Opinion: Missouri cattle producers are under threat

“A long time ago in a Congress far, far away,” an important antitrust law was passed to address extreme concentration in the U.S. meat industry. The Packers and Stockyards Act of 1921 was passed “to assure fair competition and fair trade practices, to safeguard farmers and ranchers ... to protect consumers ... and to protect members of the livestock, meat and poultry industries from unfair, deceptive, unjustly discriminatory and monopolistic practices.”

This fundamental law has not been enforced or strengthened to address the reality of today’s marketplace, specifically since the 1980s.

It’s been nearly three years since the largest corporate meatpackers were called before Congress to testify about excessive corporate consolidation in the meat industry, increased prices for consumers, low prices for livestock producers and record profits for themselves. However, that’s where it stopped and our elected representatives have done nothing to address multinational and foreign control of our cattle and beef markets, so the United States Department of Agriculture had to do it themselves.

On Oct. 8, the USDA announced it wanted public input on upcoming new rules to restore fairness in cattle markets in an advance notice of proposed rulemaking to address “price discovery and competition in markets for fed cattle.”

This proposed rule is aiming to strengthen the enforcement of the Packers and Stockyards Act and is an important and necessary step to help save independent family farm cattle producers from the fate of independent hog producers. In one generation, nearly all independent hog producers were put out of business (upwards of 90%, according to data from the USDA) due to a severe lack of antitrust enforcement. Another consequence: four corporations control 70% of the U.S. pork industry, and 50% is controlled by two foreign meatpackers, Smithfield (China) and JBS (Brazil).

Here are just a few examples of what you get when just a few multinational, billion-dollar corporations control almost all the beef in the U.S.:

• America is a net importer of beef. In 2023 alone, the United States imported 3.7 billion pounds of boxed beef and 2 million live cattle, according to the USDA.

• We don’t have the ability to know where our meat comes from. Mandatory country of origin labeling for meat was passed in the 2008 Farm Bill, and its implementation along with widespread drought led to a steady increase in prices paid to cow/calf producers culminating in the record profit of $518 per calf in 2014. At the behest of multinational corporate meatpackers and lobbyists, Mexico and Canada filed a complaint to the World Trade Organization arguing that our COOL law formed an illegal trade barrier. The unelected, bureaucratic and pro-corporate WTO agreed. In 2015, Congress repealed COOL and our right to know and choose U.S. beef.

For decades, cattle producers across Missouri and the United States have been organizing and advocating for open, fair and competitive commodity markets, ensuring a fair price for producers and consumers, resiliency in our food system and economic viability of independent family farms, rural communities and workers. Just in the past two years, we went to Washington, D.C. three times with Missouri Rural Crisis Center and other midwestern livestock producers to talk with our elected representatives and governmental agencies about the issue of captive supply and meatpackers’ use of Alternative Marketing Arrangements.

Over the last two decades, meatpackers significantly increased their use of Alternative Marketing Arrangements. AMAs are contracts that keep fed cattle off the spot market (i.e. cash market) and allow the four meatpackers that control over 80% of the U.S. cattle/beef market to suppress prices paid to fed cattle operations. These lower prices work through the system and also lower prices for small- and medium-sized cow/calf operations. In the last decade, upwards of 80% to 100% of cattle sales in some regions of the country are procured through AMAs.

Cattle production is the largest part of the U.S. agriculture industry. For independent cattle producers to continue to exist, prosper and pass our operations down to the next generation, we need strengthened and enforced antitrust laws, an open, fair and competitive marketplace and protections and safety nets.

The USDA is inviting stakeholders to submit comments on several options for increasing competition in fed cattle markets. The deadline to submit comments to USDA is Dec. 10. You can submit comments at Regulations.gov/docket/AMS-FTPP-24-0013/document.

Join us in helping “the force” be with U.S. independent cattle producers by submitting comments and demanding this important update to the Packers and Stockyards Act to start the arduous process of restoring competition in U.S. cattle markets.

Darvin Bentlage is a member of the Missouri Rural Crisis Center and fourth-generation Missouri cattle producer. Tim Gibbons is with the Missouri Rural Crisis Center, a statewide farm and rural membership organization that advocates for policies that support independent family farm operations. He can be reached at timgibbons@morural.org.