South West Kansas, turned the cattle and beef industry upside down. Live cattle plummeted and boxed beef prices skyrocketed, while meatpackers raked in massive profits. The so-called market that the big packers and retailers had been managing to their advantage for at least the last thirty years revealed that there is really no market at all, just a price – a price, that sellers and buyers will tolerate.
Today, price is not determined by supply and demand, or any semblance of competition, but by a new mechanism called, “Non-Market Price Discovery”.
Under the shared control of the big retailer/meatpacker cartel, some of the factors that now determine price are:
Market touts – Pushing the big lie, “It’s supply and demand!”, by Beef Checkoff-funded groups like NCBA, Cattle Fax, university professors, beef publications, etc.
Manipulation of the Futures markets to mentally condition sellers to accept lower prices.
Protests
Shaming
Hell-raising
Intimidation
Fear
Threats
Boycotts
Appeals to shareholders
Social media campaigns
Tomi Lahren and Corbitt Wall advocating for the cowboys
Excuse to break the cattle market further – Cattle futures were down the limit two days in a row.
The free water from the Ogallala Aquifer is disappearing.
The U.S. cattle herd continues to decline.
Many workers are illegal – Lack of immigration reform is making the hiring of low-cost refugee workers more difficult. Public support for foreign wars and abusive trade policy that displaces refugees to slaughterhouse jobs is becoming less popular.
Foreign beef is cheaper.
Memphis Meats – Tyson’s investment in fake meat competes with their existing and aging beef plant infrastructure.
Tyson can force cattle feeders to redirect cattle to other Tyson plants, increasing utilization of remaining facilities. Additional freight will be at cattle owners’ expense. Additional stress will be at the animals’ expense. With USDA’s new non-inspection rules, chain speeds can be increased at existing facilities and cleanup shifts reduced to absorb additional numbers.
If Elizabeth Warren’s vision for farming and food is implemented, a breakup of Big Food’s monopoly power is possible, and the cheap grain benefitting Big Food companies will become more expensive.
It’s a clear warning and lesson to cattle producers supporting R-CALF’s lawsuit against Tyson and the other big packers claiming ongoing anti-competitive practices.
A brochure by Elanco, one of the largest manufacturers of drugs for animals, urged farmers to give antibiotics to every pig in their herds, even as it told the public and policymakers it was aware of the hazards that the overuse of antibiotics poses to human health
Overuse of antibiotics in livestock has given rise to drug-resistant germs. Drugmakers say they want to be part of the solution. But a recent campaign urged farmers to administer the drugs to healthy animals daily.
Facing a surge in drug-resistant infections, the World Health Organization issued a plea to farmers two years ago: “Stop using antibiotics in healthy animals.”
But
at last year’s big swine industry trade show, the World Pork Expo in
Des Moines, one of the largest manufacturers of drugs for livestock was
pushing the opposite message.
“Don’t
wait for Pig Zero,” warned a poster featuring a giant picture of a pig
peeking through an enormous blue zero, at a booth run by the drugmaker
Elanco.
The company’s Pig Zero brochures
encouraged farmers to give antibiotics to every pig in their herds
rather than waiting to treat a disease outbreak caused by an unknown Patient Zero.
It was an appealing pitch for industrial farms, where crowded,
germ-prone conditions have led to increasing reliance on drug
interventions. The pamphlets also detailed how feeding pigs a daily regimen of two antibiotics would make them fatter and, as any farmer understands, a heavier pig is a more profitable pig.
The rise of
drug-resistant germs, caused by overuse of antibiotics, is one of the
world’s most nettlesome health predicaments. Excessive use of the
medicines has allowed germs to develop defenses against them, rendering a
growing number of drugs ineffective for people and animals. The
practices of livestock farmers, who for decades have used huge
quantities of the drugs deemed important to humans, have long been
viewed as one of the roots of the problem, but the role of the companies
that make the drugs has received less scrutiny.
Antibiotics
continue to be an important part of the business of companies like
Elanco, which spun off from Eli Lilly in September, its share price
soaring to $33 from $24. While Elanco is developing antibiotic
alternatives for animals, like vaccines and enzymes, the antibiotics
promoted by the Pig Zero campaign are exactly the kinds that global
public health officials are trying to curb. And Elanco is no outlier —
its rivals are also urging aggressive use of their own antibiotic cocktails.
