Billings, MT | There’s a fierce conflict within the U.S. cattle industry right now. One side says we need to reverse the industry’s present course of consolidation, vertical integration (where the beef packer controls the production of cattle), and centralization. We’re on this side and we believe our industry will continue to shrink in terms of the number of cattle producers, number of cattle, and number of small to mid-sized feedlots if our industry’s present course is not quickly reversed.
But the other side says no changes should be made to our cattle industry. This side says consolidation, vertical integration, and centralization are good for the industry because through them is an emphasis on largeness of scale that creates efficiencies. They point to the fact that like in the hog and poultry industries, they can increase production with fewer cattle producers, fewer cattle, and fewer but larger feedlots.
Whose arguments are right?
The answer is they both are. If we stay on the present course, the cattle industry will continue to contract and will soon resemble the highly concentrated and vertically integrated hog industry that has lost 90 percent of its hog producers during the past few decades. But you can’t argue that today’s hog industry isn’t highly efficient from a purely economic standpoint.
So, “whose argument is right?” is simply the wrong question. The right question is, “Who do you want producing your food, and how do you want it produced?”
If you don’t really care about who produces your food such as whether it’s produced under the control of a handful of principally profit-driven global corporations whose emphasis is primarily on achieving economic efficiency and who may or may not source their inputs domestically. And if you don’t really care if your food is produced under United States’ production standards or if it’s produced in a centralized and highly concentrated industrial type setting, then you’re likely on the side of those who believe that nothing should be done to change the course of the U.S. cattle industry.
But, if you want your food produced by many widely disaggregated family-scale farmers and ranchers that support their local communities and operate independently from the global beef packing and processing sectors, and if you want your food produced under conditions that are viewed as environmentally friendly and able to withstand a climatic or disease-related shock because production is scattered all across the United States, then you’re likely on our side of this conflict and your support is needed to reverse the present course of our industry.
If you are on the side of wanting to reverse the present course of our industry, then you need to know that the stars are lined up right now to provide us with a genuine opportunity to restore the kind of food system we want.
You see, the Department of Agriculture has just issued a proposal known as the Packers and Stockyards Act proposed rule that will help sever the control that the global beef packers have over individual farmers and ranchers and their markets. The proposed rule can accomplish this by prohibiting global beef packers from engaging in unfair marketplace conduct that may injure individual producers or that may interfere with the competitiveness of the market itself.
And the Department of Justice has just announced that it intends to step up antitrust enforcement in our domestic cattle and beef markets. Its plan is to establish an agricultural antitrust enforcement branch in the Midwest to be closer to the food production systems it intends to protect.
And, Congress has before it bills that would require country of origin labeling or MCOOL for beef that can be passed in the 2024 Farm Bill so consumers can choose to buy beef based on who produced it (whether by domestic farmers and ranchers or foreigners), and how it was produced (whether under U.S. production standards or under a foreign country’s production standards).
Never before have all three of these reform initiatives been presented at the same time. In summary they are:
The Packers and Stockyards Act rules to prohibit unfair and anticompetitive conduct in the marketplace.
The Department of Justice announcement to step up antitrust enforcement in the cattle and beef markets.
Mandatory country of origin labeling for beef legislation that will enable consumers to choose who produces their beef and how it is produced.
Let’s fight to win all three of these important initiates that will help reverse the ongoing consolidation, vertical integration, centralization and globalization of our food system. But know this: There’s a large faction out there that doesn’t want any one of these three initiatives to be successful.
And so, I hope and pray you will help us fight to win all three of these important initiatives so you can choose who produces your food and how it is produced. And we’ll start with the U.S. cattle industry.
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R-CALF USA’s weekly commentary educates and informs both consumers and producers about timely issues important to the U.S. cattle and sheep industries and rural America.
Ranchers Cattlemen Action Legal Fund United Stockgrowers of America (R-CALF USA) is the largest producer-only trade association in the United States. It is a national, nonprofit organization dedicated to ensuring the continued profitability and viability of the U.S. cattle and sheep industries. Visit www.r-calfusa.com or call (406) 252-2516 for more information.
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