Some things don’t change – In 1918 the Federal Trade Commission reported packers were “manipulating markets, restricting flow of foods, controlling the price of dressed meat, defrauding producers and consumers of food, and crushing competition.” Five packers (Armour, Cudahy, Morris, Swift and Wilson) controlled half the market. The Packers and Stockyards Act of 1921 was legislated to prevent another catastrophic monopoly-like meat trust from forming again. Today, four packers control 85% of the market, and predictably, the results are the same!
Without antitrust laws protecting a fair, open and competitive marketplace, cattle feeders are easy prey to the big meat packers.
Callicrate was a plaintiff in the 1996 meatpacker lawsuit Pickett vs. IBP.
How did the big packers regain their control over the marketplace?
Capture your suppliers’ trade group
In the early years after the National Cattlemen’s Association was reorganized (1996) to include the big meat packers as members and final plans were in place to capture control of the $80 million dollar per year cattlemen’s beef checkoff (Beef Tax), there was heated debate over whether packers should be allowed to own livestock. The 1921 Packers and Stockyards Act prevented meat packers from owning or controlling everything from the stockyards to retail. The Act basically was designed to prevent packers from doing anything that would have even the effect of reducing competition. Cowboys wanted to raise cattle and for packers to be packers. They wanted a tight fence between them and the packer – a competitive market. Cattle producers wanted a fair price for their cattle and the packers wanted to buy them as cheap as possible – so why were they members of the same lobbying group?
March 5, 2000, Lee Pitts wrote…MORE