“The
reality is that antibiotics and large-scale industrial farming really
grew up together,” said Dr. Gail Hansen, a former state epidemiologist
and state public health veterinarian in Kansas, who sits on advisory
boards addressing antibiotic resistance. She equated the problem with
climate change. “By the time people understand and believe it,” Dr.
Hansen said, “it may be too late.”
Elanco had already been put on notice about the drugs used in its Pig Zero push. In 2015, the Food and Drug Administration warned
Novartis Animal Health, which had been acquired by Elanco, that the
same antibiotic cocktail was “unsafe” and “misbranded,” because it was
being illegally marketed to fatten pigs, rather than to simply treat
disease. One of the drugs, tiamulin, has been a top seller for Elanco; the W.H.O. views it as medically important to humans, but American regulators do not.
Pig Zero trumpets the benefits of coupling tiamulin with
chlortetracycline, a drug made by Elanco’s competitors that both
American and international regulators consider medically important to humans.
In
an interview at Elanco’s headquarters outside Indianapolis, Jeffrey
Simmons, the chief executive, said the company had decided to change the
program’s marketing and to stop distributing the Pig Zero brochure
after The New York Times began asking questions about it.
“We’re trying to be stewards and leaders
at the same time,” said Mr. Simmons, adding that the brochure “wasn’t
misrepresentation, necessarily, relative to the label or the science, or
how a farmer would look at it.”
Dr. Shabbir Simjee,
Elanco’s chief medical officer, said drugs like those in the campaign
“would never be administered” in a herd “without some animals being
physically sick,” adding that “there would need to be some animals
showing clinical signs.”
He likened
treating a herd to caring for children in a nursery: “If one child gets
sniffles, you usually find that the whole class ends up with a cold, and
this is exactly the same principle.”
But
children almost certainly would not all be treated with preventive
antibiotics in such a situation, and many scientists believe animals
often should not be treated that way, either.
The
connection of overuse of antibiotics in livestock to human health takes
two paths: As bacteria develop defenses against drugs widely used in
animals, those defense mechanisms can spread to other bacteria that
infect humans; and, resistant germs are transmitted from livestock to
humans — through undercooked meat, farm-animal feces seeping into
waterways, waste lagoons that overflow after natural disasters like Hurricane Florence, or when farm workers and others come into contact with animals.
Bacteria are rebelling. They’re turning the tide against antibiotics by outsmarting our wonder drugs. This video explores the surprising reasons.
New F.D.A. regulations put in effect in the waning days of the Obama
administration prohibited farms from fattening livestock by lacing their
feed with medically important antibiotics. The new rules, along with
rising consumer demand for antibiotic-free meat, cut antibiotic use
significantly in 2017. But such drugs are still routinely given to pigs and cattle,
accounting for almost 80 percent of medically important livestock
antibiotics in the United States and nearly 5,000 tons of active
ingredient. Worldwide use is projected to keep rising sharply as growing
middle classes in places like China and Brazil demand more meat.
Ellen Silbergeld,
a professor at Johns Hopkins University, who has worked with the W.H.O.
on drug resistance, called the continuing promotion of the drugs by
pharmaceutical companies “very dangerous.”
“The
reason they’re doing it, though, is money, honey,” she added. “That’s
what it’s all about. That’s what it’s always been about.”
Now,
the industry has an important ally in Washington: President Trump, who
appointed one of Elanco’s former executives, Ted McKinney, as under
secretary of agriculture for trade and foreign agricultural affairs. Mr.
McKinney told international food safety regulators at a meeting last
summer in Rome that they were too singularly focused on consumers, at
the expense of pharmaceutical companies and research scientists working
to meet growing global demand for food. “We have got to rededicate a
focus on them as our customers,” he said.
‘Purpose-driven leader’
“We’re trying to be stewards and leaders at the same time,” Jeffrey Simmons, Elanco’s chief executive, said. Credit Whitten Sabbatini for The New York Times
In 2015, Mr.
Simmons, Elanco’s chief executive, joined a White House summit meeting
to pledge the company’s commitment to curbing antibiotic use.
Sylvia M. Burwell,
then the health and human services secretary, hailed the gathering as a
“hopefully historic step to protect the health of our nation.” Dr.
Thomas R. Frieden, the director of the Centers for Disease Control and
Prevention at the time, warned that antibiotic resistance “could result
in the medicine chest being empty when we need it most.”
Mr.
Simmons outlined Elanco’s lofty aims. “We’re going to create antibiotic
alternatives,” he said, adding, “We believe strongly that there are
solutions, there are pipelines, there are options.”
