Beef Industry

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      Beef Industry

      If you've been to the supermarket lately, you've probably noticed the price of meat is going up and fast. But while the price you pay has never been higher, many American cattle ranchers say they're struggling. We sent Lisa Fletcher to Oklahoma to find out why.

      When it comes time to feed this prized angus herd, a simple tap of the truck horn gets an immediate response.

      But feeding the cattle is perhaps the only easy part of the business for John Pfieffer, who has been farming here in central Oklahoma since 1985. His family has been in the state for generations.

      John Pfieffer: My grandad talks about when he went through the 30s and they were actually getting paid $10 a head for the cows to kill them because there wasn't any market for them.

      Things are better than they were for John’s grandad, but much in his business depends on factors ranchers can’t control, like the price of feed, or how much they can sell their animals for.

      Pfieffer: It's always been difficult for farmers to make a living. They've always talked about that they're asset rich and cash poor.

      And right now, there’s a strange contradiction in the beef business: while prices at the supermarket keep rising, many of those who raise the cattle aren’t seeing higher profits.

      Lisa: Are you getting more money for your cattle?

      Pfieffer: No, we're not.

      For more than a decade, retail prices of beef have been steadily rising, going from $6:81 to $12:28 per pound for sirloin steak between 2001 and now.

      Over the same time, the price for live cattle, has stayed flat, between $120 and $160 dollars per hundredweight.

      Fred Stokes is also a cattleman, after a 20-year military career, including two tours in Vietnam, he returned to the family farm in Mississippi. When we caught up with him in the summer, he was in Washington DC with fellow farmers, discussing what’s wrong with the cattle business and meeting members of Congress.

      Lisa: What are family farmers up against right now?

      Fred Stokes: Extinction, probably.

      Lisa: Who's getting all the money?

      Stokes: Right now, the beef packer. They are totally ripping people off.

      Stokes helped found a farmers group called the organization for competitive markets, it says the U.S. beef industry has become too concentrated with just four meatpacking companies controlling more than 80% of the market.

      Stokes: There's no question that they have the leverage to exact whatever they want, whatever portion they want from the beef dollar. Between them and the retailer, they take so much off the plate that there's simply not enough on average for the producer to get by.

      And it’s not just smaller ranchers sounding the alarm, the Vice President of the U.S. Cattlemen’s Association recently said this at meeting of the Senate Agriculture Committee.

      Justin Tupper: Since 2015, corporate packers gross margin ballooned from an average of $100 to $200 a head, to well over $1000 a head. Packers have enjoyed unbelievable profits, harvesting around 120,000 head per day, while cattle producers go out of business and consumers pay double or even triple at the meat counter.

      Of the four big meat packing companies, two are Brazilian-controlled. A trade group that represents them has accused the government of scapegoating them saying low prices for cattle ranchers are a result of market forces, with more animals than existing production plants can handle, creating a buyer’s market for live cattle.

      For consumers, it all means higher prices now and in the future, and because of loopholes in labeling rules, it isn’t even clear where the beef is coming from.

      Mike Eby is a 7th generation dairy farmer and cattle rancher from Pennsylvania.

      Lisa: Explain to people who don't know, why is country of origin labeling so important to an American farmer?

      Mike Eby: Here you have beef that is brought in from other countries, maybe blended with the American beef, repackaged once it gets here, and they can then slap a “Made in the USA” on it, because it's in a styrofoam container that is “Made in the USA.” So, to the consumer that's purchasing, they just assume that it is in the U.S. and there is no differentiation between beef that is brought in from other countries, such as Brazil.

      Except for the price. Often making foreign beef, because it costs less - the choice of Americans who think they’re supporting U.S. farmers because there’s no requirement to tell consumers the true country of origin.

      Farmers, like John, say they are holding on as best they can - watching their profits disappear, and quite possibly their family farms along with them.

      Sharyl (on-camera): What is the Biden administration saying about this?

      Lisa (on-camera): They’ve accused those four major meatpacking companies of quote: “pandemic profiteering” for near-record profits. The Department of Agriculture says it’s looking at ways of addressing the problem. Some members of Congress are looking towards legislation for more price transparency. Even the Department of Justice is looking into this. And meanwhile, there are some cattle ranchers that are trying to raise money to build their own processing plants.