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The Climate Crisis and the future of the US beef industry, By Dennis Olson

The Climate Crisis and the future of the US beef industry

Published: 16/05/2022

Rebuilding the U.S. cattle herd is imperative for labor standards, climate stability and a just transition for meat workers

Dennis Olson, UFCW

At its peak, Cargill’s beef plant in Plainview, Texas employed 2000 workers with good paying union jobs and generous benefits, collectively bargained with the help of the United Food and Commercial Workers Local 540. During the summer of 2011, Texas ranchers became increasingly desperate as drought scorched their pastures and turned their watering ponds to dust. Ranchers reluctantly began to sell off their cattle, including their valuable female breeding heifers essential for future herd rebuilding. By the end of 2011, Texas was in the grip of its worst drought in recorded history. And it was about to get worse—both for the Texas ranchers, and for the Cargill meatpacking workers in Plainview.

By 2012 the drought had deepened and expanded beyond the Southern Great Plains to the rest of North America. By the time rains finally arrived in 2013, the Texas cattle herd had shrunk by about 1.2 million head, or about quarter of its former size of five million in 2010.[1] By 2014, as the drought took effect throughout the continent, the herd had dwindled to its lowest level since 1941.

Since its passage in 1994, the North American Free Trade Agreement (NAFTA) had enabled beefpacking companies to acquire feedlots in Canada and Mexico, and to ship those Canadian and Mexican cattle tariff-free over the borders, to their U.S. plants

Drought had already extended from Texas into northern Mexico in 2011. Mexican ranchers, like their U.S. counterparts, had also sold their cattle and sent them north to slaughter in U.S. plants like Cargill-Plainview, keeping them open longer. But those Mexican cattle eventually ran out too, and the workers at the Plainview plant had no more cattle left to harvest. In early 2013, Cargill notified its workers that it would close the plant. The workers were out of a job; and it would be challenging to find new ones in the now parched rural economy of the Texas panhandle.

Although NAFTA had provided the Plainview plant with a short-lived but ultimately futile lifeline, for nearly two decades the agreement had been undermining the resilience of the beef supply chain. NAFTA had cleared the way for the global meatpackers like Cargill to acquire feedlots anywhere in North America and ship cattle across borders to their U.S. packing plants. When U.S. domestic cattle supplies got low enough so that demand would normally push prices up to kickstart herd rebuilding, the meatpacking companies continued to suppress prices through shipping from feedlots to processing plants across the borders. This intentional price suppression undermined domestic demand, artificially suppressed U.S. cattle prices and removed any economic incentive for ranchers to hold back breeding cows for herd rebuilding. The meat companies used NAFTA to break the historical cattle cycle.

In the case of the Cargill-Plainview plant, UFCW successfully petitioned the Department of Labor under the Trade Adjustment Act (TAA) to grant extended unemployment and vocational training funds to those workers who were laid off to help them transition to new jobs. In its petition, UFCW proved that beef imports “contributed importantly” to the plant shutdown, which was the test that had to be met to release the worker assistance funds.[2] One pillar of a Just Transition should be to expand the TAA to assist workers who lose their jobs due to climate shocks, not just trade disruptions.

After NAFTA broke the cattle cycle, the herd never again recovered to its pre-NAFTA levels. Today, the question remains whether the herd will ever recover, or simply continue its decades long decline to oblivion under NAFTA. The rebuilding of the cattle herd is crucial not only to the ranchers who raise the cattle, but also to the workers who process them. And to the planet.

The questions regarding how much and what kind of beef we should produce is pivotal to the success or failure of any strategies around a Fair and Just Transition toward effective climate mitigation. Yes, cows have the biggest carbon footprint because of the methane they emit, but we still need them and other ruminants back out on sustainable pasture rotations, improving soil health and fixing carbon. Such a migration of cows from industrial “concentrated animal feeding operations” (CAFOs) to sustainable pastures would break up fossil-fuel monocultures, making the countryside more resilient in the face of increasingly climate volatility including severe droughts and floods, wildfires and more deadly pandemics.

We must develop and implement policies that reverse current, unsustainable neoliberal market deregulation that has unleashed the overproduction of fossil-fuel feedgrains, driving crop prices far below the cost of production. A Tufts University study[3] found that the indirect below-cost feed subsidy caused by the market deregulation of feedgrains in the 1996 Farm Bill siphoned $35 billion out of our rural economies and into the coffers of global meat packers and dairy processors. This cheap feed policy is the hidden driver of the otherwise inexplicable and relentless expansion of industrial CAFOs that everyone seems to dislike but that no one can seem to curtail.

