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Vertical Integration of the Pork Industry

by Martha Stevens,
Hatfield, Missouri

Martha Stevens is livestock farmer who lives and farms near Hatfield, Missouri. This article is part of an ongoing series by Martha Stevens - Straight Talk - commenting on the life and politics of farming in Missouri and the U.S. as a whole.

By now, most farmers and honest economists have conceded that the pork industry has virtually eliminated independent pork producers as the NPPC, Farm Bureau, State Universities, politicians, and others of like persuasion have pushed forward the agenda of big business and the vertical integration of this industry into a carbon copy of the poultry industry, aka Corporate Agribusiness. Note I did not call these operations "farms" as they prefer to call themselves. By no stretch of the wildest imagination are they farms.

While many forward thinking individuals and organizations forward this consolidation of the pork and poultry industry as exactly what it was -- a takeover of the food industry -- others (primarily those afore mentioned) denied the charges and assured those gullible enough to believe them that the independent farmer would reap the benefits, through more and better markets. Those opposing the corporate agenda were labeled radicals, doom-sayers, and un-credible. (Given the accuracy of predictions made by the opponents of corporate farming, I prefer the label incredible!). So, now I would ask those supposedly knowledgeable defenders of vertical integration, "What is the live pork price? Where are the markets the independent producer was assured would be there? And, given the price of "on the hoof," why have prices in the meat case remained high (and in some instances even higher) than when prices were in the 40 to 50 cent range?"

Look out beef industry; here it comes! Cattle Buyers Weekly reported in their October 5 newsletter on the trend toward concentration in the feedlot industry. And guess who tops the list in numbers of fed cattle for 1997? The same giant corporation that ranks number 3 in pork production, Continental Grain Company (Boulder, Colo), with an estimated 975,000 head of beef. Others sharing the spotlight with CG in the top 30 among cattle feedlots are ConAgra (Greeley, Colo) and National Farms (Kansas City, MO). Interestingly, these three also are among the top producers involved in mega hog confinement facilities. See the writing on the wall yet? Read on.

Cattle Buyers Weekly also reports that the feedlot sector continues the trend toward even more consolidation, with the top 30 operations set to handle up to 4.888 million head of beef -- 21% more than they had in 1990. Even more consolidation of the feedlot industry is expected as small feedlots fall by the wayside through sellout or bankruptcy. Further consolidation is being encouraged as banking and lending institutions put the pressure on small operations to get out of the business through denial of future loans and/or calling in of past loans, while urging the mega operations to expand.

Before you grain farmers get to thinking you are out of the corporate takeover, need I remind you that many of the same corporations that are now in the livestock business are also in the grain-buying business? And guess what! Low grain prices make their live-stock enterprises more profitable!

Remember the grandiose promises of "Freedom to Farm?" Who do you think initiated this legislation that has resulted in $1.50 corn this year? And it was none other than the "Bigger is Better" lobby (aka Farm Bureau) that helped convince many farmers that "Freedom to Farm" was in their best interest!

Unfortunately, consumers, too, will fall victim to this trend toward "consolidation." As our nations’ food supply falls into fewer and fewer hands, those few hands will no longer rely on the supply and demand pricing policies of years past. Without competition, monopolies form, and as has been perceived in other industry, when a near monopoly exists, we find ourselves held hostage by those who are in control. And what more controlling influence could there possibly be than control of our food supply? Think about it. When the independent farmer is gone -- and make no mistake, he is being eradicated rapidly -- there will be no competitive supply and demand market. And consumers will pay the price, as will the nation, at the supermarket -- and beyond.

Published in In Motion Magazine - April 10, 1999

Also read other essays by Martha Stevens