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Four items about the Big Four meat companies that collectively control 85% of the beef market.

I.  Reuters reports that JBS, the Brazilian meat giant, has settled claims that it engaged in price fixing for—gasp—$52.5 million.

JBS, its U.S. affiliates, and the other three of the Big Meat companies—Cargill Inc, National Beef Packing Co and Tyson Foods—have been accused of conspiring to limit supply iin order to raise prices and boost profits.

In a statement, JBS said it did not admit liability but that settling was in its best interest. It also said it will defend against beef price-fixing claims by other plaintiffs.

The settlement still requires approval from the courts.

JBS settled one month after U.S. President Joe Biden announced a plan here for new rules to bolster competition and stop “exploitation” in the meat sector.

Comment: I’ve written about the President’s executive order on the meat industry here, his challenge to consolidation here, and his concern about lack of competition here.  $52.5 million sure looks like guilty as charged, no matter what JBS says.

II.  The National Cattlemen’s Beef Association issued a statement on the settlement.

The announcement that JBS USA has decided on a $52.5 million settlement over allegations of beef price fixing is deeply disturbing to the National Cattlemen’s Beef Association (NCBA). NCBA was the first national organization to request a government investigation of beef markets in 2019. Now there are settlements occurring without Department of Justice (DOJ) having released findings or even providing cattle producers with an update on progress.

Comment: The NCBS is disturbed?  I’ll bet.

III.  The American Enterprise Institute has released three articles on food price inflation, meat prices and pork prices.

• AEI – Food price spikes temporary, inflation likely to fall in 2022
• Where’s the pork in the surge in recent pork prices?  Maybe nowhere, and not in the meatpacking industry 
• Subsidized beef packing expansion unlikely sustainable

IV.  Tyson Foods, one of the other defendents in the price-fixing case, is #1 on Fortune’s World’s most admired companies list for food producction, and for the sixth straight year, no less.

Comment: You can’t make this stuff up.

Every time I write anything about the effects of ruminants on greenhouse gas emissions, I am flooded with comments about cherry-picked data.  I’m not going to even try to sort that out, but I do find the studies interesting.

Here’s a report from the Institute for Agriculture and Trade Policy (IATP): Emissions Impossible Europe: How Europe’s Big Meat and Dairy are heating up the planet. 

Watch the video about it here.

Among the report’s findings:

• Just 20 European meat and dairy companies combined produce the equivalent of more than half of the United Kingdom, France and Italy’s emissions, and exceed that of the Netherlands.
• The same 20 companies’ total emissions rival those of fossil fuel giants…over half of Chevron’s (55%), 42% of ExxonMobil’s, 44% of Shell’s and of BP’s.
• Their combined emissions are also equivalent to 48% of the coal consumed in the entire EU (2018)1 or more than 53 million passenger cars driven for one year.
• Only four (Arla, Danone, FrieslandCampina and Nestlé) out of the 20 companies assessed report their total supply chain emissions…Only three (Nestlé, FrieslandCampina and ABP) have announced plans to reduce their total.

Plenty of groups object to these findings.  You can read about that here.

Addition:

If you haven’t seen it, take a look at this 15-minute video on Big Ag lobbying from the New York Times.

I am on the mailing list for the North American Meat Institute (NAMI) the trade association for Big Beef, and I like knowing what it has to say.

Right now, it is in defensive mode.  The industry must be—and ought to be—concerned about White House interest in making the beef industry more competitive.

But wait, says NAMI, there’s nothing new here.  Four beef processors have held 80% of the market since 1994.

And, it says, the meat industry is not responsible for the inflationary cost of meat.

It also denies anti-trust allegations.

In testimony to the House Judiciary Subcommittee on Antitrust, Commercial, and Administrative Law on “reviving competition,” NAMI said the meat industry is not to blame:

The administration will be surprised to learn that economic fundamentals have led to inflation. Labor shortages. Transportation and supply chain challenges. Regulatory policies. And all of those input challenges were coupled with record meat demand.
Collectively, these factors drove up prices for wholesale and retail beef…The discussion above demonstrates that free market fundamentals drive the cattle and beef markets and that what we have seen before and during the course of the pandemic was to be expected.

The testimony, which is well worth reading, makes this case.  It does not discuss the behavior of the big four meat processors during the pandemic: forcing sick people to come to work, inducing the President to sign an executive order to keep plants open, squeezing ranchers so they can’t make a living, and demanding higher prices at the store.

