As I ventured to the local supermarket and saw empty shelves, as a cattleman I noticed that ground beef was flying out of the store. I talked to the store clerks about their supply and prices and was told their cost for the next shipment of beef is going to be higher.
For independent cattle producers, the spiral of downward 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 to $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? The global meatpackers are the problem, both before and during times of crisis.
Right now, four meatpackers control over 80% of all finished beef cattle. JBS (Brazilian), Tyson, Cargill and National Beef (Brazilian)
Cattle prices before the pandemic were similar to the prices producers received in 2012. In 2012 a pound of beef sold on the grocery shelves for $4.60. Now the price is about $6 per pound. In the last 8-years, meatpackers have added $1.40 per pound of profit for ground beef, a 30% increase; while paying U.S. cattle producers the same or a lot less.
The global packer’s control over both the producer’s price (decreasing) and consumer price (increasing) results in increased profits for the them, while cattle producers are having a difficult time staying in the market and consumers are struggling to make ends meet. This isn’t capitalism, it monopolistic control.
The National Cattleman’s Beef Association, an organization that operates from mandatory taxes paid by cattle producers (checkoffs) yet lobby’s 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 changes to the American cattle market, and we need them now. NCBA is again trumpeting the narrative of the meatpackers, not cattle producers or beef consumers. Without changes, U.S. cattle producers will be put out-of-business and vertical integration will consolidate the industry even more, causing lower prices to U.S. cattle producers and continued higher prices for consumers.
Because of the commitment of family farm driven organizations, some Senators are listening. Senator Mike Rounds, R-SD, announced a three-part plan.
The plan includes immediate relief to cattle producers who are being “unfairly harmed due to the 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.
Sen. 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 Senator Rounds gets it. Now our elected “representatives” need to do something about. Call your Senator.
—Darvin Bentlage is a Barton County, Missouri, cattle producer and Missouri Rural Crisis Center board member.
