Americans have never had so few options in deciding what company makes their meat — Washington Post
Americans have never had so few options in deciding what company makes their meat
BY ROBERTO A. FERDMAN June 11 at 1:41 PM
Americans have never had this many options in the beef aisle. That’s certainly what the growing number of offerings lining supermarket shelves would seem to suggest. And yet, behind the carefully branded facade of new packaged meats is a rather different and troubling reality: the mere illusion of choice.
Americans, as it turns out, have actually never had so few options in deciding what company makes their meat. "The US meat industry is more consolidated today than it’s ever been before," Christopher Leonard, author of The Meat Racket: The Secret Takeover of America’s Food Business, said in an interview.
Indeed, the top four US beef packers—Tyson Foods, JBS USA, Cargill, and National Beef—control some 75% of the US beef market, according to Tyson (pdf p. 11), the nation’s largest packager. Leonard, for his part, puts the number closer to 80%. 50 years ago, that number, formally referred to as the four-firm concentration, was nearer to 25%, per estimates by the Census Bureau (pdf p. 8).
Copying Big Soda
A similar shift has played out in other US industries. The soda industry, despite its many branded offerings, is heavily controlled by two companies—Pepsi and Coca Cola. A soda buyer might feel as though she’s choosing between a healthy selection of diverse carbonated offerings, but in reality she’s picking one of the many carefully targeted drinks developed by one of the two giants. Pepsi and Coca Cola, after all, control some 72% of the overall soda market.
But meat is a different, and more dangerous game. Consumers are becoming increasingly more concerned with how their meat is produced. Part of that is born from a demand for more humane practices—the meat industry’s malpractices are well documented—and part of that stems from a heightened awareness about what people are putting into their bodies—the meat industry has come under fire for both its questionable practices and potential for large-scale contamination. An ever-shrinking pool of options will only make it more difficult for consumers the fair opportunity to appropriately decide whom they do business with.
Tyson Foods won the bidding war from Pilgrim’s Pride in the food fight over Hillshire Brands. Tyson outbid Pilgrim’s Pride offer by about $1 billion to seal the deal.
The great American beef consolidation
So why has the beef industry tended toward near monopolies? A healthy appetite for the kind of acquisition that Tyson is about to make by purchasing Hillshire, which makes Jimmy Dean sausages, ball park hot dogs, packaged deli meats, and a horde of other popular, branded meat products. Tyson is reportedly offering to buy Hillshire for $7.7 billion. “We want to buy this business for what it can become, not just for what it is now," Tyson chief executive Donnie Smith told investors in a conference call. What Hillshire can become is the latest vertical integration by the nation’s largest meat company.
Unlike Tyson, which primarily packages the sort of unbranded meats lapped up by restaurants, cafeterias, and supermarkets around the US, Hillshire instead focuses on the end product—branded, value-added, packaged meats. Think pepperoni, sausage, and hot dogs—most of which just so happens to be made with Tyson’s, or one of its competitors’, unbranded offerings.
The move is merely par for course, since Tyson has been gobbling up its meat suppliers, buyers, and competitors for decades, and, in doing so, forcing other beef behemoths to do the same. Brazil-based meat packer JBS, the second largest beef provider in the US, now churns out 3.3 million pounds of supermarket-ready meat each day. "Companies like Tyson are swallowing up all the independent brands," Leonard said. "It’s not only true of beef, but poultry, too." Tyson, mind you, was the king of chicken before it usurped the American beef throne as well.
Tyson is basically forcing its competitors to mimic it or get out of business." That appetite began in earnest in the late 1970s (which is reflected in the USDA data charted above), and has largely shaped the American meat landscape. It’s why today, more than ever before, the modern meat consumer enjoys the mere illusion of choice.
I give Leonard real credit. He was at the USDA and DOJ’s meeting in Alabama over these issues. He listened and was appalled at what had happened in the meats industry. I met after the conference at Starbucks and spoke to him briefly about some of the issues.
We have had a bunch of people in the media who call themselves journalists but mostly do a he said he said show of talking points by principals. Leonard took his journalism seriously, went back to Arkansas, and found the real story, which he provided the public via his book.
He is like a Piketty of economics fame. He actually researched what was happening.
It is and insult to their own intelligence that federal judges have been throwing cases on the basis of their manufactured understanding of economics (manufactured by the best and most connected lawyers money can buy) and the laws that are supposed to govern this industry.
If any blame can be laid, it is at the feet of these federal judges who preempt Constitutional mandated trials by juries and instead go with the rule of gold.
Our industries are being consolidated at an alarming rate and much of it would be currently illegal if federal judges were competently doing their jobs instead of pandering to the wealthy.
What a shame our country has become for the average citizen and what a playground it has become for billionaires wiling to buy our political elite and minds of our federal judiciary.
Our founding fathers knew this danger and wrote in the Constitution of the United States jury trials to prevent the capture of the people’s interest by judges who were too biased toward an aristocracy.
Bravo for Leonard for actually engaging in real journalism while the major networks fiddle with trivia.
Bravo for Eric Cantor’s defeat for the political conservatism of pandering to corporate greed over the public interest.
People are starting to catch on to what is happening to them.
If we only had the choice of voting politicians either in office, out of office, or into the federal pen, this process would go fast enough to do some good and increase voter participation at the same time.