Don’t let Big Meat slaughter the packer ban
Note: An earlier version of this post appeared briefly Friday. I pulled it down because of a misunderstanding involving a leaked document. I’ve deleted references to the document in this post, but hope to be able to post about it soon.
In the debate over the Senate ag committee’s farm bill version, a key facet has gotten lost in the shuffle: the so-called "packer ban," which would prohibit meat processors from also raising livestock.
Michael Pollan didn’t mention it in his recent NYT op-ed on the farm bill, and I neglected it as well in this week’s Victual Reality. Nor did Britt Lundgren of Environmental Defense mention it in her rebuttal to my piece, which I’ll be responding to over the next day or so.
But the packer ban is genuinely worth fighting for; and it will require a fight, because Big Meat is hauling out its big guns to try to mow it down.
Now’s the time to defend the packer ban against industry-funded attacks. Try talking some sense to your senator through the Capitol Switchboard (202.224.3121). Below the fold, I try to lay out why the packer ban must happen.
The big industrial-meat processors — Tyson, Cargill, Smithfield, and a few others — wield stunning power over meat production in the United States. First of all, they’ve essentially cornered the market. As this 2007 study (PDF) from University of Missouri researchers Mary Hendrickson and William Heffernan shows, the four biggest players slaughter 83 percent of cows, 66 percent of pigs, nearly 60 percent of chickens, and 55 percent of turkeys.
In antitrust theory, when the four biggest buyers collectively own more than 40 percent of a market, you’ve got sufficient concentration to harm sellers. In this case, the sellers are farmers, who are essentially forced to accept the prices and growing conditions dictated by the meat giants. But it gets worse. Not only do behemoths overwhelm farmers with their sheer size, but they also directly compete with farmers, further giving the conglomerates leverage on price.
Cargill, for example, is the nation’s second-largest beef packer, doing in 28,000 cows per day. And it’s also the nation’s third-largest producer of cows, stuffing some 330,000 cows every year into feedlots and gorging them on corn. (For good measure, Cargill operates as the nation’s second-largest animal feed — read, corn — mill, and owns a two-thirds stake in the world’s second-largest fertilizer producer. Talk about vertical integration!)
Smithfield Foods slaughters 27 million hogs every year, more than a quarter of the U.S. total. And it also raises 1.2 million hogs annually — more than any other single entity by a factor of three. Similar conditions hold sway in the poultry market.
With their so-called "captive herds," the packers gain significant advantages over independent family-scale or even medium-sized farms. Say hog prices start to inch up because, say, the ethanol boom has raised corn prices, and farmers want to pass those costs up the food chain.
Smithfield can buffer itself from these higher prices by holding off buying from the spot hog market for a while and leaning on its herd for slaughter for awhile. Since in many areas Smithfield is the only buyer around, independent farmers in that case have two choices: lower their prices, absorbing the higher costs in their already razor-thin profit margins; or not sell their hogs at all. And this relentless pressure on price forces farmers to either exit the business altogether or scale up, industrialize, and farm "on contract" with the big boys — which means essentially letting Smithfield, etc., dictate feeding decisions, etc. By doing so, hope is to makeup on volume what they’re losing on price.
Captive herds and contracts essentially explain the CAFOization of American meat. Iowa, the nation’s leading hog-producing state, tells the story. The state’s pork producer’s association informs us that the total number of hog farms plunged from more than 59,000 in 1978 to around 10,000 in 2002, an 83 percent drop. Over the same time span, the total number of hogs raised per year jumped from 19.9 million to 26.7 million. That means the average number of pigs per farm soared from 250 to more than 1,500. And production, which had been broadly distributed across the state, shifted to just a few counties. North Carolina, the nation’s No. 2 hog state, shows similar trends.
I doubt if the packer ban at this point could reverse these conditions. That would take robust enforcement of antitrust code by the federal government, which has responded the meat industry’s rapid consolidation by waving the cheerleader’s pompom. But the packer ban could seriously check growth of industrial meat and its ills, and give momentum to the effort nationwide to bolster alternative meat-production networks — ones based primarily on pasture, not corn, and that account for labor rights, animal welfare, and land stewardship, not just gross profit.