We need supply management with strategic grain reserves to create price floors in grain markets—not only to give farmers a fair minimum price that covers their real cost of production but also to take away that $35 billion cheap feed subsidy from the industrial livestock complex by making them pay the real cost of production in the market. Such a strategic grain reserve should also have a price ceiling that triggers the release of those reserves back out onto the market whenever prices rise too high, causing hunger, and suppressing demand for meat and shuttering meatpacking plants. Supply management is one of our most effective tools for avoiding the worst impacts of global warming.

Supply management can curtail the overproduction of below-cost feed grains grown with the assistance of fossil-fuel based fertilizers that subsidizes the unsustainable overproduction of industrial meat.

Stronger antitrust laws and trade reform must curtail the ability of the global meat cartels to manipulate cattle prices and cheat ranchers and prevent the race to the bottom for the lowest labor standards. The fight back has begun. Workers have recently won a multimillion-dollar legal settlement against meatpacking companies for colluding to suppress wages.[4] Consumers have won similar settlements,[5] and rancher antitrust complaints are pending.[6]

Public procurement reform would allocate preferences to suppliers who respect workers’ rights to organize a union; who pay farmers and ranchers a fair price and redress historical racial discrimination; and who invest in local economies rather than extract wealth from them. Such preferences should also include favoring worker- and farmer-owned cooperatives with union contracts. These farmers and workers will spend money on Main Street, not Wall Street. And such preferences should exclude the bad actors who egregiously violate labor, antitrust and environmental laws, from bidding on public contracts.

Working together, we can succeed in forging policies to incentivize herd rebuilding.

Removing the massive indirect feed subsidies to industrial meat production through supply management of grains would reduce the carbon footprint of beef by leveling the playing field for pasture-based ruminants versus CAFO meat production, allowing cows to revert to their natural ecological role of rebuilding soil health and fixing carbon. And requiring the industrial meatpackers to pay the real cost of production for feedgrains would reduce the amount of fossil-fuel feedgrains fed to cattle, further reducing beef’s carbon footprint.

Finally, eliminating the cheap feed subsidy would break up the fossil-fuel monoculture cropping that is hemorrhaging toxins to point of creating a massive dead zone of the Gulf of Mexico. Moving cattle out of massive industrial CAFOs and back onto sustainable pasture rotations would improve soil health and fix carbon, making the countryside more resilient in the face of ever more severe droughts, intense floods and devastating wildfires. By implementing these policies, and facilitating herd rebuilding, we can prevent US and global beef demand from being reliant on deforestation, particularly the destruction of the Amazon rainforest. More cows on more grass can become a guiding principle by which to measure our success towards a fairer and more just climate transition.

[1] Texas cattle herd hits 8-year high; will prices suffer? Austin American-Statesman, March 23, 2019: https://www.statesman.com/story/business/agricultural/2019/03/22/texas-cattle-herd-hits-8-year-high-will-prices-suffer/5635084007/

[2] U.S. Department of Labor, Employment and Training Administration; TAA Decision 85160; TA-W-85,160 CARGILL MEAT SOLUTIONS CORPORATION A SUBSIDIARY OF CARGILL, INCORPORATED PLAINVIEW, TEXAS; April 3, 2014.

[3] Global Development and Environment Institute, Tufts University, Policy Brief No. 07-03 Dec. 2007 Feeding at the Trough Industrial Livestock Firms Saved $35 billion From Low Feed Prices; By Elanor Starmer and Timothy A. WiseGDAE https://sites.tufts.edu/gdae/files/2020/03/PB07-03FeedingAtTroughDec07.pdf

[4] Pilgrim’s Pride reaches $29M deal in wage-fixing case; Published Sept. 4, 2019; Updated July 8, 2021; Food Dive website accessed April 11, 2022; https://www.fooddive.com/news/pilgrims-pride-reaches-29m-deal-in-wage-fixing-case/562165/

[5] Eli Hoff, Investigate Midwest; July 29, 2021; https://investigatemidwest.org/2021/07/29/is-this-legal-why-an-obscure-data-service-has-been-sued-nearly-100-times-for-facilitating-anti-competitive-behavior/

[6] R-CALF USA and Other Plaintiffs’ Case Proceeds to Discovery; R-CALF USA Press Release, September 14, 2021 accessed on R-CALF USA website, April 11, 2022; https://www.r-calfusa.com/minnesota-federal-court-denies-packers-motion-to-dismiss-cattle-antitrust-cases/

By implementing these policies, and facilitating herd rebuilding, we can prevent US and global beef demand from being reliant on deforestation, particularly the destruction of the Amazon rainforest. More cows on more grass can become a guiding principle by which to measure our success towards a fairer and more just climate transition.

Dennis Olson, UFCW