Sherman Act v. Modern Conglomerate Agriculture

Agricultural Economist and Farmer Michael Smith

Sherman Act v. Modern Conglomerate Agriculture

Multiple times the Biden Administration, along with Secretary Vilsack, and other administrations have made multiple public comments and now threats of investigation of beef producers and their horizontal and vertical integration over the past few decades. The targeting of the beef industry is one of the loudest and most recent, but we fail to realize this is a problem indicative of our entire food system.

Let’s start with meat. The overwhelming majority, 85% of all meat production is handled by four companies, Tyson, the largest for chicken, Cargill, beef and now chicken with the acquisition of Sanderson, JBS, beef and pork, and National Beef, mostly beef. They all operate multi-function processing plants in both North and South America that process all consumer meat staples including turkey. The spotlight has always been on market manipulation and Monopolistic Capitalist White Men Hegemony. 

This is false. We did this to ourselves. 

Every time an E.Coli or Salmonella outbreak would happen, the public backlash was always immense and lawmakers, paid off by the Big 4 offered solutions. Through the USDA, all of the processing plants were to be inspected and credentialled by the government, establishing a framework that currently looks like this:

Each chokepoint, err, processing facility is owned and operated by the Big Four under the direction of the USDA. We’ve allowed them as a public to get to this point, and now that they have vertically integrated the processes behind their respective positions, have now began to Sam Walton their Monopoly power into driving up prices for consumers while also suppressing expenses from growers. 

Run and I have been posting multiple articles to the matter. He recently sent me this Biden Turns to Antitrust Enforcers to Combat Inflation – News Concerns. We don’t need to look very hard for articles to support the argument, even the White House is sounding off Addressing Concentration in the Meat-Processing Industry to Lower Food Prices for American Families | The White House.

You can see from the White House analysis that the trend is much higher beef prices at retailers, but the producers are flat. Given the inflationary environment, land price crunch, and people attempting to finally make a living we see some behaviora by producers that unfortunately, in the end, leave loved ones broke, broken, and communities saddened, as with what happened in Washington state. Betting the ranch | The Counter

We focus on meat prices because those are the easiest farm direct nutrition aside from vegetables. 

Other retail brands are heavily dominated in the produce space by Dole Foods, Con-Agra. In the processed foods Kraft-Heinz, Nestle, Mondelez. The ultra processed grain space held by Kellogg’s.

How did this happen? We let it. The consistency offered by each of these products is as old as Government Cheese (Kraft-Heinz), and Nilla Wafers (Mondelez-Nabisco). Retailers brought, and shelved cheap, consistent foods with shelf lives in excess of anything that had to be milked, refrigerated, or slaughtered. As popularity during the Great Depression and World War II grew, the idea of consumer Staples changed. Spam became canned highly salted pork, instead of unsolicited callers. Canned had nothing to do with Disco dancing. It was the post expansion 1960s house wife convenience that held onto and exacerbated the problems. We wanted cheap, we wanted easy. We then made these cheap, processed foods part of the governmental nutritional assistance program, SNAP, which has further carved these companies into the bedrock of America.

The Sherman Act

In 1911 Standard Oil controlled upwards of 80% of the oil market, energy. We had successfully converted our lamp oil procurement from whaling and began transforming our entire energy system with one family at the helm, the Rockefellers.

This unsavory monopoly was seen in the public as untenable, the Sherman Act was passed in 1890 and used against Standard Oil was cut into 34 separate legal entities to help drive “capitalistic competition”. It did neither. Standard Oil is now known by other names: Exxon, BP, and Chevron. Our grandparents and great grand parents essentially instructed the government to break up this monopoly only to see the government allow them to remonopolize. 

Vs. Modern Conglomerate Agriculture

This is really a misnomer. Conglomerate agriculture isn’t actually agriculture. Producers of onions, beef, milk, corn, beans, and whatever else is produced from the land resources we have as a country are many. The conglomerates are the middle men controlling the markets. So how could we use the Sherman Act to break these companies up so that the nefarious behaviors stop? 

We don’t. We can’t. 

If the Federal government is unable to allow the free market to sort itself out properly, monopolies will still exist. The USDA has prohibitively large standards put on processing facilities all around the country. It is expensive, time and resource consuming. Almost impossible for one person to even attempt. That is the point the processors and wholesale companies relish.  

Much like oil and gas leases being held by the Federal government, the pipelines held in accordance to EPA standards, the transportation under the watch of the Railroad Commission, food is just as regulated by the USDA, EPA and CDC. Regulations arguably keep the public safe, kaao corporations from creating super fund sites and getting away with murder. They also create monopolies in certain sectors. 

There is another way...