As the weakened farm economy continues to take a toll on family farmers and ranchers, the National Farmers Union in the United States is criticizing meatpackers for driving down prices for independent beef producers. Data released last week showed that family cow-calf producers are losing nearly $300 per cow while the packers’ profit margins have increased by approximately $75 per cow, compared to a year ago.
“We’ve seen a lot of family cattle operations go out of business in the last 30 years because the packers have an enormous amount of power and control over the beef market. Beef production is at an all-time low, but beef prices continue to decline faster than they have in history. Yet, the packers cash profit margins have been on the rise. The situation is incredibly unfair for family producers,” said NFU President Roger Johnson.
Industry consolidation has left control over 85 percent of the beef market in the hands of four beef producers – Cargill, Tyson, JBS and National Beef Packing Co – and the lack of transparency and competition has created a volatile market for family farmers, Johnson explains. Through their domineering market control, the “meatpackers are increasingly dictating the terms of production, marketing, and pricing for cattle producers.”
“Think about how long a rancher spends raising a calf to weaning or slaughter weight, and the amount of money they lose, and compare that to the time it takes for the packer to kill, cut up and package the meat and the amount of profit the packer makes. Packers have enormous market power and they use it against us, including by importing meat from other countries to drive our prices even lower,” he added.
In December 2015, Congress repealed the country-of-origin labeling (COOL) requirements for beef and pork, allowing meatpackers to import cheaper beef products and not have to identify where the animal came from on the package label.
“Unfortunately, our policies favor the international meatpackers instead of the family cattle ranchers. We must give producers the tools they need to compete, whether through correction of inadequate trade agreements, by reinstating COOL or amending mandatory price reporting laws. Congress needs to put the interests of America’s family farmers and ranchers before the interests of multinational corporations,” Johnson concluded.