Over the past few decades, the landscape of the food and farm system has become more concentrated, less diverse and less resilient. In Episode Four of the Farm Bill Uprooted, hear from Campaign for Family Farms and the Environment’s (CFFE) Patty Lovera and Iowa Interfaith Power and Light’s (IIPL) Elston Tortuga about how corporate consolidation in the food system has impacted farmers and rural communities, and how Farm Bill reforms can help.
So, you know, we're in a system where economic power translates to political power, and we have concentrated the power in the hands of a few players.
This problem is in the news. Why is there a recall of 500 million eggs? Yes, we have to talk about salmonella, but could we also talk about why does one company control 500 million eggs?
00:00:36 Lilly Richard
From the Institute for Agriculture and Trade Policy, I'm Lilly Richard, and this is part four of a six-part podcast series: The Farm Bill Uprooted. This podcast is made possible by the generous support of our listeners. If you'd like to support Uprooted, go to: iatp.org/donate.
Since the turn of the 20th century and accelerating after World War II, the number of farms in the U.S. has decreased dramatically, while the average farm size has grown. In the 1970s, that trend became policy, with Secretary of Agriculture Earl Butz urging farmers to “get big or get out,” by buying up neighboring land, specializing in select commodities and planting from fence row to fence row. And it wasn't just a suggestion. As Farm Bill Supply management programs were weakened and the price of commodities plummeted, interest rates rose and a farm lending disaster led to the farm crisis of the 1980s, when hundreds of thousands of farmers went out of business and were pushed off the land.
But it's not just farms that have gotten bigger and more consolidated. The driving force for a lot of these changes has been the industries surrounding agriculture: the processors, traders, food and crop insurance companies and farm input suppliers. In short, agribusiness. Although there were already some major players in this sector dating back to well before the first Farm Bill, agribusiness has grown dramatically since then. Over the past century, and especially in the last few decades, companies merged and grew, putting smaller rural Main Street businesses out of business and starting to exert more pressure over what agriculture would look like. Just like the landscape of farms themselves, the landscape of the food system and the distribution of money and power has become more concentrated, less diverse and less resilient.
For this episode, I talked to Patty Lovera from the Campaign for Family Farms and the Environment, and Elston Tortuga, previously of Iowa Interfaith Power and Light, now with the National Young Farmers Coalition, about how consolidation has shaped our food system over the past few decades, what this has meant for farmers and rural communities and what it has to do with the Farm Bill.
My name is Patty Lovera and I do food policy work. I'm based in Washington, D.C. I work with a coalition called Campaign for Family Farms and the Environment that IATP is one of the members of. Really looking for things that we can take on that prop up what we call the factory farm system.
So, the phrase we use a lot is “consolidation.” The short version of the trend is just kind of a narrowing of options, which sounds funny. It sounds funny at first to a lot of people because if you walk into kind of a, you know, present day big-box grocery store, supposedly we've never had it so good, right? We have choices on top of choices. The ketchup comes in 30 colors and different bottle sizes, right? Like just look — how could you say, you know, there's a narrowing of options? But there actually are in the places of our food system. If you were mapping it out as a system, we have a lot of choke points. And one visual that a lot of folks use is an hourglass.
So, if you look at the hourglass, and at the top, there's people producing food, there's still a lot of people trying to raise food (not as many as there used to be — that's one trend). There's even more people at the bottom of that hourglass who are consuming food and getting it somehow. But where we've seen a lot of narrowing, if we're kind of mapping the players in the food system, the middle of that hourglass, is a lot narrower than it used to be in general and in each piece of the food system, you know, livestock, grain, vegetables, processed foods, whatever it is, there's actually fewer options than there used to be.
So, what do we mean by the middle of the hourglass? Those are the grain traders, processors, meat packers, food and beverage companies, even grocery chains. Most farmers don't sell directly to consumers, which makes sense, of course, because they just don't have the capacity to process, package and distribute their products to millions of people. So, producers grow the raw materials that they then sell to traders and processors and on down the supply chain who turn those materials into consumer goods and distribute them around the country and around the world. Processors, like meat packers and food companies, benefit from a large supply of interchangeable, cheap commodities so that they can be the ones to add value to the end product and reap the profits.
Then, of course, there are also the companies that sell the seeds, inputs and specialized equipment that are needed to farm under this system. Those companies have consolidated also and sometimes merged with other parts of the supply chain in what's called vertical integration, a feedback loop of profit and control. Like how Bayer Monsanto, an enormous recent merger, by the way, sells Roundup, a glyphosate-based herbicide, as well as Roundup Ready soybeans, or how Cargill sells seed crop inputs, grain, animal feed and meat.