A farm boy from upstate New York, he was a
nearly 30-year veteran of Eli Lilly when Elanco spun off last year with
its 5,800 employees. His wife helps run a church food bank. Mr. Simmons
sits in an unassuming cubicle on Elanco’s campus.
He refers to himself as a “purpose-driven leader”
on a mission to fight hunger — echoing the megachurch founder Rick
Warren’s best-selling book “The Purpose-Driven Life,” which Mr. Simmons
has read and taken to heart. He uses social media to spread a sort of
protein-affordability gospel: “#Protein is a nutritious part of a balanced diet, but many don’t have access to it,” he once wrote on Twitter. “We can/must change this!”
While
microbiologists emphasize the urgency of fighting antibiotic
resistance, agrochemical industry veterans like Mr. Simmons say it must
be balanced against hunger and the world’s growing demand for food. He
often recounts his time as an executive in Brazil, when an anguished
guard in his gated community sought help feeding his two children.
“I’m not doing it for a paycheck or profits,” Mr. Simmons said in an interview. “Purpose has to override that.”
(He does get a paycheck, though. His total compensation was $5.4 million last year.)
Elanco’s booth at the World Pork Expo in Des Moines last year.
Financial disclosures for Elanco and its rival Zoetis, which spun off from Pfizer in 2013,
show the two companies sell roughly $2 billion annually in livestock
antibiotics. In Elanco’s case, antibiotic sales represent more than
one-third of its overall business. Some antibiotics, like monensin, a
top seller for Elanco, belong to a class not used in people, and thus
are not considered a resistance threat. But so-called shared-class
antibiotics, like chlortetracycline, are used in humans and animals,
creating risk for resistant infections.
Mr.
Simmons said that while Elanco “started as an antibiotic company,”
antibiotics that are medically important for people and used in
livestock feed now make up only 5 percent of its sales. “We’re not
building our company on that 5 percent,” he said. But the company has
also said that 12 percent of Elanco’s sales overall, including
antibiotics used in feed and administered in other ways, come from
medically important antibiotics.
While consumer
demand has made developing alternatives an industry imperative, few
companies are eager to cede ground on existing business.
Del
Holzer, who was the director of meat and poultry for Elanco’s global
industry food team from 2012 to 2017, said the company and its
competitors want to take positive steps and look good, to a point.
“They
want to do the right thing,” said Mr. Holzer, who now works for a
division of the agriculture giant Cargill, an Elanco competitor that
develops antibiotic alternatives. “But they say, ‘My bottom line is my
shareholders will be really pissed at me.’”
An antibiotic boom
Mr. Simmons, left, ringing the bell at the New York Stock Exchange last year. Credit Brendan McDermid/Reuters
When antibiotics
were first discovered more than a century ago, no one intended them for
animals. But then an American company, Lederle Laboratories, announced
in 1950 that chickens grew faster when they were fed chlortetracycline,
one of the drugs included in the Pig Zero campaign.
By
the early 1960s, almost half of livestock antibiotics were aimed at
making animals fatter. Drugs were marketed by the barrel; a 50-pound
chlortetracycline bag advertised in 1972 in The Herald, in Jasper, Ind., cost $9.25.
A
Purina Pig Chow ad that appeared in an Iowa newspaper in the early
1960s promised that it was “power packed with the potent vitamins,
minerals and anti-biotics pigs need for fast growth and good health.”
Another ad, in a Missouri paper, promoted “full-o-pep Pig Grower,” a
feed laced with antibiotics.
Yet scientists already had misgivings. In 1969, the Swann Committee report,
commissioned by the British Parliament, concluded the problem of
antibiotic resistance was significant. In 1976, a landmark study
published in Nature found that resistant E. coli strains could be passed
from chickens fed with antibiotics to other chickens, and then to farm
workers.
“It was pretty obvious to me
that the prudent thing to do would be to take low levels of antibiotics
out of animal feed,” said Dr. Hansen, the former state epidemiologist in
Kansas. As an F.D.A. employee in 1978, she gathered evidence for
Congress linking antibiotic use in livestock to resistant infections in
humans, but no action was taken.
“The science was there, the evidence was pretty easy,” she said. “It was a slam dunk.”
The pharmaceutical industry has pushed back. In 1997, researchers from Elanco were among those who authored a lengthy review
in the Journal of Applied Microbiology dismissing concerns about
antibiotic use in animals, writing, “We are confronted by a lack of
information, a wall of ignorance.”
