As we venture into the local supermarket and see the empty shelves, I noticed the ground beef flying out of the store. As a cattleman, I talked to the clerks about supply and prices and was told that with the next shipment the cost was going to be higher.
For independent cattle producers, the downward spiral of cattle prices started well before the pandemic. Cow/calf profit dropped from $438 per cow/calf in 2015 to only $119 per cow/calf in 2019. So far this year, live cattle prices went down from $120 per hundredweight in January to $102 at the start of March and dropped to $87 at the start of the pandemic — the lowest live cattle price since 2009.
Yet inversely, beef prices at the grocery store are rising. What’s the problem here?
Global meatpackers are the problem, both before and during times of crisis.
Right now, four meatpackers control more than 80% of all finished beef cattle — JBS (Brazilian), Tyson Foods, Cargill and National Beef Packing (also Brazilian).
Cattle prices before the pandemic were similar to the prices producers received in 2012, when a pound of beef sold at the grocery store for $4.60. Now the price is about $6 per pound. In eight years, packer consolidation has added $1.40 per pound of profit for beef — about a 30% increase — while paying U.S. cattle producers the same or a lot less.
Global packers' control over both the producer’s price (decreasing) and consumer's price (increasing) results in increased profits for them, while cattle producers are having a difficult time staying in this market and consumers are struggling to make ends meet. This isn’t capitalism, it is monopolistic control.
The National Cattleman’s Beef Association, an organization that operates from mandatory taxes paid by cattle producers (checkoffs) and lobbies for the meatpackers, urged relief for cattle producers, stating: “While the effects of COVID-19 will be felt across the country, we must ensure we avoid permanent, fundamental changes to the workings of the American cattle market.”
But tens of thousands of Missouri cattle producers and hundreds of thousands of U.S. cattle producers know that we need fundamental change and need it now. NCBA is again trumpeting the narrative of the meatpackers, not the cattle producers or beef consumers. Without changes, U.S. cattle producers will be put out of business, and vertical integration will consolidate the industry more, causing lower prices for U.S. cattle producers and continued higher prices for consumers.
Because of the commitment of family farm-driven organizations, some U.S. senators are listening. U.S. Sen. Mike Rounds, R-S.D., announced a three-part plan that includes immediate relief for cattle producers who are being “unfairly harmed" by COVID-19 market disruption, supporting efforts to reinstate mandatory country of origin labeling and urging a federal investigation into allegations of anti-trust violations by meatpackers.
Rounds said, “The reality is there’s an inverse correlation between the producer’s price and the consumer’s price. If the Department of Justice finds no violations, then the statutory environment of the industry must be reconsidered because the status quo isn’t working.”
The future of the independent cattle producer is on the line, and Rounds gets it. Now our elected “representatives" need to do something about it. Call your senator.
Darvin Bentlage is a Barton County cattle producer and member of the board of directors of the Missouri Rural Crisis Center.