How 4 companies control almost all the meat you eat

Bernice Napach
Daily TickerFebruary 19, 2014

If you're a meat eater you've probably noticed a bigger food shopping bill lately.  The price of lean ground beef and bacon is about 20% higher than a year ago while the price of chicken breast is almost 6% higher--all well above the 1.5% increase in the CPI.

Meat prices have been rising steadily since 2006 because of the power of a few companies, according to Christopher Leonard, author of the new book The Meat Racket: The Secret Takeover of America's Food Business. He defines meat, by the way, as beef, chicken and pork.

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Four companies produce 85% of all the beef in the United States: Tyson Foods (TSN), JBS (JBSAY), Cargill and Smithfield Foods, Leonard tells The Daily Ticker. These companies have the "market power to depress what they pay farmers while at the same time keeping prices higher...for consumers," Leonard explains in the video above.

And that's not the only way consumers pay for this "monopolistic situation," says Leonard. 

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When farms that provide animals to the big four producers go bankrupt -- which they often do, says Leonard, because producers like Tyson put the squeeze on them -- U.S. taxpayers pay that bill too. An "obscure loan program bails out banks for about 90% of the lost loan value," says Leonard.

The American Meat Institute had this to say about "The Meat Racket":

"Mr. Leonard’s criticisms of the meat and poultry industry should be examined against its results. If a competitive industry that operates under the most intensive regulatory and inspection regime in America and still produces the safest, most varied, most abundant and most affordable food supply in the world isn’t good enough for Mr. Leonard, then we challenge him to point to a nation with a better system. While waiting for that answer, we’ll keep on providing meat and poultry to the 95 percent of Americans who routinely make our products part of their diets."

The former AP reporter hopes that his book raises awareness of these food power structures that have been "hidden for a long time." He also hopes that Washington legislators use anti-trust regulations to limit the power of the top four meat producers and increase the power of farmers.

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What are the odds of that happening? Almost nil, according to Leonard. "In 2010 and 2011 when there was a really ambitious reform agenda proposed by President Barack Obama, it was absolutely dismantled, pushed back and defeated by the meat industry lobbyists” and probably "did more damage than if they had not proposed to do anything" at all.

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