USDA forum tackles consequences of meatpacking consolidation

Panelists at the USDA Agricultural Outlook Forum want more competition in the meatpacking industry, but face an uphill battle.

"There's basically no free market competition in the fed cattle market nowadays, and it is causing economic ruin and hardship in rural America to cattle ranchers," says Dr. Brooke Miller, past president of the U.S. Cattlemen's Association.

The panel today featured Blayne Arthur, Oklahoma Secretary of Agriculture; Katie Kramer, owner of Hurdwell, a small meat processing company in Ohio; and Miller.

Today four companies control approximately 55%-85% of beef, pork, and poultry processing. The panel discussion centered on the risks and challenges this level of consolidation poses for the industry.

COVID Impact

Panelists said the impact of the COVID-19 pandemic on processing facilities brought greater attention to the issue.

"We didn't have shortages of cattle," Miller says. "We had shortages of beef in the grocery store. That was because of this 'eggs all in one basket' type of approach."

Arthur says during the pandemic her office would get calls over empty bacon shelves at the grocery store.

"And they said 'Well, don't you all have some warehouse somewhere that you can send us some?'"

In response to the grocery store shortages, Oklahoma used $10 million of CARES Act funds to award 40 grants to small- and mid-size meat processors.

Arthur says even post-pandemic Oklahoma consumers continue to be interested in purchasing from the smaller processors.

"Suddenly they were getting to have this relationship with this beef producer and getting to learn more about how they're producing their product," she says.

A Competitive Disadvantage

Despite success stories like those in Oklahoma, panelists emphasized smaller packers are still operating at a disadvantage.

"I see a lot of excited consumers coming in to support local and then they get there and of course it's going to be a little bit more expensive than they're seeing at Walmart," Kramer says of customers at her facility.

"And then there's some push back because at Walmart they can get as many ribeyes as they want…and there's only so many ribeyes on an animal."

Kramer received federal and state grants to get her business off the ground and is still working toward becoming profitable.

End Game

"I feel like I've been a success by starting the idea," Kramer says. "I always felt it's not for me to see the end game, [but] that I've set the next generation up for their end game, to change things in my little corner of the world.

"...And the government is helping us out right now. We have a spotlight on local food production that we haven't had in years and years. This is a wonderful thing."

Miller says the end game is more competition and improved profitability for cattlemen.

"I look at food security as a national security issue, and if we continue doing the same thing that we've been doing for the last several decades, we're not going to have any farmers and ranchers that will be producing beef," he says.