Pharma companies kept a stranglehold on basic information. Various estimates by academics and public policy groups claim as much as 80 percent of American antibiotic sales go to livestock. But the industry has assailed such projections, calling some “agenda-driven junk science,” while simultaneously lobbying to block legislation requiring more disclosure of antibiotic use.
Mr. Simmons of Elanco has long played down livestock’s role in spreading resistant microbes to humans.
“The
most serious pathogens are not related to antibiotics used in food
animals,” he said. “Of the 18 major antibiotic-resistant threats that
the C.D.C. tracks, only two, campylobacter and nontyphoidal salmonella,
are associated with animals.”
But such oft-repeated statements, made even in Elanco’s securities filings, refer only to food-borne strains like antibiotic-resistant salmonella that can be found in raw chicken, for example, while ignoring the myriad ways pathogens can be transferred.
There is a growing body of research establishing links
between Clostridium difficile, or C. diff, in livestock and humans,
viewed by the C.D.C. as an urgent threat. Broad-spectrum antibiotics in
livestock provide “a survival advantage to antibiotic-resistant C.
difficile strains,”according to a 2018 study by Australian researchers. Similar studies exist for E. coli and methicillin-resistant Staphylococcus aureus, known as MRSA — the C.D.C. even lists different animals like cows, goats, sheep and deer that can pass E. coli to humans.
“We’ve
seen antibiotic-resistant bacteria that can leak into the environment
through water and dust, jump to the skin of farmers and swap genes with
other bacteria,” said Sarah Sorscher, deputy director of Regulatory
Affairs at the Center for Science in the Public Interest, an advocacy
group. “And that’s still just scratching the surface on the science. By
the time we understand the full magnitude of this threat, it may be too
late.”
There has been progress. In
2017, when the F.D.A. effectively banned the use of medically important
antibiotics to fatten livestock, their consumption fell by a third that year.
But
health experts say the regulations did not go far enough and see a
sleight of hand at work, with industry marketing now presenting routine
antibiotic use as a “proactive” necessity and weight gain an ancillary
benefit, as Elanco did in the Pig Zero marketing campaign.
Before
her death last year, Representative Louise M. Slaughter, a New York
Democrat who was the only microbiologist serving in Congress, lamented
the F.D.A.’s new rules as being riddled with loopholes.
“It’s useless,” she said of the regulations. “That’s why the industry’s supporting it.”
A move to alternatives
Aaron Schacht, head of research and development at Elanco. “Could we eliminate the need for broad-spectrum antibiotics?” he asked. “I think it’s possible.” Credit Whitten Sabbatini for The New York Times
A recent tour of Elanco’s labs at its Indiana headquarters swept past a virology lab and a large machine analyzing the DNA of thousands of hamster cells. Amid beakers and hardware, scientists in coats and protective glasses discussed their efforts to find alternatives to antibiotics.
Aaron Schacht, Elanco’s head of research and development, said those alternatives could include enhancing the animals’ own immune function, immunizing them against particular pathogens or reshaping their gut bacteria to favor the good ones.
“Could
we eliminate the need for broad-spectrum antibiotics? I think it’s
possible,” he said. “Now let’s let the science play out.”
But
change comes in fits and starts. Mr. Holzer, the former Elanco
official, said the drugmaker had created “country-specific websites”
where “there were certain things you couldn’t talk about in the U.S.,
but then talk about in Poland.”
“It’s a
bit of a hypocritical thing,” he added. “Elanco wants to lead the
charge on antibiotic use but then sells into these countries that could
become the biggest part of the problem. The idea is that as long as we
don’t lose antibiotics in country XYZ, we can take our hit in the U.S.,
and get the P.R. for it.”
Elanco
called Mr. Holzer’s comments “completely inaccurate.” Colleen Dekker, a
spokeswoman, said the company no longer included “growth promotion” —
fattening up animals — as an approved use for medically important
antibiotics worldwide, “regardless of what local regulations allow.” The
company was also intentionally decreasing its sales of such drugs, she
said, showing that “this is far more than a ‘P.R. effort.’”
But for Pig Zero, the company sees a problem only in the marketing. Going forward, Ms. Dekker said, such drugs would be sold “more from a health perspective” than from “a weight-gain perspective.” Mr. Simmons said of The Times’s inquiries, “We had a lot of dialogue about Pig Zero that probably we wouldn’t have had,” adding, “That’s good.”
The National Cattlemen’s Beef Association wants to keep consumers in the dark?
