This story comes courtesy of M.D., and it's an indication that the puchback has begun in earnest. Ranchers, fed up with rising prices of meat at the grocery store, while their own sales prices fall, have had enough, and decided to open their own meat processing plants and compete with "Big Agribusiness":
Here's the gist of the story:
DES MOINES, Iowa — Like other ranchers across the country, Rusty Kemp for years grumbled about rock-bottom prices paid for the cattle he raised in central Nebraska, even as the cost of beef at grocery stores kept climbing.
He and his neighbors blamed it on consolidation in the beef industry stretching back to the 1970s that resulted in four companies slaughtering over 80% of the nation’s cattle, giving the processors more power to set prices while ranchers struggled to make a living. Federal data show that for every dollar spent on food, the share that went to ranchers and farmers dropped from 35 cents in the 1970s to 14 cents recently.
It led Kemp to launch an audacious plan: Raise more than $300 million from ranchers to build a plant themselves, putting their future in their own hands.
Crews will start work this fall building the Sustainable Beef plant on nearly 400 acres near North Platte, Nebraska, and other groups are making similar surprising moves in Iowa, Idaho and Wisconsin. The enterprises will test whether it's really possible to compete financially against an industry trend that has swept through American agriculture and that played a role in meat shortages during the coronavirus pandemic.
Consolidation of meatpacking started in the mid-1970s, with buyouts of smaller companies, mergers and a shift to much larger plants. Census data cited by the USDA shows that the number of livestock slaughter plants declined from 2,590 in 1977 to 1,387 in 1992. And big processors gradually dominated, going from handling only 12% of cattle in 1977 to 65% by 1997.
Currently four companies — Cargill, JBS, Tyson Foods and National Beef Packing — control over 80% of the U.S. beef market thanks to cattle slaughtered at 24 plants. That concentration became problematic when the coronavirus infected workers, slowing and even closing some of the massive plants, and a cyberattack last summer briefly forced a shutdown of JBS plants until the company paid an $11 million ransom.
Now why am I blogging about this story? It's hardly our normal fare of geopolitics, financial cabals, corporate criminals, high jinx in space, or strange stuff occurring in Antarctica. I suspect there's more going on here than is perhaps being reported, or for that matter, that these ranchers are saying. One of the things that I suspect they're not saying is that they are concerned with two trends, the second of which is the unstated motivation: (1) the centralization of the meat packing industry, a trend paralleling the growth of big agribusiness in general, as the article itself states, and (2) the corruption of the food supply, in this case, by advocates of synthetic (and even three-d printed) meat, such as Baal Gates. We've blogged many times in the past few years about big agribusiness and what GMOs have done to the food supply, particularly in the United States and Europe. Centralization will make it all the easier for big agribusiness to force people away from real meat to synthetics, thus putting these ranchers out of business. Think Greta Thunberg here, shrieking "how dare you!" to the ranchers, with Baal Gates in the wings, urging her on.
My suspicion is that these ranchers intend to fight the trend towards more centralization and in the process restore public confidence in the food supply, and they can only do this by being involved in the entire chain, from raising, slaughtering, cutting, packaging, and distributing their product independently of the "big four" packers. That is to say that there are corollary implications here if my reading and high octane speculation are correct: alliances and distribution. If that one unspoken motivation for the emergence of these smaller sized meat packing plants is indeed correct, then watch for alliances of a regional nature to form between independent farmers and ranchers, and as these emerge, the creation of regional distribution systems to parallel the in-house distribution that the major meat packers such as Tyson already possess.
In short, this is in my opinion good news, as people take back more and more local control. I know that, if my choice in the meat department is something from Tyson, or something from XYZ Meats located in my own or a neighboring state with local meat, along with similar locally or regionally grown produce, what my choice will be.
See you on the flip side...