Chicken, Hog, and Beef Farming and then there is Big Ag
Michael Smith, Real Farmer and Farm Economist
Ooh boy have we got a lot going on in ag world. Run sent me this a little while ago and I think this is important.
The Tricky New Way That Big Ag Is Getting Farm Data, The Atlantic, Claire Kelloway, October 5, 2021
Big data collection is 100% not in the favor of the farmer by corporations. The more we see John Deere et al get tech heavy where they are collecting data about the equipment used and also other ag adjacent corporations such as Cargill who just purchased a chicken processor in Central Texas the more we see the plight of farming.
Now, don’t get me wrong, data collection by the USDA and the university extensions has always been a thing, but that was a give and a get. I give the extension some soil, they tell me what’s wrong with it. The USDA polls farms to see where they are in the annual cycle and then reports. The reports are useful to farmers because they know if everyone went heavy corn or not and if there is any money to be made in soy, cotton, rice, milo, etc. All of this also informs the general public of a pending dust bowl doom.
Collection of data by corporations has but one goal – market domination.
Due to the pandemic, us small time chicken farmers have gone in heavy on meat birds to either eat ourselves or sell for upwards of $5 a pound at market. Nutrien figured this out as well. Internet sleuths from the corporations saw Shopify stores selling chicken for high prices $25-30 per chicken, adverts on Facebook to the same. Nutrien also started looking at their independent retailers, such as mine.
Long story short, meat bird feed is unavailable to my local retailer and only sold at Tractor Supply for $18 for 40 pound bag. I used to get 50 pounds for $16.49. Alas, this is Texas and we have a Producers Co-op. More on those later.
This monopolistic tendency by the corporations is what Biden was yelling about yesterday. Vertical integration in agriculture only constrains the market.
We have seen this before. Successful Farming magazine used to have a section called the ‘Hog Report’. The editor of the swine section recently retired and did a podcast in July of this year. She told of the first reports she had produced and that what they believed to be hundreds of independent hog farms, the processors had consolidated down to just 40.
Her father, a hog farmer, knew he could no longer compete and decided to retire.
We have also seen this in the poultry business. Because the processors have the contracts with the retailers, and also the USDA inspected facilities and the stock market funds for equipment to process thousands of chickens per hour, There is no way to compete on a large scale.
You either join them or take your wares to a farmers market and stay small time.
Once these corporations have achieved the consolidation, they can dictate price and supply. They can blame “inflation” for expensive chicken. They can blame “worker shortages” on lack of bacon, and unfortunately there isn’t much you or I can do about it aside from write our congress people and demand action.
That being said, if you are in Houston area this Sunday there is a new farmers market on the south side and I’ve got a quarter ton of pears to sell ya.
Run – 2016; The same is happening and has happened with beef. Unless you are a large beef farmer you can not compete. Your costs per pound far exceed that of big Ag farmer who has the acreage and the lower costs.
“What this strategy does is change the focus to “low pricing to consumers” (think China manufacturing of product) from competitive and fair business practices of meat packers and retailers in the market place. In other words, if it is low pricing to the customers, it has to be good. Well, past practices of such environments have shown it was not good in the end. Yes the consumer gets a low price; but it is fatal to small businesses and Labor by leaving a concentrated market controlled by a few corporations. Today, the meatpacking industry is controlled by 4 majors having >80% of the business.
And in the end, the consumer will pay much more.”
The farmers I know who are making are small scale truck farmers selling directly to consumers, restaurants and a few smaller specialty grocers. With COVID especially, it has been good business.
From what I’ve read, the large scale farmers are completely beholden to the majors. It’s like the 19th century when the railroads owned farming. Then came the large meat processors. A farmer might pretend to own his or her own farm, but the truth is that they are just employees and not highly valued ones. As best I can tell, farming has always been a rather lousy way to make a living dating back to the days of subsistence farming.
In a 2016 highly controversial post, I brought it up about the Krogers, WalMarts, etc. of the world dictating prices to the Feed Lots, etc. It you can not meet it, you are out. You are right.
Yes, but what is going on now is a race between the people who actually produce the food and the processors/grocers who package and sell it. Inventories at retailers are at all time lows. Cows still in the field. COVID was great because the USDA started a direct to consumer box model and paid farmers to redirect. Here at Foxglove, we showed an early proof of concept last year of a subscription service direct to door mats that was highly effective, wanted, priced well, and allowed us as a subscription to dabble in the dark arts of loose Texas food laws. The problem is scalability. Bottom line is that people would rather not go to Kroger. Scalability takes money, so this fall we are switching gears to sell at the markets, which one can do very well at.
The point I’m trying to make is that the secondary market is 300% there. We just haven’t been able to meet the demand. I also just found out that our neighbors nextdoor, Tadmore Ranch have started field dressing their Ameeican Shorthorn beef and they want to sell at competitive prices. The meat producers are tired of being jacked with. Pig farmer next to me is about to expand operations, and I’ve been in talks with him to supply. We’ve also got a supply of home goods that we throw in the subscribers boxes.
The demand is there, the public sees and supports what we are doing, we just are having logistics problems and the big guys have us whipped on that…but we’ve got the people, and any organization supported by the people is one that causes revolutions.
We also have the USDA wanting to help in the middle market and cold storage for the little guy: https://www.agriculture.com/news/business/loan-guarantees-for-middle-of-the-supply-chain
This is huge. One rancher out here field dressed and also sold his BBQ roadside and recently bought a refrigerated truck to on site butcher other peoples animals. He’s booked up for months. The loans provided by the government will be low interest and will let others tap into that market, allowing us to effectively go around Cargill. Biden administration is seeing what we’ve been bitching about and doesn’t want a repeat of 1914 or so (farm credit bank was established 1916 in response to farmers earlier essentially going on strike).