So, when we talk about consolidation in the food system, we’re actually talking about power in the food system and its economic power. And, people, that makes sense to people, right? Like those are the price setters. You know, they're setting the price for what farmers get for that raw material. They're setting the price for, you know, what I pay at the grocery stores as a consumer. There's a lot of other power that comes with that. There's a lot of decision-making power. How are those crops going to be raised and where are they going to be raised? Who's going to raise them. You know, how are they going to be treated? How are workers in the system going to be treated? What rules are we going to follow? What rules are we going to have?
There are a whole set of issues about how big companies get, and one mechanism to get bigger is through mergers or acquisitions. Companies combine to become bigger. There are laws about that, and for a generation now, since the Reagan era, the thinking from the government about what mergers should be allowed to go through has been pretty lax and used really inadequate tools to say, “how big is too big?” Because for a long time all the companies had to say was you promised the lower consumer prices, and so the economic term was “consumer welfare” and one that usually did not turn out to be true because as companies got bigger, they bought more power. They don’t have a lot of need to lower prices, so they lower prices to farmers all the time. You see the price they pay for the raw materials drop, and prices for consumers rarely do, and never as sharply as the price that was paid to farmers.
And so the economists call that the “farm to retail price spread.” You have a lot of examples of those lines moving in opposite directions, which is not what we're taught in Economics 101 about how supply and demand work. If you got a great deal on milk, and you were a cheesemaker and you know, that's your raw material, and the price of milk collapses, you know, in a competitive market, you would drop the price of the cheese because your costs went down. In a consolidated market, you don't have to, right, because you don't really have that many other players who are coming at you, pressuring you to lower your price. And we have example after example of that.
In a competitive market, at least in theory, if a company is offering a bad price or engaging in harmful practices, customers and suppliers can take their business elsewhere. But when a company gets big enough to take over a market by merging with competitors or putting them out of business, or in some cases, by building a business model where barriers to entry are so high that competitors can't even get started, it becomes a monopoly situation, which can hurt farmers, workers and consumers. When one company gets so big that they're basically the only option, or when there are a handful of large companies that are all doing the same thing, the company or companies have the ability to set prices and exert control in a lot of other ways, especially in a political system where more money tends to mean more influence. When companies get that big and powerful, and they control the supply of something as vital as food, they can kind of, well, hold us all hostage.
Earlier this year, there was a member of congress who had inquired about, you know, a bad actor in the meat system: the company JBS. Lots of problems, you know, like child labor. You name it. What's going on in the Amazon? It’s a long list. I don't remember which member of Congress wrote a letter like why do they get government contracts? Why are they on your list for procurement? The federal government buys a lot of meat, right? And, in as many words, the letter back from the Secretary of Agriculture was like,
Well, they make the meat. Who else are we supposed to buy from? It was, you know, it wasn’t that blunt, but it was pretty blunt. If we’re going to get the product we need, that's who's running the market is big companies like this. So, we're now at a point where they have, you know, they have that much power because they have that much control.
In many ways, farmland consolidation and corporate consolidation in the agribusiness industry are the same problem, and the trends reinforce each other. One example of that is meat and poultry companies that own the meat packing plants, and often even the animals on the farm. They don't just control the market for meat, they're also able to exert control over what animal agriculture looks like in the U.S. We already know that CAFOs are a major source of greenhouse gas, and that they're devastating for local water and air quality, not to mention animal welfare. But for big meat companies crunching the numbers, it's very convenient to have a huge supply of animals coming from one source raised under tightly controlled conditions and at a price that the meat companies set. It doesn't hurt that the CAFO model also requires producers to set up very expensive specialized facilities and feed their animals a special diet, all of which converts back into profit for the agribusiness companies. Here's Patty on the rise of factory farms in the 90s and how once again, farmers were forced to get big or get out.
This change really came about from the early 90s to about 2000. It was a dramatic upheaval in the hog industry in the Midwest. Some meatpackers merged and got bigger, but we always had big meatpackers in the Midwest. But, we saw the rise of this confinement — this CAFO — model, and then we saw a rise of the big packers trying to go straight to big operations and do away with something that used to exist in a lot of Midwestern states that wasn't necessarily a livestock auction, but there were these buying stations and you had choices. And you know, it used to be, people would be like I have 100 hogs, they're going to be ready next week. I'm going to call the three buying stations that are kind of geographically doable for me. Who’s paying the most next Tuesday? All right, I'll make the best decision for me.
And very quickly over the period of a couple of years, the buying stations went away because the big packers weren’t dealing with them. So then suddenly, if you were small and you had 50 head or 100 head, you could go directly to what is now a JBS plant, three mergers later, and maybe they’d take your animals, but they don't want to procure animals 50 heads at a time, they want big truckloads. So, after a year or two of that, a lot of people stopped selling hogs because it just wasn't working for them anymore. And that happened very, very quickly and there was essentially a collapse in prices and a collapse in the number of farms raising hogs in the Midwest.
