Despite record beef prices, ranchers have not reportedly experienced an increase in profit
As the price of beef has risen by one-fifth in the last year, which raises an alarm over inflation, Americans are consuming more of the meat than ever. But despite the price increase, cattle ranchers are not seeing an increase in profit.
For Montana rancher Steve Charter, 69-year-old third-generation cattle rancher, says his share of the $66 billion beef cattle industry has virtually disappeared. “We are contemplating getting out,” Charter said, as his voice shook while he held back tears. “We are not getting our share of the consumer dollars.”
Charter currently owns an 8,000-acre ranch where he works seven days a week year-round, even as winter temperatures reach 40 below and top out at 110 degrees in the summer. He added that he always imagined his six grandchildren taking over the farm in the future, but after not seeing profits in five years, he is rethinking that dream.
As American cattle ranchers are losing out, conglomerates that dominate the meatpacking industry are making staggering gains. Those companies include Tyson Foods and Cargill, as well as a pair of corporations controlled by Brazilian owners, National Beef Packing Co. and JBS.
According to the U.S. Department of Agriculture, the four largest meatpackers have utilized a wave of mergers since the 1980s in order to increase their share of the market from 36 percent to 85 percent. That dominance in the market has allowed them to eliminate competition and set prices.
One piece of legislation, the Packers & Stockyards Act of 1921, was passed by Congress to “safeguard farmers and ranchers,” as well as other market participants, from “unjustly discriminatory and monopolistic practices.”
The record high beef prices seen today reflect scarce stocks, which is another manifestation of the supply chain disruption that has accompanied the pandemic due to a lack of available workers.