Corporatization of U.S. agriculture costs producers billions

In early 1999, I wrote a column about lions and gazelles.

More precisely, I wrote a column on how, in the 1990s, American livestock farmers had become “gazelles… in the brutal world of global agriculture.”

What that meant was “every morning the gazelle awakens knowing it must run faster than the fastest lion to live to see tomorrow” while “the lion awakens knowing it must run only as fast as the slowest gazelle….”

As such, that era’s low-profit hog, cattle, and dairy sectors were slow, easy targets for packers and processors who, unchecked by government, were integrating “producers” — previously known as farmers — into their “supply chains” through contracts that ensured supplies at capped prices.

That meant “fatter lions in 1999.”

The spark for the column came in January 1999 when U.S. Senate ag committee chair Richard Lugar, a Republican from Indiana, during a hearing on concentration in agriculture urged his colleagues to keep their noses out of Cargill’s recent offer to buy competitor Continental’s grain business.

The buyout, declared Lugar, “is a question more for lawyers, not legislatures.”

Turns out, Lugar, who died in 2019, is right. Finally.

Some of the biggest ag-business lions — Tyson Foods, Dairy Farmers of America, Bayer, Pilgrim’s Pride, Kroger, Cargill, JBS USA, and even the U.S. Department of Agriculture — now face a blizzard of price-fixing probes and other market-related litigation.

In fact, as a friend pointed out on Twitter shortly after Thanksgiving, “turkey is now the only meat in U.S. right now not under investigation for price-fixing.”

That should infuriate all Americans for two reasons: first for what it says about today’s largely dysfunctional livestock and poultry markets and, secondly, that it has taken 20 years for end users to confront Big Meat over how it uses its sledgehammer market power to suck unearned profits out of both livestock growers and meat buyers.

Equally infuriating is how Lugar’s edict for legislatures to stay out of Big Agbiz’s biz has remained in effect despite mountains of evidence that the corporatization of key ag sectors has cost farmers, ranchers, rural America, and consumers billions of dollars and an untold number of jobs.

And that’s on top of what boneheaded farm policies advocated by AgBiz—like 1996’s Freedom to Farm (F2F) — cost taxpayers. (From 1997 to 2002, F2F cost taxpayers $122 billion, or three times its projected cost.)

Many of these policies also took down antitrust fences and, shortly thereafter, consolidation in ag inputs, production, and processing went into overdrive.

The move was so swift that in one generation, according to research published Nov. 19, “the midpoint of sale” — where half of U.S. herds were on each side of the divide — in hogs “has increased from 1,200 to 51,300 head and, in dairy … from 80 to 1,300 cows” from 1987 to 2017.

This industrialization hasn’t helped rural America: “Agrifood consolidation reduces farmer autonomy and redistributes costs and benefits across the food chain, squeezing farmer incomes.”

Recently, a friend telephoned to discuss how rural America had become so deeply, almost savagely, split on existential issues like climate change and resource conservation. My reply was a lengthy letter that, I’m pretty sure, didn’t answer his questions or allay his fears.

Two weeks later, however, I pulled a slim volume of Wendell Berry essays off a shelf and found a much better answer in far fewer words.

“Political democracy,” wrote Berry in the foreword to his 1995 book, Another Turn of the Crank, “can endure only as the guardian of economic democracy… A democratic government fails in failing to protect the integrity of ordinary lives and local communities.”

That wisdom bears repeating: we will continue to fail if we continue to fail “to protect the integrity of ordinary lives and local communities.”

Just ask a gazelle — if you can find one.

Alan Guebert is an agricultural commentator from Illinois.

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