Beef, consolidated

June 12, 2014

Do you know where the meat in your hamburger came from? It’s sort of trick question, because even if you don’t know, it’s pretty easy to guess. Roberto Ferdman reported yesterday that the top four meat packers in the United States — Tyson Foods, JBS USA, Cargill, and National Beef — control 75% of the nation’s beef supply. Most of that consolidation happened in the 1980s, but the big four have been slowly adding to their market share in the last decade:

BEEF

Ferdman explains why this matters:

Consumers are becoming increasingly more concerned with how their meat is produced. Part of that is born from a demand for more humane practices—the meat industry’s malpractices are well documented—and part of that stems from a heightened awareness about what people are putting into their bodies—the meat industry has come under fire for both its questionable practices and potential for large-scale contamination. An ever-shrinking pool of options will only make it more difficult for consumers the fair opportunity to appropriately decide whom they do business with.

 

3 comments

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And we wonder why beef prices are skyrocketing…hmmm…

Just like oil, gas, etc., fewer players means less competition, higher profits, and higher prices for consumers.

Oligopoly is the correct term (a slightly legal monopoly (which is illegal)).

Also known as ‘excellent market fundamentals’ from a business standpoint – and highlighted as such in publications as the Wall Street Journal.

Our government should be breaking these companies in all of these industries back apart like they did with MA Bell 30 years ago…

More jobs, more competition, and lower prices…

Posted by mrosera | Report as abusive

We buy little beef from supermarkets. Drive by one feedlot and you’ll understand why not to buy corporate beef. Most that we buy comes from local farms that grass-feed their cattle. A little more expensive, but worth the price.

Posted by upstater | Report as abusive

This article seems to have an “alarmist” tone to it. Beef packing is a very labor and capital intensive business. Modern refrigeration and low cost transportation encourage consolidation in this industry. Additionally, the dozens of beef packing plants run by the big four packing houses are all USDA inspected by hundreds of reliable and well trained meat inspectors. The fear of “large scale contamination” is unwarranted. American beef is the best and cleanest in the world, hands down.

Additionally, the article fails to note that most beef comes to the packers through a vast network of thousands of individual ranchers who each own from a few to thousands of cattle. The underlying strength of America’s beef industry is that cadre of ranchers who take the risk of raising beef at small margins for a hungry nation. Further, over 25 percent of beef still comes from literally hundreds of small beef packers around the nation. So, the horror of “an ever shrinking pool of options” is just harum-scarum designed to goad the uninformed to be afraid of their food supply.

I am not a rancher nor a beef packer, but I eat plenty of fresh beef, and I have a brain. All mature industries consolidate, there is nothing unusual about this trend. This is basic economics. I hope that the alarmist tone here is just part of the “snark” that Shane Ferro lists as one of her LinkedIn skills, and not a harbinger of more attacks on American industry. All in all, though, its a good article!

Posted by Tomtherailnut | Report as abusive