Australian Livestock producers are suffering the same devastating effects of corporate concentration, consolidation, and loss of fair, open and competitive markets that have driven families from the land in the US.
The following article originally appeared on TradeReform.org.
The following is a transcript of a YouTube video. It’s well worth listening to!
I’m a graduating senior, and I’m not worried about the economy or jobs.
It’s all much simpler than we’re being told. So let’s put our political differences aside, have some fun and get some answers to what I call “Questions.”
Like: Where does money come from?
When our country was wealthy, it was because we had the most factories and made the most stuff. Seriously. Agriculture and natural resources also contributed; but, by far, the vast wealth of America was created by American manufacturing.
Curiously, a lot of economic activities grab existing wealth, but don’t actually create any new wealth. Banking and finance, for example, do not create wealth. Services–however necessary–do not create wealth.
Let’s say you and I wash each other’s cars and charge each other $10. We’re working and earning income; the government would include our $20 in its official reports; but we’re not actually adding anything to the economy. But what if we take raw steel and rubber and glass and physical labor, and we build those cars from scratch, and then sell them? When we make things, we create wealth. This means more opportunities, more jobs, more of everything–everything–as long as we keep manufacturing.
Next question: America used to be the land of opportunity. What happened?
Big Business spends big money on American politics. Why? Because it buys influence. This worked OK when Big Business was still American: American owners, American factories, American workers. But then “globalization” caught on. Sounds cool: The Global Economy. But have you noticed that, here in America, the rich are getting richer, the poor are getting poorer, and the middle class is starting to disappear altogether? What “globalization” really means is that American-based multinational corporations are free to search the globe for the cheapest means of production. Then they close their American factories and fire their American workers.
This is tempting for publicly traded multinationals. They can increase their profits, their Wall Street performance, their executive bonuses; and at the same time give their customers lower prices.
And just think: they can accomplish all of this simply by firing American workers and shutting down American production.
Whoa! Isn’t that the same as destroying America’s source of wealth?
Our leaders used to be on our side. Back when England was a serious economic competitor, Abraham Lincoln said: “If we purchase a ton of steel rails from England for twenty dollars, then we have the rails and England the money. But if we buy a ton of steel rails from an American for twenty-five dollars, then America has the rails and the money both.”
Can you imagine any President saying that today? No way. The multinationals that control our politics would never allow it.
And so the big question: What can we do?
A lot, because you and I have the real power. American consumers are 70% of the entire US economy, and we can turn it around any time we choose.
Suppose every American simply reallocated 1 dollar per day, spending 1 dollar less on foreign-made goods, and 1 dollar more on American-made goods. After a year, we’d have 110 billion dollars, which could mean more than 2 million new jobs paying $50,000 per year.
Other factors are involved–costs, profits, US vs. foreign ownership–but the principle stays true, so let’s keep this simple and make our point. Even one dollar per day can make a big difference.
Reallocate ten dollars per person per day–from foreign to American-made goods–and in a year we’d have 1.1 trillion dollars, or potentially more than 20 million new jobs paying $50,000 per year.
Why stop there?
Financial crisis solved. Unemployment solved. Our future: safe, secure, and back in our own hands.
Like I said, it’s much simpler than we’re being told.
Maybe we’ve been listening to the wrong people.
Which reminds me: Corporations manufacturing in foreign countries? Don’t buy their stock. Why invest in them when they don’t invest in you?
Thanks for listening. Google “American-made goods.” And have a great future.
Did the Inspector General’s office really give the “Cow Tax” and its myriad of questionable expenditures a squeaky clean bill of health?
Not privileged to read the official I.G. or U.S.D.A. public release, I only heard the N.C.B.A. and their bought medias’ news blasts. Their ecstatic pronouncements of rebarbative, unreliable, polyglot; painting confusedly in every direction and containing an appalling amount of verbosity, was just too much for an old rancher to comprehend.
How could a private audit of a miniscule amount of records discover $300,000 of misspent Cow Tax, while and in-house audit discovers nothing amiss?
Perhaps the worst fraud, in my opinion, is when Beef Board members, who are also a member of N.C.B.A. fail to recuse themselves when voting to award the preponderance of Cow Tax funds to the N.C.B.A.
Isn’t that a clear ethical and moral conflict of interest?
Sincerely,
Stephen Anderson
27610 Poor Farm Road
Alma, Kansas 66401
785-765-3758
Grade and yield buying used to be called “Grade and Steal” by most cattlemen. Today, it’s called Value-Based Marketing by the big packers and their cheerleaders, like Certified Angus Beef’s (CAB) Miranda Reiman. In her March 4th article, “Value-based cattle marketing dominates”, Reiman attempts to mentally condition Angus breeders and other cattlemen to accept their fate in Big Food’s supply chain where performance enhancing drugs, added flavorings, Pink Slime, various pre-digestion methods, and meat recalls, do more to damage demand than CAB quality can possibly do to help it.
