“Don’t put all of your eggs in one basket.” This saying goes at least as far back as Don Quixote, written in 1615, and is probably much older. While the proverb’s wisdom is obvious to anyone who has spent much time in a barnyard, some of the people who should understand it best have strayed much too far from its warning.
Today more than 80 percent of American beef is processed by only four companies. Just three companies control 63 percent of our pork. Five companies process over 60 percent of our poultry. We’re putting far too many eggs in far too few baskets.
Unfortunately, the owners of processing plants aren’t the only thing that has grown larger. In fact, the processing plants themselves have grown dramatically in recent years. The largest pork processor in the country, Smithfield’s facility in Tar Heel, North Carolina, can process 34,500 hogs per day. This single location accounts for seven percent of the national daily supply. Seven other plants can process over 20,000 head daily. Each of these individual plants handles more than four percent of national production.
When even one of these consolidated plants slows down or shuts down, it can impact the national meat market. We saw this in the spring as COVID-19 infections among workers in several large plants sent the supply chain haywire.
When a mega processor takes the place of the smaller processors in an area, local farmers are often left with only one buyer for their animals. If that large plant closes or slows down, the farmer might be left with few, if any, other options.
We have written recently about efforts to investigate possible collusion, price fixing, or antitrust violations in the meat industry. Missouri Farm Bureau supports these investigations. We need to get to the bottom of any wrongdoing.
In the meantime, some lawmakers are proposing legislative options to support meat and poultry producers. The Direct Interstate Retail Exemption for Certain Transactions (DIRECT) Act, introduced by U.S. Representatives Dusty Johnson (R-SD) and Henry Cuellar (D-TX), would allow state-inspected meat to be sold across state lines through e-commerce. This novel solution would loosen up an old-fashioned regulatory regime designed for the early 1900s.
If this bill were to become law, states like Missouri could hire their own trained inspectors to ensure healthy, quality products were being shipped from the Show Me State to consumers nationwide. Consumers are craving more options to buy meat direct from small producers. The DIRECT Act would cut through red tape and reduce dependence on big packing houses for our protein. Missouri Farm Bureau members have long supported the ability of state-inspected facilities to market products across state lines as long as they meet proper inspection standards.
Many more novel ideas to diversify the meat industry are being kicked around the halls of Congress and among legislators in Jefferson City. We need to continue looking for unique ways to restore flexibility and resiliency to what has become an old, broken system.