WHERE’S THE BEEF? Smaller Meat Packers Needed to Offset ‘Covid’ Impact, Bolster Meat Supply

BeefCentral.com Photo

IN-DEPTH / By M. Samuel Anderson
AWN Editor

Bill Bullard, who’s CEO of the meat-industry advocacy group R-Calf USA, based in Montana, is one of the top sources for providing the “skinny” on how the meat industry has been “skeletonized,” as he put it.

For example, over 700,000 U.S. cattle producers, he said, are dependent on the meat packing plants of only four monopolistic meat packing companies: Tyson, JBS, Cargill and Marfrig (which bought out the National Beef Packing Company).

And that goes a long way toward explaining reports of meat shortages in grocery stores in North America, especially in the U.S., that are being blamed on Covid-19.

However, the bottom line is this: Although Covid-19 reportedly caused the closings or slowing down of  production at meat-packing plants—as workers were sent home amid word that the virus had infected some of them to whatever degree—that is not the primary cause of meat shortages at the stores.

The chief factor evidently is that the “Big Four” meat-packing companies have long sought to dominate the North American market, especially in the states. And over the decades that has led to the current situation where smaller, more numerous slaughterhouses/meat-packing plants have been forced out of business.

That, said Bullard, led to a lack of capacity and resiliency. So, when Covid-19 came along, it simply aggravated a preexisting problem and spurred it into the open.

After all, since those four companies and the limited number of packing plants they own are the only available avenues when it comes to ranchers processing their “harvest,” a “bottleneck” is inevitable when a shutdown or slow-down comes along, regardless of the cause.

“Only now is America waking up to the fact that, for  many decades, we’ve ignored the national food security interests of Americans; we displaced what used to be a family-farm system of agriculture that had millions of dis-aggregated producers. And you had tens of thousands more feed lots for the cattle industry, and you had hundreds more meat-packers scattered all across the United States. That was inherently a robust and resilient system that would not be subject to a crisis like we’re dealing with today, because there would be smaller, and more of, the processing facilities,” Bullard explained.

Thus, the meat sector of the traditional family farm system has been turned over to multinational corporations over the past several decades.

“We’ve allowed them to shape the entire food supply chain for meat products, from birth to plate, or egg to plate, to benefit the multinationals’ bottom line. And that ignores the national food security interests of this country. So, we have highly centralized the meat-packing industry. They now have huge monolithic plants so large that if just one of them slows down or if one of them closes, it creates a backup for the live cattle supply chain. And it prevents the distribution chain to the consumer from functioning properly. What we’ve done is we have ‘skeletonized’ our food production, processing and distribution system, and we’ve done so in order to meet the desires of the global, multinational meat-packers,” Bullard said.

Amid this “wake-up call,” there’s a realization that the U.S. should have been enforcing its anti-trust laws to prevent a meat monopoly, Bullard continued, while stressing that this merger-mania has enabled the Big Four to control 85% of the U.S. meat market.

In terms of pork, he said nine out every 10 U.S. hog producers who were in business a generation or two ago are now non-existent—from 668,000 participants down by 90% to 68,000.

“We’ve lost 40% of our cattle producers, and 80% of our dairy farmers,” he added, while emphasizing that when borders are totally ignored and production is seen purely on a global scale with highly vertical supply chains, it leads to “an absolute, abject failure” in terms of meeting national food-security needs. That can affect any country: The U.S., Canada, etc.

Furthermore, Bullard estimates that the meat-packing industry is the most concentrated of all industries in the states, be they food industries or any other kind of industry. He’s hoping the U.S. Congress will review this “vertical, centralized” supply chain and begin to decentralize it.

“We just sent a letter to [President Trump] and to the leaders in Congress, asking for a review, to determine if such a decentralization and de-monopolization is now necessary,” Bullard said.

While the U.S. Congress itself is on a Covid-19 slowdown, R-Calf is also part of a class-action lawsuit in Minnesota’s Federal District Court against the Big Four packers, filed a year ago before Covid-19 came along.

The suit argues that these packers have artificially depressed prices “by colluding in violation of the law,” Bullard went on to say.

Meanwhile, he said there is an ongoing investigation into this tight control of the meat marketplace. The probe is being done by the U.S. Department of Agriculture, the Federal Trade Commission and the Justice Department. The lawsuit was filed because, prior to its issuance, the probe seemed to be stalling in terms of enforcing laws already on the books.

“Oral arguments are scheduled for June 8 in Minneapolis, Minnesota,” Bullard added about the lawsuit.

Beyond the lawsuit, R-Calf’s core goal is to achieve mandatory country-of-origin labeling on beef and pork, the only two items, food or non-food, that lack such labeling.

Bullard said R-Calf’s view is that all the imported meat coming into the U.S. from Canada, Mexico, Namibia (Africa), South America, New Zealand and several other places is indistinguishable (from the consumers’ vantage point) from American-raised beef, and consumers simply should know what they’re buying, as with any other product. And that would help level the playing field, since the Big Four are accused of leveraging cheap foreign labor and other loopholes with which to undercut U.S. producers in an anti-market, unethical manner that origin-labeling would help address.

That labeling was implemented, in part, in 2009, and it was fully applied in 2013, requiring all beef to be labeled regarding “where the animal was born, raised and slaughtered, but Congress repealed in it December of 2015,” Bullard said, adding that the big packers filed a lawsuit to help force the demise of this labeling.

Other troubling developments including large quantities of milk being dumped out, poultry and pigs being euthanized instead of being processed for food, and produce being plowed under due to worker shortages and/or backed-up processing and distribution chains amid Covid-19. Claims of potential famine are not unheard of, due to the unrest and problems brought on by government responses to Covid-19 across the world.

Amid the widely varying views on Covid-19, some on Facebook have said that responding to Covid-19 by reducing the food supply is like “shooting yourself in the head to cure a headache.”

“We do have cold storage in [the U.S.], but the problem is, if you have four major packers slaughtering 100,000 less [cattle] per week, and you back that up three or four weeks, then you have a half-million head of cattle that have to go somewhere. That’s why I say we need to get these regional packing houses up and going—these smaller houses are fighting the government, which does not want to give them any licenses to slaughter,” said Shad Sullivan, a Texas and Colorado rancher, who’s R-Calf’s Region 5 director.