Mike Callicrate | No-Bull Food News

Restoring Economic Health to Beef Markets

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History Repeated

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Do we have the courage of our ancestors?

By Mike Callicrate

Back in the 1990’s when I was suing IBP for anticompetitive practices and being shut-out of the market by the big beef packers, I asked Secretary of Agriculture Dan Glickman why he didn’t enforce the P&S Act of 1921.

Emptiness –In 1999, when the Callicrate cattle operation was denied fair market access by the major meatpackers, fifteen families lost their income, and the community lost a good market for feed, feeder cattle and calves.

The schools of St. Francis, Kansas, have one-half the enrollment of 30 years ago.

Residents travel 35 miles to shop at a Walmart.
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We discussed how the Act was originally legislated to protect livestock producers from the abusive market power of the big meatpackers. He responded, “It’s different now. We’re in a global market. We need big companies that can do business globally.” Politicians, as now, were worshiping at the altar of globalization, giving thanks for the monetary and political support of corporate lobbyists. It was the era of “free trade”, the WTO, NAFTA, “bigger is better” and the Land Grant college and university delusions of economies of scale and efficiencies. Secretary Glickman had drunk his fill of the multinational corporate Kool-Aid.

Former IBP executive vice president, Hughes Bagley, had shared with me the results of a 1970s report by the Boston Consulting Group. According to Hughes, they said, “Cooperate, don’t compete.” The Harvard group advised Hughes and other IBP top leadership that their competitors were also very large. If they could cooperate, rather than compete, they could all increase their profits. Cattlemen were then receiving around 65% of the dollar consumers were spending for beef.

The Farmers Advocate – The Giant Beef Trust – May 25, 1905 reported:

“Until cattlemen learned that the buyers all had one price to offer and seemed indifferent whether they got the cattle or the same at Omaha, St. Louis, Kansas City, and Chicago, did they begin to understand that the beef trust had taken the whole business into their own hands, and were fixing prices to suit themselves.”

The law that intended to prevent another “Beef Trust” was ignored by Secretary Glickman as with every other USDA enforcer since its passage. Today’s big packers have grown far more powerful and abusive than even Wyoming’s Senator John B. Kendrick could have imagined when he pleaded for the passage of the Act in 1921:

“It has been brought to such a high degree of concentration that it is dominated by few men. The big packers, so called, stand between hundreds of thousands of producers on one hand and millions of consumers on the other. They have their fingers on the pulse of both the producing and consuming markets and are in such a position of strategic advantage they have unrestrained power to manipulate both markets to their own advantage and to the disadvantage of over 99 percent of the people of the country.  Such power is too great, Mr. President, to repose in the hands of any men.”
–These words were spoken on the floor of the U.S. Senate by Wyoming Senator John B. Kendrick in 1921

Today’s blood thirsty meatpackers own or control everything from the land grant universities to college professors and their curriculums. They own or control their own national organizations, like the American Meat Institute and the National Meat Association, with its loyal mouthpieces, Patrick Boyle and Barry Carpenter (Former Deputy Administrator of USDA’s Ag Marketing Service). With their symphony of lackeys, they own or control the national organizations and publications, purported to represent the interests of livestock producers. Along with control of organizations, like the National Cattlemen’s Beef Association (NCBA), the packers manage the producer commodity check-offs, which they use to promote their enslaving industrial food production systems and low-quality meat. They boast of sustainability and stewardship as ranchers and rural communities, betrayed by the courts, are wiped out by their anticompetitive practices.

A Big Lie from the NCBA/Beef Checkoff:

“When you serve beef, you’re supporting family farming.”

Revealing a MAJOR conflict of interest, NCBA endorsed the meatpacker’s opposition to the proposed GIPSA rules, which, if enacted, would help restore a living wage to families producing cattle.

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In his 1906 exposé The Jungle, Upton Sinclair explained:

“They own not merely the labor of society, they have bought the governments; and everywhere they use their raped and stolen power to entrench themselves in their privileges, to dig wider and deeper the channels through which the river of profits flows to them!”

We have no less of a Jungle today and no less of a “Beef Trust” — from the way farmers and ranchers are denied a fair income, to the exploitation of workers, to our deplorable lack of food quality and safety.

