Excellent piece! As a former farmer and also a meat market manager, I agree wholeheartedly with your assessment. Several farmers in my area, who I talk with, are selling directly to the public. The change is happening.
I can give you some insight to the beef issue. I have provided financing for actual farmers for the last 42 years and I have financed a lot of cattle feeders in the corn belt and cow calf producers as well. I am the only guy that has gotten to see underneath the dress so to speak. The roots of the beef inflation lie in the fact that there are very few beef processors. IE its Tyson Meats, JBS, Cargill and National Beef control 85% of the beef processing in the United States. They use this market concentration to control the price of beef for their benefit like anyone else would if they could.
in 2020 during COVID this is what they did. The Government required the beef processors in an attempt to slow the spread of COVID in their plants to spread out their workers which resulted in a slower pace of the cattle through the plant (this is referred to as line speed) So the plants had a lower output and it caused a back up in the country as fat cattle which were ready for slaughter could not be slaughtered. I had customers who had cattle ready for slaughter in the spring of 2020 that had to wait for up to a month just to get a bid from the local Tyson Beef plant and then they had to continue to feed the cattle for several weeks longer. This back up in the country of fat cattle caused the price decline severally for the cattle feeder resulting in losses. At the same time the Beef Processors where telling the retail outlets that the product was going to be in short supply causing retail prices to go up. The result was that for most of 2020 the cattle processors were making roughly $1000 per head while my customers were losing Hundreds of dollars per head. Since my customers were losing money when they went to replace those cattle they were not able to pay as much for the feeder calf. The cow calf producer was getting less for their calf and since the majority of the cow calf operations in the plains are always just one day away from a drought disaster, they culled their herds of the unprofitable cows and stopped growing the cow herd resulting in the fewer calves we are seeing now.
Even when things are normal the cattle feeders have a 15-20 min window each week to sell cattle. They typically get a call late in the week Thursday or Friday with a cash bid for next week. They have maybe 15-30 minutes to call back if they wish to accept this bid. If not they will wait till next week.
Thanks for these insights. I do know that the large producers dominate the market -- especially the processing -- and that they want to squeeze out small producers. It is an old story, with a bad ending if we don't wake up.
Yesterday I bought beef from the company, Porter Road. Their beef prices are very reasonable, particularly given the high quality. Shipping to CA, though, is expensive. So why do I splurge on their beef? I consider the money spent to be going towards promoting responsible small farm beef production. If they succeed it will encourage the creation of other small farms, hopefully some close to where I live (that is, if small beef farms can survive the corporate war against them).
We do have a small beef ranch in my county. However it's owned (or rather, was inherited) by a couple who also own a local newspaper that's dishonest and destructive in its coverage of anything and anyone that's not far-Left. I don't trust the owners so why would I trust their cattle?
We either will pay more for beef from small farms we trust or we will pay infinitely in the future for the destruction of anything healthy in our beef that we have no idea where it comes from or how it really was raised. The unfortunate thing is that with food inflation, fewer and fewer people (and that may soon include me) will be able to vote for the kind of beef they want with their purchases.
That's what has helped new and young farmers -- more people are finally willing to pay more for quality and trust. However, many people really can't afford it -- cheap food is subsidized and regulations unjustly burden small producers.....
Here in south Georgia it is nearly impossible to find feeder calves. A relative just sold (4) 300 lb calves for $6,000. I sure hope that everything the Trump admin is doing will help rebuild beef herds both small and large.
I’m not sure on the specifics, but I believe Cargill, JBS (Brazilian), Tyson et al will be able to avoid tariffs on foreign produced beef because of preexisting tomfoolery with the USDA that allows foreign produced beef to be labeled “Product of USA”. I believe a majority of beef labeled “USA grassfed” is produced in South America. Argentina, Brazil, Paraguay and Uruguay produce A LOT of beef for export. Since they can circumnavigate there labeling requirements I bet they won’t pay tariffs. I am absolutely pro tariff, but I am not confident that the big players will pay the tax because they have already greased the bureaucracy. Go meet a farmer, and buy 1/4 beeves from him. The only legit producers are being squeezed by USDA and county and state officials. If your farmer isn’t being stepped on by the boot of bureaucracy it’s because he pays to play.
