As two farmers from rural America, we know that many folks who live in urban centers may be unfamiliar with how meat goes from farms and ranches in Montana and Iowa to grocery stores in New York or Los Angeles.
But it requires only a brief look under the hood of the beef supply chain to diagnose the grave crisis currently facing American farmers and ranchers, and the growing threat of shortages for every American family who buys meat at the grocery store.
Beef begins its journey through the supply chain at one of our nation’s cow-calf operators, who raise cattle for the first nine months of the animal’s life before transferring them to a feeder for fattening. When a cow is ready to harvest, they are taken to a processing facility—or meat packing plant—where they are slaughtered and packaged before the beef is shipped to grocery stores or exported.
But in recent decades, the packing industry has become dangerously consolidated. Currently, only four large corporations control 80% of America’s meat processing capacity, running massive processing plants and industrial feedlots.
These corporate giants use their market share to drive down cash, or “spot,” prices for cattle and then use those depressed prices to set formulas to buy cows from independent farmers, ranchers and feeders for dirt cheap, all while raising meat prices at the grocery store.
And this problem started long before the pandemic, which has exposed the dangers of this consolidated industry by infecting thousands of plant employees, shutting down a quarter of our nation’s meat processing capacity, making it more difficult for families to find meat at the grocery store, and jeopardizing our nation’s food supply chain.
The consequences are real. In the past 20 years, American families have seen meat prices more than double while prices ranchers are getting for their cattle have risen less than half that. You don’t need to be an economist to know that when you have only a few corporations determining prices and the price at the farm gate is going down but the price of packaged beef is going up, you’re not dealing with a capitalistic system.
Now the pandemic has brought the industry to a crisis point. If the federal government doesn’t act fast to help stabilize the market, America’s small and independent cattle producers will go extinct. That means more industry consolidation, higher prices at the grocery store, economic destruction in rural America, and a vertical food supply chain even more easily crippled by a single accident or disaster.
That’s why we’ve introduced legislation to mandate the large packers purchase 50% of their cattle with “spot” pricing, which will make it harder for corporations to manipulate and depress cattle prices, and give cattle producers more opportunity to receive fair returns for their product.
This won’t solve the problem entirely, but it will help to provide badly needed relief to folks who are being squeezed by imbalanced markets and corporate greed.
These cow-calf operators and small and medium-sized feeders are the backbone of our nation’s food supply and the lifeblood of our economies in rural America.
As farmers ourselves, we know producers don’t want more regulation and they certainly don’t want a bailout. All they want is the market to work, and everything from the cost of meat at the supermarkets in Manhattan and Brooklyn, New York to the livelihoods of farmers and ranchers in Manhattan, Montana and Brooklyn, Iowa depend on the Senate taking swift action to make sure it does.
—Sen. Jon Tester is a Democrat from Montana; Sen. Chuck Grassley is a Republican from Iowa.