“The old selling-them-live method has given way to formula sales. This is a clear signal the industry is moving away from pricing on averages, and instead pricing cattle on their individual merits.”
– Mark McCully, Assistant VP for Certified Angus Beef.
Cattle feeders once knew better than to let the packer decide what their cattle were worth after the hide was removed. It was just plain bad business not to negotiate the price. Economics professor, Dr. John Helmuth once said, “Somewhere between when a calf is born and the steak hits the plate, price has to be discussed”. Not known for their benevolence, the packer, admittedly, always wants to pay the lowest price possible. Giving the packer the ability to solely determine the value was considered foolish.
Those born after 1975 (Miranda Reiman) have likely not participated in a competitive market for fat cattle. By the spring of 1994, the big meat packers proved they had essentially eliminated competition for live (fat) cattle. IBP, following the advice of the Boston Consulting Group, had decided in the late 1970’s that it was more profitable to cooperate than compete with the other very large packers. Together, the biggest packers systematically eliminated most of the smaller independent regional packing companies, drastically reducing competition. Additionally, they were feeding more of their own cattle and making preferential pricing and exclusive market access deals with the biggest feeders for additional large volumes of cattle that they didn’t have to bid on. Armed with enough captive supply cattle to stay out of the cash market for an extended period, the packers dropped the price of fat cattle $17 per cwt. in six weeks – a loss in value of around $200 per head. Over a thousand angry cattlemen packed the Holiday Inn in Omaha, Nebraska. The packers got the message. The market recovered about $12 per cwt. right away. The packers learned an important lesson – without competition, the market, and people’s perceptions, would have to be managed.
“He is a merchant, the balances of deceit are in his hand: he loveth to oppress.”
– Hosea 12
From deep in the meat packers’ pockets, the economists, market touts, and those receiving preferential treatment, bleated all kinds of phony excuses for the price drop – from ‘supply and demand’, to the standard ‘too much chicken and pork’, and, of course, cattle feeders were poor marketers. Dr. Helmuth’s explanation was simple and accurate, “There’s an economic term to describe this phenomenon, it’s called stealing”.
Big packers fear two things – Competition and court rooms
Attorney Robert M. Cook, representing one of the biggest cattle feeders in Nebraska, described forcefully in “Helmuth” language what the packers had done to the market – IBP sued him.
The trial revealed the accuracy of Cook’s statements:
“At times, the company over purchases its entire needs, with forward contracts. (See Supp. App.Ex. 197) Exhibit 197 shows that during April-June of 1994, a time critical to this case, IBP contracted for as much as 122%, and as little as 53%, of its entire projected kill with cattle contracted for forward delivery. IBP’s corporate policies required it to sell these cattle on the commodities market before they were contracted for purchase from a cattle feeder. IBP killed 180,000 head of cattle per week in 1994.”
When closing argument was presented against IBP in the Cook case (USDC Neb. 1995) I argued to the jury that IBP had become the largest owner of cattle feedyards in America through the artifice of contracting. Forward contracts had permitted IBP to buy up, control, and therefore effectively own, an overwhelming portion of America’s cattle production capacities “without buying one acre of land, pouring one cubic yard of concrete, installing one linear foot of feed lot, digging one post hole, stringing one wire, or investing one dime.”
The jury reacted to the argument with widened eyes, then, as I could see the thought sink in, their amazement turned to disgust.
They rewarded my client with their verdict.
– David Domina, Attorney for Robert M. Cook
Awarding plaintiffs $1.28 billion in the 2004 Tyson/IBP trial, the jury found IBP had as much as 170% captive supply, more than in the spring of 1994. Additionally, head cattle buyer Bruce Bass admitted that IBP paid less for cash cattle when captive supplies were plentiful. Grade and yield data showed that the cash cattle IBP was forced to bid on (to set the price for captive cattle), were better quality than their so-called value-based purchases. Judge Lyle B. Strom, a Reagan appointed “de-regulation”- “bigger is better” judge, reversed the jury’s verdict, handing the cattlemen’s win over to Tyson/IBP and sticking cattlemen with Tyson’s court costs.
“You should be suing Walmart [instead of IBP], they are the problem. They tell us what they will pay and we have no choice but to pay you less.”
– John Tyson, 2002
Like losers in a Monopoly game, independent producers are out of money and sitting on the couch. The so called value-based, moving-target, grade-and-yield fools game, where quantity trumps quality and discounts are often ten times the premiums, is leaving independent producers, from ranchers to feeders, with no chance for a fair price and no hope of survival. Honesty, integrity, and meat quality have disappeared along with antitrust law enforcement and a fair cash market. The retailer monopoly (Walmart, Kroger, Safeway, etc.) is charging record high prices for beef as independent producers are slaughtered with their livestock.
“Every month 1,000 ranchers go out of production. It’s the national security issue no one is talking about.”
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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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By Mike Callicrate
“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.
Photo: Sean Cayton - 2003People producing good food from happy animals, while improving the environment, shouldn’t have to fear the government.