Excellent piece! As a former farmer and also a meat market manager, I agree wholeheartedly with your assessment. Several farmers in my area, who I talk with, are selling directly to the public. The change is happening.
I can give you some insight to the beef issue. I have provided financing for actual farmers for the last 42 years and I have financed a lot of cattle feeders in the corn belt and cow calf producers as well. I am the only guy that has gotten to see underneath the dress so to speak. The roots of the beef inflation lie in the fact that there are very few beef processors. IE its Tyson Meats, JBS, Cargill and National Beef control 85% of the beef processing in the United States. They use this market concentration to control the price of beef for their benefit like anyone else would if they could.
in 2020 during COVID this is what they did. The Government required the beef processors in an attempt to slow the spread of COVID in their plants to spread out their workers which resulted in a slower pace of the cattle through the plant (this is referred to as line speed) So the plants had a lower output and it caused a back up in the country as fat cattle which were ready for slaughter could not be slaughtered. I had customers who had cattle ready for slaughter in the spring of 2020 that had to wait for up to a month just to get a bid from the local Tyson Beef plant and then they had to continue to feed the cattle for several weeks longer. This back up in the country of fat cattle caused the price decline severally for the cattle feeder resulting in losses. At the same time the Beef Processors where telling the retail outlets that the product was going to be in short supply causing retail prices to go up. The result was that for most of 2020 the cattle processors were making roughly $1000 per head while my customers were losing Hundreds of dollars per head. Since my customers were losing money when they went to replace those cattle they were not able to pay as much for the feeder calf. The cow calf producer was getting less for their calf and since the majority of the cow calf operations in the plains are always just one day away from a drought disaster, they culled their herds of the unprofitable cows and stopped growing the cow herd resulting in the fewer calves we are seeing now.
Even when things are normal the cattle feeders have a 15-20 min window each week to sell cattle. They typically get a call late in the week Thursday or Friday with a cash bid for next week. They have maybe 15-30 minutes to call back if they wish to accept this bid. If not they will wait till next week.
Thanks for these insights. I do know that the large producers dominate the market -- especially the processing -- and that they want to squeeze out small producers. It is an old story, with a bad ending if we don't wake up.
Yesterday I bought beef from the company, Porter Road. Their beef prices are very reasonable, particularly given the high quality. Shipping to CA, though, is expensive. So why do I splurge on their beef? I consider the money spent to be going towards promoting responsible small farm beef production. If they succeed it will encourage the creation of other small farms, hopefully some close to where I live (that is, if small beef farms can survive the corporate war against them).
We do have a small beef ranch in my county. However it's owned (or rather, was inherited) by a couple who also own a local newspaper that's dishonest and destructive in its coverage of anything and anyone that's not far-Left. I don't trust the owners so why would I trust their cattle?
We either will pay more for beef from small farms we trust or we will pay infinitely in the future for the destruction of anything healthy in our beef that we have no idea where it comes from or how it really was raised. The unfortunate thing is that with food inflation, fewer and fewer people (and that may soon include me) will be able to vote for the kind of beef they want with their purchases.
That's what has helped new and young farmers -- more people are finally willing to pay more for quality and trust. However, many people really can't afford it -- cheap food is subsidized and regulations unjustly burden small producers.....
WHERES THE BEEF?
Here in south Georgia it is nearly impossible to find feeder calves. A relative just sold (4) 300 lb calves for $6,000. I sure hope that everything the Trump admin is doing will help rebuild beef herds both small and large.
I think I may be selling three feeder calves.... If only I were in Georgie. :)
I’m not sure on the specifics, but I believe Cargill, JBS (Brazilian), Tyson et al will be able to avoid tariffs on foreign produced beef because of preexisting tomfoolery with the USDA that allows foreign produced beef to be labeled “Product of USA”. I believe a majority of beef labeled “USA grassfed” is produced in South America. Argentina, Brazil, Paraguay and Uruguay produce A LOT of beef for export. Since they can circumnavigate there labeling requirements I bet they won’t pay tariffs. I am absolutely pro tariff, but I am not confident that the big players will pay the tax because they have already greased the bureaucracy. Go meet a farmer, and buy 1/4 beeves from him. The only legit producers are being squeezed by USDA and county and state officials. If your farmer isn’t being stepped on by the boot of bureaucracy it’s because he pays to play.