Since 1980 the number of beef operations has dropped from 1.6 million to 950,000. Cattle farmers ranchers now receive 43% of the retail value of a steer compared to 62% in 1980. This is mostly because the big five beef packing houses have done exclusive “deals” with auction houses that hide true costs and profits.
“As this market has become more consolidated and vertically integrated for efficiency’s sake it lends itself to unfair practices that are not particularly transparent,” the Obama Agriculture Secretary Tom Vilsack recently said.
The goal, he said, is to promote “a fair and more transparent relationship between the folks on the farm and the businesses that are packing and processing what’s raised on the farm.”
From the New York Times:
“Mr. Vilsack said the rules could increase the payments farmers receive for their livestock or poultry, but added that those higher costs would not necessarily be passed on to consumers, who might benefit from increased competition.
“The regulatory move comes as the Agriculture and Justice Departments have been holding a series of public workshops to discuss allegations of anti-competitive behavior in agriculture.
“In an outline of the proposed rules, the U.S.D.A. said the courts had set an unreasonable standard. It called for “judicial re-examination” of the issue in light of specific examples of unfair practices spelled out in the new rules.
“We’ve been fighting this bear forever and we finally got a breakthrough,” said Fred Stokes, executive director of the Organization for Competitive Markets, a group that advocates for small farmers and livestock producers.
“The new rules would also change industry practices.
“They would bar cattle dealers from acting as exclusive buyers for more than one meat packer in order to keep packers from sharing information on pricing, which could lead to collusion to keep prices down.
“They would enhance market transparency by requiring processors to submit to the U.S.D.A. samples of contracts they offer producers. “