The NCBA is currently making a media and lobbying push to have
the United States Mexico Canada Agreement (USMCA) – better known as NAFTA-II – ratified
by Congress. In their press info NCBA
states: “USMCA maintains science-based trade standards while rejecting failed
policies of the past, like mandatory country-of-origin labeling.” This
statement reveals two of NCBA’s fixations because along with COOL, the NCBA is obsessed
with exports while denying any negative effects of beef and cattle imports.
In the NCBA world view only through more exports can cattle
producers prosper. They manipulate trade statistics to make it look as though
we export more beef than we import by conveniently not accounting for the
nearly two million head of live cattle imported from Canada and Mexico. The
NCBA then claims that exports increase beef’s value by $313.39 per head. I
don’t know how they made up that number, because I am certainly not making
$313.39 per head on cattle sales. It is clear that imported cattle are strategically
used by the beef packing cartel to manipulate the market, yet NCBA totally
ignores the fact that the market for cattle is neither transparent nor
competitive.
Many of us had high hopes that re-negotiating NAFTA would
result in a better trade agreement, but that does not seem to be the case. Corporations
still have every incentive to outsource their manufacturing. They can still
hide their profits in off-shore tax havens. Food safety standards are still not
equivalent. The workers still have no rights. Environmental pollution is still
happening. The World Trade Organization (WTO) can still overrule domestic laws,
and COOL is still not allowed. The upshot from the point of view of cattle
producers, is that beef and cattle imports still undermine our domestic market.
As for our Canadian neighbors, why do they remain dead set
against US consumers knowing that they are eating Canadian beef? I understand
that they think that they are protecting their interests, but COOL is the least
of their problems. Their real issue, which unfortunately affects us too, is
that Canadian cattle funnel into a captive supply system that results in lower
prices for both them and us. If our Canadian
colleagues would wake up, they would realize to what degree that they are being
used. What they should do is petition their government to insist that the US enforces
the Packers and Stockyards Act. Real market competition would cure a lot of
problems on both sides of the border.
I recently had a conversation with Congressman Greg
Gianforte and asked him if he would support a bill to restore COOL. He said no, because the cattle industry is
not in agreement over this issue. I
guess in his estimation, ninety percent of consumers and a majority of cattle
producers can be ignored because a handful of NCBA lobbyists say so. Mr. Gianforte is running to be our next governor. If he comes to your town, a good question
would be to ask him if he supports COOL. If enough people ask, maybe he will have
a change of heart.
Senator Tester is totally in favor of COOL. In fact, his
support for COOL was key both when it was first passed in the Montana
legislature in 2005 and later in Congress in 2008. If you see him tell him
thanks. As for Senator Daines, I don’t know his position. He is running to defend his seat, so it would
be a good time to get him on record.
This is a good question to ask all of the men and women
running for various national or state offices. The same advice for those of you
who might be reading this in another state.
Ask your candidates if it makes sense that all imported manufactured
items and foods carry a mandatory country of origin label except for pork and
beef. And if that doesn’t make sense to
them, remind them that NAFTA-II is not an improvement and COOL must be restored.
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“The money and political power of Wall Street has stolen America’s food system, bankrupted our farmers and ranchers, mined our soils, polluted our environment, wasted our precious water, and left us with expensive industrially produced food that makes us sick.” – Occupy Wall Street Food Day, December 2011
Industrial Agriculture and Urban Sprawl – A model of growth that’s made to fail.
Ranching Reboot Episode 4, Mike Callicrate “It’s time for a third revolution against monopolies”
Above: Ranching Reboot – Episode 4 – Mike Callicrate, owner of Ranch Foods Direct, sat down with us to talk about all manner of things from cattle markets, to public food spaces, the Bander, his feedlot and the pathway he built to market.
He shares valuable lessons learned from fighting against the commodity production system and how he’s built his own pathway to the consumer.
We talk about small community slaughter plants and public meat spaces and what that could look like going in to the future. We discuss environmental challenges, the food police and what it means when a Dollar General comes to town.
by John Munsell | Oct 11, 2011
Opinion Editor's Note: This is the first part in a series written by John Munsell of Miles City, MT, who explains how the small meat plant his family owned for 59 years ran afoul of USDA's meat inspection program. The events he writes about began a decade ago, but remain relevant today.
They say that confession is good for the soul. I've been involved in a series of ugly events since my plant in 2002 recalled 270 pounds of ground beef contaminated with E.coli O157:H7 and now want to admit the embarrassing truth for public review.
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