By Tucker Graff
May 8, 2021
If we don’t act now to break the monopoly of four meatpacking companies, 50 years from now we’ll be having the same conversation about preserving the beef industry but with even fewer ranchers in Kansas, writes Tucker Graff. (Tim Carpenter/Kansas Reflector)
The Kansas Reflector welcomes opinion pieces from writers who share our goal of widening the conversation about how public policies affect the day-to-day lives of people throughout our state. Raised on a family farm in Kansas, Tucker Graff graduates in December 2021 from Kansas State University with a bachelor’s degree in feed science and will go on to pursue his master’s degree in grain science.
Depending on where you get your news, you might believe in a disturbing trend over the last few years: the meat industry is under attack.
Apparently, President Joe Biden wants to limit everyone to one burger a month. Colorado Gov. Jared Polis sparked controversy when he called for a “Meat Out” day on March 20, and the Green New Deal seeks to lower emissions caused by the meat industry.
In response, our own U.S. Sen. Roger Marshall got in on the action, cosponsoring legislation to prevent federal agencies from banning meat in their cafeterias.
For Kansans, these panicked headlines and soundbites hit home. The cattle industry is baked into our cultural identity. You can’t drive down I-70 for any meaningful distance without seeing cattle, and Dodge City is famous for its large cattle drives down the Great Western Cattle Trail.
Most people know that almost all of this panic about meat is overblown. Agriculture does emit a large amount of greenhouse gas that we will eventually need to take action on, but the Biden administration doesn’t have an official policy of one burger a month.
The people raising the alarm are correct about one thing, though. There is a war on beef — but rather than waged by the vegan left, it’s being waged by the meatpacking industry against ranchers.
This war is more than a century old, and unfortunately, the meatpackers are winning.
For those of you unfamiliar with the industry, beef is essentially broken up into two sectors: producers (cow-calf operations, and feeders) and the meatpacking plants. The packers buy live cattle from the producers and harvest them, then that meat makes its way to the store where you, the consumer, buy it. Prices, both for live cattle and for boxed beef, are a complicated thing. They can be affected by the cost of feed, supply and demand, transportation costs and the time of year.
“Price spread” refers to the difference between what retailers pay for a standard box of beef and what processors pay for live beef cattle. It’s an easy way to quantify how much of the profit the meatpackers are taking. Between 2016 and 2018, the average price spread was $21/cwt (cwt=per hundred pounds). During May 2020, that jumped all the way up to almost $280. This happened for a multitude of reasons, not least of which is the vice grip that the meatpackers have on the industry.
Four meatpacking companies control the slaughter of more than 80% of American beef: Tyson Foods, Cargill Meat Solutions, JBS USA and National Beef Packing Co. Unfortunately, the price spread has remained alarmingly high, long after the market returned to normal after initial disruptions due to COVID-19.
Fortunately, people recognize this is a problem.
The USDA investigated the beef industry after the price spread skyrocketed following the August 2019 fire at the Tyson plant in Holcomb, Kansas. The agency also investigated prices during the COVID-19 pandemic. Unfortunately, the Trump administration eliminated the agency responsible for protecting farmers from monopolies, the Grain Inspection, Packers, and Stockyards Administration in 2018 — just one of many moves by that administration favoring big corporations over smaller producers.
GIPSA, which was set up to oversee the packing companies, is now under the control of the Agricultural Marketing Service, which was set up to cooperate with packers in order to promote beef. Not surprisingly, GIPSA is now largely ineffective.
This isn’t a new problem. In 1919, the Federal Trade Commission found that the “Big Five” companies were illegally manipulating and controlling the price of food in order to defraud farmers and consumers. Regulations were passed, but unfortunately, the Big Five shrunk to four, and business went on as usual.
There’s only one way out of this, and that’s by busting the monopoly that the packers have on the industry. It will be painful, but we have an obligation to prevent the loss of our cultural and economic identity. If we don’t act now, 50 years from now, we’ll be having this same conversation, but with even fewer ranchers in Kansas and the “Big Three” instead of the Big Four.
Corporations are motivated by profit — ranchers understand that. But there is more than enough profit on the table for everyone to have a share.
It’s exasperating to watch Marshall sponsor pointless legislation and rant about this imaginary version of the “war on beef” while he remains silent as the packing industry guts our family farms, strips away our neighbors’ livelihoods and slowly drives ranchers out of business.
Through its opinion section, the Kansas Reflector works to amplify the voices of people who are affected by public policies or excluded from public debate. Find information, including how to submit your own commentary, here.
Tucker Graff graduates in December 2021 from Kansas State University with a bachelor’s degree in feed science, before going on to pursue his master’s degree in grain science. Raised on a family farm in Kansas, Tucker is a strong believer in the importance of our livestock industry, and hopes to help it innovate and improve over the years to come.