Economists to Cattle Ranchers: Stop Being So Emotional About the Monopolies Devouring Your Family Businesses (1 Viewer)

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    SaintForLife

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    Agricultural economists manipulated data to block Congress from acting on high beef prices and the destruction of independent cattle ranching. Why? Because they think monopolies are good.​


    Last week, there was what should have been a historic hearing in the House Agriculture Committee, with the goal of reforming America’s cattle ranching system. The first witness was a Republican Senator trying to persuade the House members to adopt his legislative initiative. “My name is Chuck Grassley,” he said, “And I’m a farmer from Butler County, Iowa.” Grassley’s homespun rhetoric disguised a sophisticated and longstanding campaign to address a crisis in the beef industry, and more broadly, our food system at large.

    To consumers, this crisis appears as high meat prices, with costs for beef up 12% this year alone. “I've never seen it like this in all the years I've been doing this," said Bob Strupeni, a butcher in San Francisco who has been working in the industry for 44 years. Higher meat prices are responsible for roughly half the annual increase in food prices, and food inflation is not only stretching household budgets, but has created a serious political problem for the White House. In September, the Biden administration attacked the industry over high prices, calling for an end to “pandemic profiteering.”

    To cattle ranchers, who actually sell the cows to packers that are turned into beef, the crisis is not high prices, but low prices. They aren’t getting very much for their cattle. This is weird, because, normally, beef and cattle prices move in tandem - the current high beef prices should result in high cattle prices. But since 2015, the ‘meat margin’, or the spread between the prices ranchers get for their cows and the prices consumers pay at the supermarket, has widened dramatically. Despite high consumer prices, independent ranchers are losing money, and going out of business. “If we don’t get some of these problems fixed quickly, we won’t have any independent ranchers in this country,” explained Oklahoma Farmers Union president Scott Blubaugh.

    Why are there high prices to consumers and low prices to cattle ranchers? Grassley had an answer. “The four major beef packing companies control 80% of the cattle industry,” he told the House members. And they are what he called “a chokepoint” for the entire sector. In other words, follow the money. In the beef industry, it’s not Amazon, Apple, Google, and Facebook suppressing business, but “the Big Four” - Tyson’s, JBS, Cargill and National Beef, who control 85% of the market (and more in some regions).

    Grassley’s chokepoint comment is right; for every dollar Americans spend on food, only 14.3 cents goes to the farmer. And much of the rest of it goes to the middlemen. JBS, for instance, paid out a record $2.3 billion in dividends in 2020, and plans to increase that by 75% this year, even as cattle producers leave the industry
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    Very informative and interesting article which is an important discussion to have with how monopolies have so much control while Congress looks the other way.
     
    Let’s go back to locally grown produce and butchered meat. Our country would be better off if food production went back to 50 years ago.

    The price of something isn’t all it costs.
     
    Let’s go back to locally grown produce and butchered meat. Our country would be better off if food production went back to 50 years ago.

    The price of something isn’t all it costs.
    I agree. You ever seen a corporate feed lot? It's miles and miles of cows that are covered in their own shirt being force fed corn - something cows were never meant to eat. No grass to be found at all. Don't get me started on the meat industry in this country. Just remember, every time you have a tasty McDonald's burger, chances are there is meat from up to 1,000 or so cows per patty.
     
    This isn’t just happening to cattle ranchers, it’s happening all over agriculture. It’s getting harder and harder for any small farmers to get by. I wish Congress would look at that instead of fighting over raising the debt ceiling. A whole lot of the states that are experiencing these agricultural problems have Republican representatives that are doing nothing about it.
     
    The middle men have strangled a lot of things. Meat packers, food producers, lumber, shipping in general. They have gotten to that sweet spot where essential goods have to go from them, and they have the control to charge as they wish. The dividends have become the driving force in our economy.
     