The loss of local processing infrastructure and the rise of big ag have in many ways meant a loss of opportunity and a hollowing out of rural communities. I talked with Elston Tortuga, a young farmer and previously a rural faith organizer with Iowa Interfaith Power and light, about what that's meant for them and the farmers they work with.
00:12:59 Elston Tortuga
My name is Elston Tortuga, and I use they and them pronouns, and I'm the rural faith organizer with Iowa Interfaith Power and Light. And our mission is to empower Iowans of faith and conscience to take bold and just action against the climate crisis. So, we work with Iowans across the state. And I live here on my partner’s Heritage Farm.
And I'm new to Iowa, and I'm also a beginning farmer. And so, from what I do understand, there used to be a lot more local food infrastructure. So we bring our cattle to meat lockers to do direct market orders and halves. And it was really hard to find our first locker date, you know, during the pandemic. And even now we have to do it months ahead of time. But like 30-40 years ago, there was a locker a block down the road, like a mile down the road. So, thinking about things like that, and having canning facilities or even like a poultry co-op, things like that, that just don't exist in Iowa anymore.
I mean, what a lot of people will do with their cattle is bring it to the sale barn where you're just going to get a far lower price. And so then I think you are kind of forced into scaling up or else you're just not getting a fair price for your cattle. And then I also know farmers who travel hours to get to – especially if you have small animals – to get to a processing plant that will do goats or sheep.
Like just the fact that there's not a lot of rural infrastructure or local food infrastructure, like our whole system is geared towards globalized food. Yeah, I mean also like thinking about the fact that there has been such a flight from Iowa means that there's just not a workforce. So, the locker that we have used is trying to expand their operation, so that they can take on more customers. But they don't have a workforce to do that. And that leads to a whole other host of, like, reasons that Iowa has become an undesirable place to be, which is really interlinked with agriculture but also linked with all these other policies. And the way that, yeah, our whole state has kind of been gutted.
It is not fun to live next to a CAFO. It is different than living next group diversified farm that had a couple 100 head is very different than with the next one of those with 10,000. It's different for neighbors, it’s different for workers, it's different for the environment. It's different for all of us in the way that these facilities use antibiotics, and the list goes on and on and on. And this change in the structure of the meat industry is part of that story.
Iowa IPL is one of many groups working to try to revitalize the countryside, organizing with farmers who center climate and environmental stewardship. But as many farmers reach retirement age, and with high barriers to entry for new and smaller farmers, land keeps getting bought up by the big actors, even corporations. And places like Iowa are trending towards further consolidation.
I think one thing that I wanted to talk about was, even as we are working with farmers that are in such different situations, like farmers who have inherited land are just so much better off than farmers who have low access to land. But even those who inherited land and are deeply invested in the industrial agricultural system are not benefiting from this system. Because from several farmers that we've heard from, their neighbors no longer live there. Because a lot of Iowa land is owned by absentee landowners who aren't there and who might not treat the land the way that, you know, someone who lives there would treat it. And then you're also missing out on community.
And then an uncertain generational transition. So for those who were younger, talking about land acquisition and then for those who were older, talking about who they were going to give their land to, because some people don't have kids or their kids aren't interested in farming. So it is scary thinking about, like, already a lot of our land is in the hands of people out of state, or maybe live in a different part of the state. So what will that look like if our whole state is no longer inhabited by people?
On our farm kind of our motto that we say to ourselves is we're trying to bring people and wildlife back to the land. So thinking about how rural Iowa has emptied out and you know, I came into Iowa at this, like, really divisive political moment and like after it's been really emptied out. And I think I'm hoping that we're going to turn it around.
In spite of all the consolidation we've seen and the pressure to expand, the majority of farms in the U.S. are still small, with about 89 percent making less than $350,000 of gross income – before expenses – per year. Most of them a lot less. Most farmers actually need to supplement their earnings with other jobs or off-farm income in order to get by. But the large farms take up the majority of the lands and a majority of the production and profit, funneling more money into fewer and fewer hands. The largest operations only make up about 5.4 percent of farms in the U.S., but they account for 64 percent of production and they're the ones most represented by powerful agribusiness lobbying groups, like the Farm Bureau, who help make sure that the Farm Bill keeps reinforcing the status quo.
So, is there another way? What role can the Farm Bill play in reversing consolidation, or at least slowing it down and making the food system a more level playing field? One piece involves limiting corporate ownership of farmland. The Farmland for Farmers Act, recently introduced by Senator Cory Booker, would prioritize independent, non-corporate farmers for Farm Bill programs and land sales. Other solutions have to do with competition and transparency, both on the consumer end and for producers, especially in the meat industry. The Packers and Stockyards Act (PSA) is one of USDA's most important enforcement tools to make sure farmers are treated fairly in the marketplace, especially as the power of big meat companies has grown. But the PSA has been weakened over the years and for too long, enforcing it has been an afterthought at USDA. Here's Patty again.