NAMI may be right that consolidation in this industry happened a long time ago, but the pandemic revealed its exercise of power in a way that had not been previously so visible.

Let’s hope the Justice Department gets to work on this.

If you want to know what’s wrong with the US food system, consider corn.

• Hardly any of it is grown for food.
• Most—half—goes for animal feed, domestic or exported.
• One-third goes for ethanol fuel.

Let’s start with the big picture, courtesy of the National Corn Growers Association (FSI means Food/Seed/Industrial).

The USDA explains how much of total corn production ends up as ethanol fuel.

What’s wrong with this?  See The Conversation: The US biofuel mandate helps farmers, but does little for energy security and harms the environment.

If you’ve pumped gas at a U.S. service station over the past decade, you’ve put biofuel in your tank. Thanks to the federal Renewable Fuel Standard, or RFS, almost all gasoline sold nationwide is required to contain 10% ethanol – a fuel made from plant sources, mainly corn.

With the recent rise in pump prices, biofuel lobbies are pressing to boost that target to 15% or more. At the same time, some policymakers are calling for reforms. For example, a bipartisan group of U.S. senators has introduced a bill that would eliminate the corn ethanol portion of the mandate.

This article is worth serious attention for its discussion of the effects of corn growing on profits, carbon-neutrality, indigenous populations, and agriculture policy in general.

Or, to summarize in a corn cob (thanks to Mother Jones):

It’s hard to know where to begin to comment on this.

• Many people in the world do not have enough to eat.
• It would be better for people and the planet if we in industrialized countries ate less meat.
• It would be better for people and the planet if we used fewer cars.

Growing corn for animal feed and automobile fuel makes no sense for human health or that of the enviroment.

I was amazed to see this announcement from the White House, of all places: “Recent Data Show Dominant Meat Processing Companies Are Taking Advantage of Market Power to Raise Prices and Grow Profit Margins.”

In September, we explained that meat prices are the biggest contributor to the rising cost of groceries, in part because just a few large corporations dominate meat processing. The November Consumer Price Index data released this morning demonstrates that meat prices are still the single largest contributor to the rising cost of food people consume at home. Beef, pork, and poultry price increases make up a quarter of the overall increase in food-at-home prices last month.

The big concern is consolidation—monopoly power—in the meat industry.

Four large conglomerates control approximately 55-85% of the market for pork, beef, and poultry, and these middlemen were using their market power to increase prices and underpay farmers, while taking more and more for themselves…their gross profits have collectively increased by more than 120% since before the pandemic, and their net income has surged by 500%. They have also recently announced over a billion dollars in new dividends and stock buybacks, on top of the more than $3 billion they paid out to shareholders since the pandemic began.

The bottom line?

The meat price increases we are seeing are not just the natural consequences of supply and demand in a free market—they are also the result of corporate decisions to take advantage of their market power in an uncompetitive market, to the detriment of consumers, farmers and ranchers, and our economy [bold face in original].

Will the Biden Administration be able to do anything about this level of monopoly power?  Stay tuned.

Nicolette Hahn Niman.  Defending Beef: The Ecological and Nutritional Case for Meat (revized and expanded second edition). Chelsea Green, 2021. 

This is an updated edition of Hahn Niman’s 2014 book, which I wrote about in October that year.  Then, it was titled Defending Beef: The Case for Sustainable Meat Production.

I did a blurb for the book when it first came out and it still holds for this new edition:

Issues related to the long-term health effects of red meat, saturated fat, sugar, and grains are complex and I see the jury as still out on many of them.  While waiting for the science to be resolved, Hahn Niman’s book is well worth reading for its forceful defense of the role of ruminant animals in sustainable food systems.

In my 2014 post, I said:

The subtitle says it all: “The Manifesto of an Environmental Lawyer and Vegetarian Turned Cattle Rancher.”

Really?

Really.  She’s not kidding.

As [my blurb] might suggest, I have a more cautious interpretation of the science she summarizes, but there are plenty of reasons why eating meat can help improve human nutrition, especially when the animals are raised as humanely and sustainably as possible, which the Nimans most definitely do on their beautiful Bolinas ranch. [Photos are here]

Vegetarians: does she convince you?

Let the debates begin.

Well, 7 years later the new edition focuses much more on arguments about the effects of beef production on climate change and whether plant-based meat alternatives are worth the trouble.

The big news:  Hahn Niman is no longer a vegetarian.

