Vic Bradshaw, Virginia Correspondent
Jan 15, 2017 Updated Jan 16, 2017
TIMBERVILLE, Va. — Leaders from the Organization for Competitive Markets claim big agriculture is making large amounts of money at the expense of the American farmer and consumer.
At a meeting Tuesday at the Plains District Community Center, part of the organization’s “Taking it Back” tour, leaders from the organization said USDA data show that while cattle prices have dropped 51 percent and calf prices have dropped 50 percent, retail beef prices have fallen just 8 percent.
“That tells me the packers and grocery retail chains are making a lot of money off our hard labor,” said Mike Weaver, a broiler chicken farmer in Fort Seybert, West Virginia, and president of the organization.
About 25 Shenandoah Valley farmers came to the meeting that included comments from three of the organization’s leaders.
They encouraged farmers in attendance to sign petitions supporting the protection and reinstitution of regulatory safeguards to protect producers and consumers, and the use of antitrust legislation to break up monopolies that have developed in food commodity industries.
John Maxwell, the organization’s executive director and a former Missouri lieutenant governor, said a handful of companies are wielding too much power in the food system, which has come to the attention of two Republican senators, Chuck Grassley of Iowa and Mike Lee of Utah. Maxwell said President-elect Donald Trump has also made statements supporting breaking up the monopolies.
Legislation will have to be passed to accomplish that goal, but that requires action be taken by farmers, consumer groups and animal-rights groups to go up against the agribusiness lobby, he said.
“We need more bodies,” Maxwell said, “because it’s going to take an army to push against the” likes of National Cattlemen’s Beef Association, National Pork Producers Association, Tyson, Pilgrim’s Pride and JBS.
Representatives of the various companies and groups could not be reached by deadline for comment on the claims made by the OCM leaders.
Maxwell said two recent presidential administrations stripped away regulations designed to safeguard the public. He said Ronald Reagan removed restraints that prevented a few companies from dominating the market and Bill Clinton supported the repeal of the Glass-Steagall Act, which kept big banks from dominating markets and improved access to funding for farmers and small businesses.
Maxwell said that as a result of those actions, markets have been severely concentrated and controlled by foreign companies, farmers have left their land and businesses, and wealth has been driven away from rural America.
Maxwell said markets are considered open and competitive when an industry’s four biggest players control 45 percent or less of the market. But deregulation, he said, has allowed for consolidation that’s pushed control well beyond those figures.
For example, the four largest beef packers control 83.5 percent of the market. A quartet of pork companies control 66 percent of that market, and the four largest chicken and turkey companies control 58.5 percent and 55 percent of their markets.
Seed giant Monsanto controls most of the corn and soybean market in the U.S.
Maxwell said that lack of competition makes it easy for companies to collude and control what they pay for animals and what the public pays for their protein.
“There’s too few companies. There’s no competition in America,” he said.
Mike Callicrate, a Colorado Springs, Colorado, cattle farmer and owner of direct-marketing beef company Ranch Foods Direct, said two data points show how beef farmers have been squeezed over the past two years.
An analysis of choice beef data from October 2014 through September 2016 shows that retail value of beef fell 8.5 percent from its May 2015 high to its September 2016 low. However, the producers’ share of beef prices plunged from a high of 58.2 percent in November 2014 to a low of 38.8 percent in September 2016.
That means producers lost almost 20 percent of their share of the price of cattle, or $660 per head.
In 1975, which Callicrate pegged as the last year markets were competitive, USDA Economic Research Service data shows that the farm share of the retail beef dollar was 65 percent. At that time, the four largest beef companies controlled only 35 percent of the market.
By 1995, following the lifting of safeguards during the Reagan administration and industry consolidation, farmers were getting less than 50 percent of the retail beef dollar.
That figure remained fairly constant through 2000. After that, the market became erratic for several years until 2014, when a lack of supply resulted in farmers getting 60 percent of the retail beef dollar. That percentage plunged to 45 percent the following year and, after Congress repealed country-of-origin labeling, fell to 38.8 percent in 2016.
The repeal of country-of-origin labeling “gave the green light for packers to manufacture the market crash,” said Callicrate, a member of OCM’s board.
“One-hundred years ago, Teddy Roosevelt went after the robber-baron monopolies. They are back,” he said.
Maxwell is a fourth-generation pork producer in Missouri. However, to make money off his farming, he said he’s had to join a cooperative that grows hogs to high standards and sells the animals to companies such as Whole Foods and Chipotle.
Farmers, he said, need to organize to make sure big companies aren’t successful in their attempt to sweep away the Grain Inspection, Packers and Stockyards Administration, which protects the markets. He said rules need to protect contract growers and prevent predatory practices.
He said the Trump administration also needs to reinstate country-of-origin labeling so cheap meats from foreign countries aren’t imported to drive down the price of American meats.
Those attending the meeting were asked to sign a petition supporting those actions as well as two Senate bills aimed at checkoff programs.
The various checkoff programs, starting with beef, are a major target for OCM.
Weaver, who is also president of the Contract Poultry Growers of the Virginias, said a 2010 audit by the Cattlemen’s Beef Board of nine days of beef checkoff expenditures by the National Cattlemen’s Beef Association found that more than $200,000 was used improperly.
A subsequent yearlong audit by the USDA’s Inspector General was summarized in a 17-page report that took 15 months to write. But the analysis found no wrongdoing in the program, which generates $50 million annually.
The OCM filed a lawsuit against NCBA in August 2012 for their handling of checkoff funds. The Humane Society of the United States is providing free legal assistance in OCM’s effort to obtain data used to create the USDA report, and Weaver thinks the organization could get as many as 9,000 pertinent documents soon.
Weaver also said the NCBA is using beef checkoff money to lobby for big agriculture and against farmers.
“We need to take our money away from” NCBA so they can’t use it to lobby against us, Maxwell said.
Two bills in the U.S. Senate target checkoff programs.
Senate Bill 3200, introduced by Sen. Mike Lee, would prohibit mandatory or compulsory checkoff programs. Senate Bill 3201, introduced by Lee and New Jersey Democrat Cory Booker, calls for multiple changes to the checkoff programs, including greater transparency and periodic audits.
Weaver said OCM will tour the country to gather support for its efforts. It held a similar meeting in Mississippi and future gatherings are planned in Alabama and Missouri.
Support, he said, is crucial if farmers want to reduce the power agribusinesses have over them.
“The packers and poultry companies want you to think you can’t do anything,” Weaver said. “But together we can.”
Vic Bradshaw is a freelance writer based in Virginia’s Shenandoah Valley.