This unprecedented concentration of market and political power has once again stolen the promise of economic fairness and equal opportunity from our independent livestock producers. They are being left destitute, now receiving an insulting 46% share of what consumers are paying for beef (over 40% of our cattle producers have gone out of business in the last 30 years). Today, this 20% reduction in the farm’s share of consumer spending (nearly $500 for every steer and heifer slaughtered by the big meatpackers) is in the pockets of big meatpackers, retailers, and members of Congress.

Americans have never tolerated the loss of our freedoms. The conditions that led to the powerful business trusts and the writing of the Jungle came about 100 years after declaring our independence from the abusive rule of the British Crown and East India Company partnership. Today, big business control of government is back.

Thankfully, now when courage is needed, the spirit of freedom is alive in J. Dudley Butler. As Administrator of the Grain Inspection, Packers and Stockyards Administration (GIPSA), Mr. Butler, for the first time in 89 years is saying no to today’s illegal corporate Beef Trust and its cozy partnership with our government.

The proposed rules are aligned with the original Congressional intent of the P&S Act, and if adopted, could be the seeds of a new sustainable food system with many family farms and ranches producing our food, caring for our livestock and land, while rebuilding the foundation of our rural communities and the overall economy.

Dan Glickman left his job as Secretary of Agriculture to lobby for the film industry. I understand he is now President of Refugees International. Could he be witnessing first-hand the human toll of over thirty years of no-rules, extract and exploit, corporate-controlled globalization? Perhaps he could tell us why in our typical big meat packing plant it is necessary to speak over 100 languages to communicate.

Yes, history is repeating itself. Will we support J. Dudley Butler in standing up to abusive market power, or will we continue on the fool’s road of corporate servitude to deeper economic and social decline?

Mike Callicrate is an independent cattle producer from St. Francis, Kansas, marketing his beef through his company Ranch Foods Direct  in Colorado Springs, Colorado.

THE FARMERS ADVOCATE – THE GAINT BEEF TRUST

Download The Farmers Advocate – May 25 1905

Very frequently our correspondents, the past year or two, have spoken of the low price of beef cattle. The feeling seems to be general that the price of these cattle is not what it should be as compared with that of the corn that fattens them. Consumers have the same opinion when comparing the high costs of steaks and roasts with the quotations of cattle on foot. The reason for this strange condition has not been generally understood. It seemed to many that there must be an oversupply of cattle on the ranges, but that was not true. Until cattle men learned that the buyers all had one price to offer and seemed indifferent whether they got the cattle or the same at Omaha, St. Louis, Kansas City, and Chicago, did they begin to understand that the beef trust had taken the whole business into their own hands, and were fixing prices to suit themselves. According to a very thorough and interesting discussion of this subject in the current number of Everybody’s Magazine, it appears that it matters not which of the great packing companies at any of the points named, buys up a carload or a trainload of cattle; each one gets a share in the packing and the profits. Formerly there was active bidding on a lot of cattle on arrival; now one buyer sets the price, and it matters not to which company the sale is made. A shipper, who has been long in the business in Nebraska, is quoted as saying “that since the trust was formed the producer has never been certain of his market. When the price drops so low that owners stop shipping, the packers push the price up a few points to induce them to begin shipping again. But they have their private and secret ways of keeping tab of the cattle coming into the market, and know to a carload how many will reach them on a certain day. When their bait has been taken and cattle are on their way, they put the price down, and the shipper finds that he must sell at cost, or perhaps often enough at an actual loss.”

    With this explanation it is easy to understand how the market runs so low and unsatisfactory to the shippers, and at the same time the prices of dressed meats are so high and unsatisfactory to consumers.

    Imagine for a moment what would be the result if all the products of the farm were under trust rule, so that the prices of corn, wheat, hay etc., were regulated, not by the law of supply and demand, but arbitrarily, or according to the notion of some individual. What an uncertain business farming would become. Perhaps it would be as near the truth to say that the business that ought to be, and naturally is, the most sure and independent would become exactly the opposite; for the farmer could never be sure that any crop he might care to grow would pay for the labor and expense he put upon it, and he would be dependent on the whim or notion of the agent of one great trust for what he received for all his products. What the beef trust has done for Iowa and South Dakota illustrates what such a trust as we refer to would do for the farming interests everywhere. In the former state a loss of $12,500,000 has been inflicted upon the cattle growers and feeders in the past four years, and in the latter $10,000,000. In Iowa more than thirty banks have failed directly because of the losses of farmers in the beef cattle industry, and ten or more suicides of bank officers and farmers have occurred as a result of these failures. The trust system is wrong, and must be overthrown. But how?

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