    Well it is the same with every industry or any job for that matter. All it takes is a guy with tons of capital to screw up the game to favor them and the rest get shafted including employees. If you are making bank doing spray foam insulation somebody with more capital and connections is coming after your money. That is free market I agree. It goes to a whole level when you get laws written to help you kill your competitors like h2b labor laws or political help gets you exactly what you need to set up shop to run others out of business.

    Where was all the outrage when AutoZone ran out mom and pop auto parts stores? Where was it when Walmart stole entire areas of full time employment by running out mom shops of all kinds?

    I guess it takes ground beef prices to get some people to notice how stuff really works.
     
    Let’s go back to locally grown produce and butchered meat. Our country would be better off if food production went back to 50 years ago.

    The price of something isn’t all it costs.
    I have to disagree. Capitalism and mass production tends to dramatically decrease the pricing of goods. It is an amazing one can get a hamburger for so little money.

    Imagine if you had a few cows in your backyard and wanted to make hamburger meat. That would be a monumental task and you would surely have to charge a very high price for the burgers. The mom and pop shop concept works great, but mass production reduces overall pricing and the masses benefit.
     
    Well it is the same with every industry or any job for that matter. All it takes is a guy with tons of capital to screw up the game to favor them and the rest get shafted including employees. If you are making bank doing spray foam insulation somebody with more capital and connections is coming after your money. That is free market I agree. It goes to a whole level when you get laws written to help you kill your competitors like h2b labor laws or political help gets you exactly what you need to set up shop to run others out of business.

    Where was all the outrage when AutoZone ran out mom and pop auto parts stores? Where was it when Walmart stole entire areas of full time employment by running out mom shops of all kinds?

    I guess it takes ground beef prices to get some people to notice how stuff really works.
    If foreigners can built a product for much less there is no point in manufacturing the product locally . That is capitalism 101. The consumer benefits, but the local builder goes out of business. Competition increases quality and decreases prices.
     
    I have to disagree. Capitalism and mass production tends to dramatically decrease the pricing of goods. It is an amazing one can get a hamburger for so little money.

    Imagine if you had a few cows in your backyard and wanted to make hamburger meat. That would be a monumental task and you would surely have to charge a very high price for the burgers. The mom and pop shop concept works great, but mass production reduces overall pricing and the masses benefit.
    The price of something isn't all it costs.
     
    I have to disagree. Capitalism and mass production tends to dramatically decrease the pricing of goods. It is an amazing one can get a hamburger for so little money.

    Imagine if you had a few cows in your backyard and wanted to make hamburger meat. That would be a monumental task and you would surely have to charge a very high price for the burgers. The mom and pop shop concept works great, but mass production reduces overall pricing and the masses benefit.

    Right up until they don't - like now.
     
    If foreigners can built a product for much less there is no point in manufacturing the product locally . That is capitalism 101. The consumer benefits, but the local builder goes out of business. Competition increases quality and decreases prices.
    That has exactly not a damn thing to do with my post.

    My post was about huge chains running out good small businesses. After they do they own market and set the price for all. You know just like the cattle industry
     
    The other thing that is coming back to bite us right now is all the “just in time” inventory models. We’ve all heard ad nauseum about their efficiency and so on. But when your supply chain has hiccups, you catch pneumonia. So where’s the efficiency now?
     
    The other thing that is coming back to bite us right now is all the “just in time” inventory models. We’ve all heard ad nauseum about their efficiency and so on. But when your supply chain has hiccups, you catch pneumonia. So where’s the efficiency now?
    You sure have a lot of excuses now that Biden is President.
     
    Lol, yeah, because Biden is the one who decided we should all use “just in time”. You are nothing if not totally predictable. It’s pretty funny.
     
    Lol, yeah, because Biden is the one who decided we should all use “just in time”. You are nothing if not totally predictable. It’s pretty funny.
    You are so entrenched in the liberal media bubble that you don’t even realize how much you are pushing Democratic talking points.
     

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