iStock / Lynn_Bystrom
For the last week, cattle ranchers and feedlot operators have been tweeting at President Donald Trump and Department of Agriculture Secretary Sonny Perdue, with a fairly consistent, direct message: Rural America helped you get elected. And now we need your help.
Using the hashtag #FairCattleMarkets, they’re calling on the administration to restore some balance between cattle producers, who raise cows, and meatpackers, who turn them into meat. Specifically, the ranchers and feeders are asking the government to set transparent pricing mechanisms for the packers, to ensure they’re paying fairly for cattle. They also want the restoration of a rule, known as country of origin labeling, or COOL, that distinguishes genuine American beef from imports.
The campaign, which kicked off on Monday, was started by Joe Goggins, a cattle auctioneer, and is being pushed by Western Ag Reporter, a Billings, Montana-based trade publication. (It’s published by Goggins’ brother, according to The Progressive Farmer.) It coincided with a hearing in the Senate Agriculture Committee on Wednesday, focused on economic troubles in the livestock industry.
“Don’t forget who takes care of the cattle for months on end,” a Kansas rancher named Kerry Crampton tweeted. “We carry all the risk, we take on all liability and loss. The packers have cattle for less than a week.”
The packers she’s referring to are a powerful group of meat processors known collectively as The Big Four. In the past three decades, driven by mergers and acquisitions, Tyson, JBS, Cargill and Marfrig have expanded their share of the cattle market to 85 percent. As that’s happened, farmers have earned less on every dollar of meat that’s sold to consumers. Off-farm income—that is, money earned from doing anything but farming—now comprises 90 percent of earnings for farm households.
That’s part of a rising tide of anger and resentment. In April, a group of feedlot operators filed a class-action lawsuit against The Big Four, alleging that the meatpackers had been colluding to artificially depress the prices they pay for cattle, since they reached a record high in 2015. Because those four companies essentially control the market, the plaintiffs say, they’re able to collectively agree to do things that will trap the sellers of fed cattle in bad contracts, thus padding their own margins, and reaping higher profits.
The fact that one fire can negatively impact so many ranchers was cited as an example of the dangers of consolidation at Wednesday’s Senate hearing. During his testimony, Shane Eaton, a Montana-based rancher and feedlot operator, pointed to a recent report from Kansas State University showing that, after the fire, prices for feed cattle fell by around $185 per head. The feeders, the report says, won’t have positive returns on their animals until next year.
“When the fire happened, we saw two and a half days of futures going straight down,” he said. “I don’t see the futures going up for two and a half days when that plant reopens.”
At the same time, the scarcity caused by the fire has arguably benefitted Tyson. Indeed, as the Kansas State report shows, the margins enjoyed by packers on each head of cattle has grown by nearly four times their annual average, to around $550. For that reason, some ranchers believe the fire could have been deliberate—just another tactic to manipulate the market. In an apparent show of good faith, Sec. Perdue has directed the USDA’s packers and stockyards division to investigate whether any price manipulation, collusion, or unfair practices have occurred as a result of the fire.
The tweeters, who include Fox News firebrand Tomi Lahren, are asking the administration to turn back a repeal of COOL, which occurred in 2015. That repeal, she and others allege, has coincided with falling cattle prices, and rising meatpacking profits. After foreign beef no longer had to bear the label, imports rose, particularly in the grass-fed sector. That’s caused prices of domestic cattle—which, critics argue, are now part of an undifferentiated morass of meat—to fall.
As is sometimes the case in farming, country of origin is the kind of issue that makes for strange political bedfellows.
“It’s not every day I agree with Tomi Lahren,” tweeted J.D. Scholten, a progressive Democratic candidate for Republican Steve King’s House seat in Iowa in 2020, who today joined in on the #FairCattleMarkets campaign. “But when three billion pounds of lower quality meat are imported annually and repackaged as products of the U.S., we need action to protect our cattle ranchers. We need to reinstate COOL!!!”