We did not get into this mess overnight. This took decades and it took a lot of decision making, so it's going to take a lot of decision making and a lot of policy change to get us out of it. There's lots of things that would help, and they may not have consolidation in the name. They may not have antitrust in the name, but there are things in the Farm Bill that could help. One that I would kind of put in the middle would be creating a position at USDA to be in charge of enforcing the Packers and Stockyards Act, come up with a strategy, just kind of formalize and hopefully elevate that role. So the bill is called Meat Packers Special Investigator Act.
And then if you go further out — this I think sometimes takes explaining, but we see it as competition reform — is Country of Origin Labeling. So, we had mandatory Country of Origin Labeling, which let consumers know in products where the animals were born, raised and slaughter. People had seen, especially in in beef, had seen some benefit from that in their prices for U.S. producers, and we've missed it since then. So that's something to bring back in the Farm Bill. So, it doesn’t scream “antitrust” to people, but it makes the market work better, right? It would give people information and let them act accordingly. And U.S. producers really want it back.
And then there is — to keep going on this spectrum of kind of like, really meaningful stuff — there's several package bills that have great stuff in there. So, there's the Farm System Reform Act. There’s a new bill, it’s like two weeks old, I think it’s the Fairness for Small Farmers Act. And the package deals that say we're doing this wrong on mergers and we should change the procedures. We shouldn’t build new CAFOs. We should put in law what we’re trying to do in the rules with the Packers and Stockyards Act. So the package deals (I'm not going to go through the whole thing), but they're really like hard hitting packages of competition reforms. I'm not necessarily betting my life they pass in this Farm Bill because of the politics of this Farm Bill. But we have to have them in the discussion to point to them and be like, this is what we really need.
There’s things you have to do outside the Farm Bill, right? You need these updated merger guidelines finished. Ideally, we’d actually have a different system for evaluating mergers. And folks are having this conversation in banking, in big tech, in healthcare, like there's a new conversation happening about anti-trust. And other laws would help us too, but in the Farm Bill, there are those specific things. There's a bill that sounds really tiny, but — I think it's Senator Smith from Minnesota — would make it somebody's job at USDA to study consolidation, which doesn't seem like we should need to do in the Farm Bill, but we do.
Yeah, I don't think it's shocking to anybody who's listening to a podcast on the Farm Bill that, like, corporate voices are pretty loud in this process and have been for a long time. And those companies claim and their trade associations claim that they speak for everybody. And we have a system in which economic power translates to political power. We know that. Having said that, you know we are chipping away. I think that the food movement has done a good job of creating a lot of support for alternative ways of doing things of local foods and the need to be rebuild the infrastructure. But I don't think we are going to grow our way out of those tiny percentages without taking on what the big companies. Because they're not going to give up that space.
Once again, a food system this out of balance isn't just bad for farmers, it's bad for all of us. Concentrating the food supply in the hands of just a few makes us vulnerable to price spikes, market disruptions and shortages.
You know this problem is in the news. Why is there a recall of 500 million eggs? Yes, we have to talk about salmonella, but could we also talk about why does one company control 500 million eggs? Five years ago, if we had said, you know, there's not enough meatpackers, people on both sides of the aisle would have been like, “why do you work control hats in your head? And why are you speaking gibberish?” Like it just wasn't out there. And one positive is that it's out there now. No one is denying that, like, the markets broke down. In lots of agriculture, but especially livestock. And that consolidation made us vulnerable, right? Not having any redundancy in this system did not work out well. People understand this now. I mean, I — we have cracked through that barrier of people understanding that it matters that a couple of companies have that much control. Like fill in the blank: for workers, for food safety, for the environment. So now the question is: what do we do next?
Here's Elston again.
It is really overwhelming, but we did hear a lot of hope from farmers about seeing young farmers or seeing that there are people moving back to Iowa. We held a meeting at the Quaker Friends meeting house over in Earlham and heard that there's like two new, small regenerative farms near them. And then we're also talking about supporting the development of rural economies and communities in ways that reduce greenhouse gas emissions, shifting power to farmers and people in rural communities, and away from consolidated power and corporate control in ag and food systems. And like, we know, we live in a beautiful state. Industrial ag is only like 100 years old now, right? So it hasn't always been this way. And things will change.
On the next Farm Bill Uprooted, we'll talk about what's being done to shift that power and rebuild local food systems, and about what the Farm Bill means for its biggest group of beneficiaries: the eaters.
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