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The cartel that controls the US meat industry

221 points| armanhq | 2 years ago |statecraft.beehiiv.com

162 comments

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r3trohack3r|2 years ago

A reminder that Tyson is abusing the legal system to force people in the American south into working in their chicken plants for free: https://revealnews.org/article/they-thought-they-were-going-...

I don't know every brand that uses Tyson products, but when I discover something is coming from a Tyson factory I stop purchasing it.

wonderwonder|2 years ago

This is pretty awful. I can almost guarantee that if you look into the campaign donors for these judges the chicken farms will there. It reminds me of the judge that used to send kids to prison because he was getting a kick back.

https://www.nbcnews.com/news/us-news/judges-sent-children-pr...

Sometimes those we trust to enforce justice are the biggest criminals of all and we give them essentially unlimited power.

Abuse of power to this extent and the ruining of so many lives should be a death penalty offence.

rambojohnson|2 years ago

They produce around 20% of the beef, pork, and chicken in the United States. They also have a range of food products under brands like Tyson, Jimmy Dean, Hillshire Farm, BallPark, Wright, Aidell’s, and State Fair.

gjsman-1000|2 years ago

I find it more shocking that, despite the terrible reported conditions at the plant, most people stayed there because it was preferable to prison. If that is preferable to their prisons...

koolba|2 years ago

The taste is enough reason to never eat a Tyson chicken.

Sparkyte|2 years ago

If it was free how are the operating costs covered?

xnx|2 years ago

Another solid reason to boycott meat.

lowkeyoptimist|2 years ago

I only saw Simmons Food Inc here, does Tyson do it too?

phonon|2 years ago

This is horrific.

veave|2 years ago

>McGahey was 23 with dreams of making it big in rodeo, maybe starring in his own reality TV show. With a 1.5 GPA, he’d barely graduated from high school. He had two kids and mounting child support debt. Then he got busted for buying a stolen horse trailer, fell behind on court fines and blew off his probation officer.

Yeah, you weren't going to make it big either in rodeo or anything else.

prepend|2 years ago

I was really interested in the figure that shows prices going up while input costs decrease. But this doesn’t reflect all inputs just the price of meat procured. There are many other input costs, mostly labor.

So this diagram is really frustrating as it makes me want to reach a conclusion (wtf, what an unnatural difference) without giving me enough information to know anything.

It would be like showing that household grocery costs decreased while disposable income decreased and then writing an article about the relationship between those two while not revealing that rent increased at the same time.

In general, I don’t know if they answer properly if profits increased because of inflation or if inflation increased because of inflation. Since the cartel existed before the shift, I would like to know what they think made companies suddenly get greedier.

sct202|2 years ago

The author arbitrarily picked an outlier looking peak to start the graph vs consumer pricing to severely bias the graphs. May 2020 (graph 100 index) has a price index of 265, but April 2020 is 185 and Jun 2020 is 194.

https://fred.stlouisfed.org/series/WPU0221

*edit April not Feb

*Edit2: Linked wrong graph, but correct graph is like the same trend. Thank you for the correction.

Michelangelo11|2 years ago

> In general, I don’t know if they answer properly if profits increased because of inflation or if inflation increased because of inflation. Since the cartel existed before the shift, I would like to know what they think made companies suddenly get greedier.

That's my big question too with all this "greed driving inflation" discourse. I don't doubt it at all, in fact, from everything I see it seems like the likeliest story. But ... why now?

declan_roberts|2 years ago

Moving to the country has really opened up my eyes for food production, especially meat.

There are so many small farmers here that are basically shut out from the economy because of impossible USDA guidelines. And we're honestly supposed to believe that mega meat processing plants are somehow better for us? It's delusional.

Call your representative and ask them to support the PRIME act.

https://ij.org/initiatives/food-freedom/prime-act/

Trisell|2 years ago

100% this. As a small time farmer. I cannot butcher my own animals and sell them to anybody directly. I have to sell them "on the hoof" in a minimum size of a quarter of an animal and then have a custom butcher process the animal. I can't sell any of my meat directly to a person after it's butchered, or to a restaurant. I can only sell in those cases if I go to an FDA certified meat processor, which is 400 miles one way from my property. So essentially I'm limited to selling meat to either friends and family or shipping my animals 400 miles and paying $2 a pound in processing costs.

So no the Prime act isn't a way for corporations to go around the rules, it's so small guys like myself can sell meat to people without having to truck it 800 miles.

malcolmgreaves|2 years ago

Well, this is quite thinly vieled attempt to let corporations hurt people and make a profit doing it!