I may once have believed that if I followed a vegetarian diet, nothing would have to die for my meals.  I now see how wrong I was…My primary mission these past two decades has been helping, in whatever ways I can, build a more environmentally sound, nourishing and humane food system.  We have a long way to go.  I don’t urge people to eat meat.  But I certainly don’t urge refraining from it, either.  I encourage omnivorous eaters to seek well-raised meat.  Abandoning meat will not positively affect the food system and may diminish one’s health.  The greatest consumer impact will come from people who eat meat actually buying it from good sources. (p.244)

I am with her on all of that.

That meat has nutritional and ecological benefits is beyond dispute.  This books lays out her point of view about the reasons for these benefits in an especially thoughtful way that carefully considers the counter-arguments.

Whether you agree with her views or not, this is the book to read about these issues.

The majority staff of the House Select Subcommittee on the Coronavirus Crisis has issued a scathing report: “Coronavirus Infections and Deaths Among Meatpacking Workers Were Nearly Three Times Higher than Previous Estimates.”

Newly obtained documents from five of the largest meatpacking conglomerates, which represent over 80 percent of the market for beef and over 60 percent of the market for pork in the United States—JBS USA Food Company (JBS), Tyson Foods, Inc. (Tyson), Smithfield Foods (Smithfield), Cargill Meat Solutions Corporation (Cargill), and National Beef Packing Company, LLC (National Beef)—reveal that coronavirus infections and deaths among their meatpacking workers were substantially higher than previously estimated.

The report’s main findings:

• At least 59,000 meatpacking workers were infected with the coronavirus during the first year of the pandemic—almost triple the 22,700 infections previously estimated by the Food and Environment Reporting Network (FERN).
• At least 269 meatpacking workers lost their lives to the coronavirus between approximately March 1, 2020 and February 1, 2021—over three times higher than what was previously estimated by FERN.

• Certain meatpacking plants saw particularly high rates of coronavirus infections during the first year of the pandemic. For example, 54.1 percent of the workforce at JBS’ Hyrum, Utah plant contracted the coronavirus between March 2020 and February 2021.
• Across companies, Tyson saw 29,462 employee infections and 151 employee deaths, and JBS saw 12,859 employee infections and 62 employee deaths.
• Coronavirus Outbreaks in Meatpacking Plants Disproportionately Impacted Minority Workers
• The full extent of coronavirus infections and deaths at these meatpacking companies was likely much worse than these figures suggest.
• OSHA made a political decision not to issue regulatory standards that might require meatpacking companies to take actions to protect workers.

Recall that meatpacking workers were among the first to get sick from Covid-19, causing

• People in their communities to become ill
• Plant closures
• Meat shortages
• Meat companies to succeed in inducing President Trump to issue an executive order to keep the plants open.

The report confirms that Covid-19 in meatpacking workers was and is a national tragedy and scandal, a direct result of corporate consolidation and capture of government.

The report’s recommendations to meatpacking plants, government agencies, and Congress can’t come soon enough.

I posted last week on meat-industry consolidation, an issue that has become so prominent that the White House is even talking about it.

The President understands that families have been facing higher prices at the grocery store recently. Half of those recent increases are from meat prices—specifically, beef, pork, and poultry. While factors like increased consumer demand have played a role, the price increases are also driven by a lack of competition at a key bottleneck point in the meat supply chain: meat-processing. Just four large conglomerates control the majority of the market for each of these three products, and the data show that these companies have been raising prices while generating record profits during the pandemic.

That’s why the Biden-Harris Administration is taking bold action to enforce the antitrust laws, boost competition in meat-processing, and push back on pandemic profiteering that is hurting consumers, farmers, and ranchers across the country.

Speaking for the White House, the director of the National Economic Council said:

When you see that level of consolidation and the increase in prices, it raises a concern about pandemic profiteering — about companies that are driving price increases in a way that hurts consumers who are going to the grocery store, and also isn’t benefiting the actual producers, the farmers and the ranchers that are growing the product.

The reactions

In a statement, Tyson’s Foods said “Tyson Foods categorically rejects the conclusions drawn earlier today by the Secretary of Agriculture and the Director of the National Economic Council in a White House press briefing.  The U.S. Department of Agriculture recently published a report detailing the drivers of consumer inflation in the food sector, none of which are related to industry consolidation or scale.”

Smithfield pointed to a statement from the North American Meat Institute.

And then there’s this @FarmPolicy tweet,

Interesting times, these.