Why’s beef so expensive? Politicians sold out Missouri cattle farmers to foreign firms | Opinion

“A long time ago in a Congress far, far away,” an important antitrust law was passed to address extreme concentration in the United States’ meat industry. The Packers and Stockyards Act of 1921 was created “to assure fair competition and fair trade practices, to safeguard farmers and ranchers ... to protect consumers … and to protect members of the livestock, meat, and poultry industries from unfair, deceptive, unjustly discriminatory and monopolistic practices.”

This fundamental law has not been enforced or strengthened to address the reality of today’s marketplace, specifically since the 1980s.

It’s been nearly three years since the largest corporate meatpackers were called before Congress to testify about excessive business consolidation in the meat industry, increased prices for consumers, low prices for livestock producers and record profits for themselves. However, that’s where it stopped — and our elected representatives have done nothing to address multinational and foreign control of our cattle and beef markets. So the United States Department of Agriculture had to do it itself.

On Oct. 8, the USDA announced it wanted public input on upcoming new rules to restore fairness in cattle markets in an advanced notice of proposed rulemaking to address “price discovery and competition in markets for fed cattle.”

This proposed rule is aiming to strengthen the enforcement of the Packers and Stockyards Act and is an important and necessary step to help save independent family farm cattle producers from the fate of independent hog producers. In one generation, nearly all independent hog producers were put out of business (upwards of 90%) because of a severe lack of antitrust enforcement, and resulting in more corporate control, extreme consolidation and concentration in U.S. hog markets. Another consequence: Four corporations control 70% of the U.S. pork industry, and 50% is controlled by two foreign meatpackers, China’s Smithfield and Brazil’s JBS.

Here are just a few examples of what you get when just a few multinational billion-dollar corporations control almost all the beef in the U.S.:

1. America is a net importer of beef. In 2023 alone, the United States imported 3.7 billion pounds of boxed beef, and 2 million head of live cattle.
2. We don’t have the ability to know where our meat comes from. Mandatory country of origin labeling for meat was passed in the 2008 farm bill, and its implementation along with widespread drought led to a steady increase in prices paid to cow and calf producers, culminating in the record profit of $518 per calf in 2014. At the behest of multinational corporate meatpackers and lobbyists, Mexico and Canada filed a complaint to the World Trade Organization arguing that our country of origin law letting consumers know where their meat came from was an illegal trade barrier. The unelected, bureaucratic and pro-corporate World Trade Organization agreed. In 2015, Congress repealed that law and our right to know and choose U.S. beef.
3. According to the 2022 USDA Census of Agriculture, the U.S. lost 150,000 cattle operations, and Missouri lost 10,000 cattle operations in just those five years.

For decades, cattle producers across Missouri and the United States have been organizing and advocating for open, fair and competitive commodity markets, ensuring a fair price for producers and consumers, resiliency in our food system and economic viability of independent family farms, rural communities and workers. Just in the past two years, we went to Washington, D.C., three times with the Missouri Rural Crisis Center and other Midwestern livestock producers to talk with our elected representatives and governmental agencies about the issue of captive supply and meatpackers’ use of alternative marketing arrangements, or AMAs.

Over the last two decades, meatpackers significantly increased their use of AMAs. These are contracts that keep fed cattle off the spot or cash market, and allow the four meatpackers that control more than 80% of the U.S. beef market to suppress prices paid to fed cattle operations. These lower prices work through the system and also lower prices to small and medium-sized cow/calf operations. In the last decade, upward of 80% to 100% of cattle sales in some regions of the country are procured through AMAs. However, cash markets — and in particular, regional cash negotiated live markets — continue to serve as the primary price discovery vehicle for all cattle traded, feeding into the prices set by formula contracts. Therefore, it benefits meatpackers to keep cash market prices low intentionally, lowering the prices they pay through formula contracts and depressing prices paid to Missouri cattle farmers.

Importing billions of pounds of boxed beef, taking away country of origin labeling, utilizing unfair pricing formulas, creating trade deficits and increasing concentration in processing — it’s the multinational meatpacker’s playbook. With these problems, it is no surprise that from 2017 to 2022, we lost so many cattle operations and consumer prices are at historic highs.

Cattle production is the largest part of the U.S. agriculture industry, and for independent cattle producers to continue to exist, prosper and pass our operations down to the next generation, we need strengthened and enforced antitrust laws, an open and competitive marketplace, fair protections and safety nets. We also need a livestock title in the farm bill, but that’s for another day.

The USDA is inviting stakeholders to submit comments on several options for increasing competition in fed cattle markets. The deadline to submit comments is Dec. 10. Join us in helping the force be with independent American cattle producers by submitting comments and demanding this important update to the Packers and Stockyards Act crosses the finish line and starts the arduous process of restoring competition in U.S. cattle markets.