You've linked to a politically Republican organization's page, where they're promoting legislation that would let companies produce unsanitary and unsafe meat. Do you not understand that the USDA guidelines are (a) easily obtainable and (b) exist to keep people from getting sick or dying from unsanitary meat? Or do you just stand to individually profit from this legislation?

freejazz|2 years ago

lol what? I live in NYC and buy from small upstate farms from my butcher that only sells pastured meats... the USDA doesn't seem to be a problem for them at all

strictnein|2 years ago

Maybe the caffeine hasn't kicked in yet, but how can this be true:

> Tyson Foods, Cargill, JBS USA Holdings, and National Beef have gained control of roughly _85%_ of the total hog, cattle, and poultry processing market

If the bar chart that follows that has the following information:

> Percent of meat supply processed by the "big 4":

   - Beef: 73%
   - Pork: 67%
   - Chicken: 54%

bobbylarrybobby|2 years ago

Possible resolutions are the fact that the size of the processing market is measured in $, not percent of meat processed, as well as Simpson’s paradox.

Dig1t|2 years ago

RFK put out a video explaining how this consolidation occurred in the pork industry: https://twitter.com/RobertKennedyJr/status/16865387973102428...

It was basically a case of a politician, Wendell Murphy, who helped pass 28 laws making it illegal to sue a factory farm, then left office and went into partnership with Smithfield Foods, a Chinese-owned company (which according to Wikipedia was "the largest Chinese acquisition of an American company to date"). Smithfield and Wendell used the factory farming model to undercut and put out of business almost all of the smaller pork farms. They now control 80% of pork US production and put 28,000 independent farmers out of business.

I personally do not understand why China controlling 80% of pork production in the US is not a national security issue. But, that aside, this seems pretty bad for the country.

*Edit, I remembered the video wrong, they control 80% of pork production _in North Carolina_. They control 26% of all US pork processing and 15% of pork production. They also have been found guilty of price fixing: https://www.reuters.com/legal/pork-consumers-75-million-pric...

tyrfing|2 years ago

> It was basically a case of a politician, Wendell Murphy, who helped pass 28 laws making it illegal to sue a factory farm, then left office and went into partnership with Smithfield Foods, a Chinese-owned company

Said politician was in office (NC House/Senate) in the 80s, and his company was bought in 1999 by Smithfield Foods. Smithfield was bought by WH Group, a Chinese company, in 2013.

> They now control 80% of pork US production

This appears to be fiction. The closest I can find is that 6 large companies control 80% of the wholesale market, Smithfield being one of them.

corinroyal|2 years ago

I'm not sure I'd want to admit in public that I follow RFK Jr. If he said it, it's unlikely to be true.

Buttons840|2 years ago

The word "monopoly" implies one dominant company ("mono-" meaning one), but industries with 2 or 3 companies are still unhealthy for a few reasons.

First, it's pretty easy for 2 or 3 companies to price fix, which is against anti-trust laws.

Second, a healthy market requires that it be easy for new companies to enter the market and compete, and if there's only a few dominant companies, then clearly new competitors are not succeeding.

We need more anti-trust enforcement.

hnboredhn|2 years ago

I am not too in the weeds on this particular issue, but it seems not that crazy to me that "the biggest four companies" produce 55% of the US's chickens. Presumably that means there is much more than four who register in at above a couple percent nationally and possibly even at a local level different players. Its also for one market. While I eat a lot of chicken, I could substitute it for other foods or meats.

To be clear I think these companies would manipulate prices if they knew how and could get away with it, but having trouble seeing how "four companies control under 60 percent of one food's market" is that alarming. That seems like more competition than at any point in human history.

mandmandam|2 years ago

Our two political parties are a duopoly (at best).

They have used that position to build a huge moat against any possible third party gains for many decades.

So, enforcing anti-trust legislation would actually be kind of hypocritical of them, sad-lol.

arrosenberg|2 years ago

It's easier if you paint the company behavior as "monopolistic" rather than the company as being a monopoly.

hospitalJail|2 years ago

>We need more anti-trust enforcement.

The medical field is the most urgent on this matter.

Food prices are manageable. Healthcare prices are far far far worse.

acover|2 years ago

Is there a way to detect price fixing?

For example in a competitive market everyone has the same price. But the same is true with price fixing.

tamimio|2 years ago

“Oligopoly” is the word you are looking for, carried out by oligarch.

jvm___|2 years ago

I read a story of a Latino immigrant Mom who worked the night shift cleaning a slaughterhouse every night. Wet, slick surfaces and sharp objects everywhere.

The Mom was hired as a contractor through a third party company. She fell and was injured at work, because she wasn't an employee of the bigger company she wasn't entitled to any compensation or help, just fired from the third party company which also provided no assistance.

dragonwriter|2 years ago

Given both rules of property owner liability and workplace injury liability, she almost certainly was legally entitled to compensation by one or the other, or both, companies involved for damages (including future lost wages) from the accident.

Of course, companies claiming you aren't entitled to compensation right up until you show them they are unlikely to get away with that by bringing in state authorities (if applicable) or your own lawyers is... very much a cost avoidance technique that is used often in practice. Especially against the Latino immigrant community where even legal immigrants and naturalized citizens are still operating in a culture of reluctance to engage with government or legal process, employers know this and exploit it.

wombat-man|2 years ago

mmm, wouldn't she be able to go after the third party company?

systems_glitch|2 years ago

My family raises beef cattle on the side, mostly in the past it was just to help keep the property grazed down (it'll go fallow pretty quick if nothing is on it) and provide local higher quality, cheaper beef for folks in the extended family. At some point, my parents decided they wanted to try expanding the farm and actually selling the beef. They were shocked to learn that two guys control the local cattle markets and pay essentially "what they want" for anything and everything. Pretty much no one got more than $1/LB on the hoof for grass fed healthy cows.

