Small ranchers say Biden letting them get squeezed

Posted 113 days ago

From THEHILL.COM

America’s independent cattle ranchers say major corporations in the beef industry are squeezing them out — and that the Biden administration is letting it happen.

President Biden issued a sweeping executive order in July 2021 directing federal agencies to address anti-competitive behavior by big meat-packing companies.

But farmers say Biden hasn't gone far enough to rein in larger meat-packing companies, a handful of which control the bulk of the hog, cattle and chicken markets.

Unless regulators break those companies up, farmers say, the administration's current reforms won’t have much long-term effect.

“We want to bring some semblance of competition back to cattle market,” said Tim Gibbons of Missouri Rural Crisis Center, which represents 5,600 farming families.

“Missouri has 50,000 cattle producers, but 80 percent of beef packing is controlled by four companies," Gibbons said, adding while Biden has spoken out on some of the biggest issues, "nothing has changed."

In particular, ranchers point to an Obama-era legal reform that allowed meatpackers to label any beef product — regardless of where the cattle were raised — as "Product of USA" if it was processed in the country.

This allowed big meatpacking companies to bury smaller entities under an avalanche of cheap, foreign-raised beef while labeling it American-made, said Missouri rancher Darvin Bentlage.

"That pound of ground beef may say ‘Made in the USA,’ but it could be from five or six countries," Bentlage said.

And while Biden's order contained language to close the foreign-raised beef loophole, small ranchers say they have a hard time trusting federal regulators to carry it out.

“The industry, because of its economic power, is using political power to chip away at regulations. All they want is time to drive the independent cattleman out of business,” said Austin Frerick, deputy director of Yale’s Thurman Arnold Project, which focuses on antitrust enforcement.

The American beef and poultry industry has a long history of shake-ups, with the farm foreclosure crisis and a consolidation in the meatpacking industry in the 1980s ushering in an era of regional meat monopolies, according to Frerick.

Over the 1990s and 2000s, these conglomerates set up a model in which farmers became contractors, raising company-owned animals on company-owned feeds in enormous sheds built with government-backed loans.

This structure first came to chicken processors like Tyson in the Southeast, then pork processors like Smithfield. It went “on steroids” in 2002 when the U.S. Department of Agriculture (USDA) opened up the Environmental Quality Incentives Program to pay for the waste pits of hog farms, Bentlage said.

That implicitly subsidized a glut of cheap protein that forced small producers out of business, Frerick said.

“It wasn’t like hog farmers going bankrupt all of a sudden,” he said. “You just see margins shrink and shrink and shrink.”

A similar process happened in neighboring Missouri, which had 23,000 hog producers in 1985. Three decades later, that number was at 2,600.

“And that wasn’t because 20,000 people decided to get out,” said Gibbons. “Corporations took over the marketplace, production and processing and put all those family farmers out of business."

By 2012, the main meatpacking companies — Tyson, Cargill, Smithfield and JBS — had maneuvered the nation’s chicken, pork and dairy farmers into a relationship “worse in certain respects than sharecropping,” as Lina Kahn, now the Biden-appointed chair of the Federal Trade Commission, wrote in an article in Washington Monthly that year.

During the Obama presidency, the meat industry lob... (Read more)