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Industry concentration hurts consumers and farmers | |||
According to USDA data, in 1975 cattlemen (includes producers and feeders) received 65% of the retail beef dollar. In 2001, cattlemen only received 40%. According to C. Robert Taylor, Alfa Farmers Eminent Scholar, Auburn University: “The increasing gap between retail food prices and farm prices in the 1990’s is due largely to exertion of market power, and not to extra service performed by processors and retailers.”
We think this is unfair and bad for both you and us. To a large packer or retailer, you are simply a consumer. The health of you and your family is irrelevant to them. Only your money matters. To us, you are a family just like ours--a family that deserves healthy and safe food. You are people we want to see year after year. We want you to come back so we give you the best.
Concentration is unfair to ranchers because the market for their product is no longer competitive, but controlled by collusion. Packer concentration has driven many small ranchers out of business and some to suicide (ConAgra’s response: "We hope to make their exit from production agriculture as graceful as possible").
Today, on every 1200 lb. slaughter steer, the retailer gets $722; the packer $160; and the producer $779. The retailer and packer handle the product for a few days; cattlemen raise the animal, supply the labor and the high-capital inputs like land and breeding stock, and invest 2 or 3 years in each animal. Is this a fair distribution of income? If we look closer, income and expense analysis show retailers are making nearly $400 per head profit. Even if we figure a less-than-generous break-even price, cattlemen who retain ownership of their cattle through slaughter are losing $100/head or more.
--Mike Callicrate, 2003, cattleman and feeder
Battling for the Packer Ban
By Kari Lydersen, AlterNet
September 3, 2002
Excerpt:
As with auto companies
buying up steel plants or office supply companies owning lumber outfits,
vertical integration and mass conglomeration are quickly becoming the name
of the game in the meatpacking industry. It used to be that large meat
packers such as Tyson and IBP would purchase hogs and cattle on an open
market from producers of various sizes, including many small farmers with
only a few hundred head of livestock.
Today, more and
more often the meatpacking companies are owning and raising their own livestock
or making deals with certain large farmers in which they essentially have
control of an animal throughout its life and after its slaughter. This
means that packers now keep the money that they otherwise would have paid
to livestock producers for their animals, creating a domino effect on small
communities since producers no longer have that money to spend in their
communities.
The increased profit for packers has not
been shared with consumers in terms of lower prices. For small and medium-sized
farmers, this trend is devastating, causing a huge shrinkage of the available
open competitive market for livestock and forcing them to compete with
the huge packer operations, who have access to preferential price deals
with their few chosen mega-farms.
And farmers aren't
the only ones being hurt. The meatpacking companies almost always raise
animals in huge factory-farm style operations, which are much more harmful
to the environment than typical family farms and are also usually considered
less humane for both the animals and workers. Packer "captive supply" of
livestock has been quickly increasing in the past decade.
(read
more)