They gave up and went back to a property maintenance sized herd after 10 or so years of that.

darrin|2 years ago

There's no broader market for beef? Is there a higher break-even point factoring in transport costs?

Michelangelo11|2 years ago

> (2) The Immigration System: that simultaneously enables BigAg to procure cheap migrant labor and can be weaponized to prevent that same migrant labor from organizing for or demanding humane working conditions.

The Jungle all over again ... apparently not much has changed in ~100 years. Fascinating.

zwieback|2 years ago

Article is about meat, why change the title?

dang|2 years ago

Ok, we've changed it now. Submitted title was "The Cartel That Controls the US Food System".

trostaft|2 years ago

The title appears to match the one on the article (unless they're doing some title fuzzing)?

Trisell|2 years ago

Amazing that they completely ignore the regulatory capture of FDA meat inspection. It is the largest barrier to disrupting the "big 4" for anybody to enter the market. Given the cost and complexity of running an FDA approved meat cutting facility, it makes it nearly impossible for small farms to enter the market and provide an alternative to the big 4.

Instead small farms such as myself are forced to do stupid things like sell the meat to somebody 'on the hoof' and then have it custom cut by a butcher, because getting the meat processed and cut at a FDA inspected facility, if you can get into one, adds $1-3 a pound. This also means I can only sell you a quarter beef or larger. Which most consumers don't have the money or the freezer space to do.

corinroyal|2 years ago

I feel for you. You might enjoy a book from a small farmer called "Everything I Want to Do Is Illegal" by Joel Salatin. He talks about the absurdity of ag regulatory capture and it's effects on small farmers. It's an inspiring call to arms.

algoatecorn|2 years ago

Food system is a technical term and is distinctly different than the meat industry, which it encompasses. These companies certainly do not "control the food system"

myshpa|2 years ago

That's debatable. If they're able to influence UN FAO and IPCC (among many others I'm sure), and they are, they kinda do.

https://qz.com/ipcc-report-on-climate-change-meat-industry-1...

The meat industry blocked the IPCC’s attempt to recommend a plant-based diet

https://www.researchgate.net/publication/352100490_Emissions...

FAO's work on emissions from animal agriculture may be influenced by the meat industry's interests, potentially affecting their recommendations on reducing meat consumption for environmental reasons.

https://www.pcrm.org/news/blog/meat-and-dairy-subsidies-make...

Meat and Dairy Subsidies Make America Sick

https://www.theguardian.com/science/2022/dec/09/academy-nutr...

Revealed: group shaping US nutrition receives millions from big food industry

https://www.salon.com/2022/11/11/the-meat-industry-is-borrow...

The meat industry is borrowing tactics from Big Oil to obfuscate the truth about climate change

https://www.americanprogress.org/article/why-the-farm-bill-m...

Why the Farm Bill May Be the Highest-Stakes Climate Fight Flying Below the Radar

naillo|2 years ago

Interesting to read this and think about how the future of AI might turn out if the google microsoft cartel comes into being like they're trying to.

dirtyid|2 years ago

Would US be an ag powerhouse without consolidated scale? IMO US in geopolitical position with respect to land resources that it doesn't need to be, but powerful cartels seem to pretty good at expanding US ag competitive advantages with respect to foreign polciy.

moomoo11|2 years ago

It would be better if people stopped eating as much meat.

greenie_beans|2 years ago

i thought centralized economies were communist?

ben_w|2 years ago

Planned economies are associated with communism, but they're also basically what all corporations do internally, including government owned "corporations" like the police and militaries.

Food gets massive subsidies in the west, because we really don't want shortages, and even massive subsidies are a really cheap way to do that, because most of the consumer cost of food is later in the supply chain than the production.

My gut feeling (I'm neither an economist nor a political student) is that while many small corporations competing with each other is an excellent way to explore the space of supply, demand, and technological changes, when you find a known-good solution it's probably better to merge them into one to get rid of the needless duplication — which happens naturally in capitalism, but then I'd go further and say the government should buy up the shares and take advantage of any dividends to (effectively) be a non-tax based revenue source.

hombre_fatal|2 years ago

Just more reasons to eat a plant based diet.

spacephysics|2 years ago

You should see the cartel Monsanto has on agriculture

This is just one more reason we should push for sustainable farming, including meat products.

livestock naturally bring nitrogen and other nutrients back into the soil when grazing. Then use that land to grow plants, move the animals where plants pulled the nutrients from the soil, rinse and repeat.

Also reduces the need for harmful fertilizers that impact the ecosystem

wil421|2 years ago

Wait until you hear about the real BigAg, the article’s companies only produce beef, chicken, or pork. Patented seeds and farm equipment you can’t repair yourself are a couple plant based diet issues. Not to mention chemicals and fertilizers are terrible for ecosystems.