COWBOYS VERSUS MEATPACKERS: THE LAST ROUNDUP - Foodopoly: The Battle Over the Future of Food and Farming in America - page 96

By the 1980s the stampede to consolidate had greatly intensified. President Reagan's Department of
Justice was anxious to rewrite and weaken antitrust law. The agency filed a friend-of-the-court brief in sup-
port of Cargill/Excel, which was attempting to merge with Spencer, the nation's third-largest beef packer.
Monfort, at that time the fifth-largest beef and lamb packer and distributor, tried to stop the merger, and the
company's president was quoted in the New York Times as saying that it “scared the hell out of him.” 6 Car-
gill appealed to the Supreme Court, winning in a 6 to 2 landmark decision that restricted companies like
Monfort from filing private antitrust suits to block competitors from merging. By 1990, three companies
dominated the meatpacking industry: IBP (now owned by Tyson Foods), Excel/Cargill, and ConAgra.
As consolidation increased, meat recalls became common. In July 2002 ConAgra recalled 19 million
pounds of E . coli-contaminated beef in twenty states—then the second-largest recall in history. The giant
food processor now concentrates on prepared foods, grain milling, and industrial seasonings and flavors.
And in the last twenty years, the consolidation has continued to keep up with retail consolidation.
One of the other major changes in the beef industry is boxed beef. Pioneered by IBP, the process in-
volves cutting up the carcass at the packing plant and delivering it in vacuum-sealed bags to wholesalers,
supermarkets, and fast-food restaurants. This so-called technical advance has resulted in the large grocery
chain driving further consolidation of the meat industry. Today, the big-four grocery chains that make more
than 50 percent of sales are interested in dealing with only a few wholesale suppliers. Walmart, with its 20
percent market share, wants a large, steady stream of product from as few sources as possible. The same is
true of fast-food restaurants, which buy large amounts of beef. They prefer to deal with large meatpackers
that can supply high volumes of meat.
The Meat Price Investigators Association, a legal action group formed by five hundred operators of
feedlots, was involved in several lawsuits against meatpackers and grocery stores in the late 1970s and
early 1980s. The association found that “the supermarkets control the ultimate consumer demand for beef
by the specials they feature in their meat departments. If the wholesale price of beef threatens to move
higher they lessen the demand for beef by either raising their prices to a level where consumers hesitate to
buy or feature other items, such as poultry, ham, etc.” 7
Of the roughly sixty-seven pounds of meat that each American consumes per year (on average), 65 per-
cent is eaten at home and 35 percent is consumed at restaurants and from food service businesses. Midwest-
erners lead the nation in consumption, at seventy-three pounds, followed by Southerners and Westerners,
at sixty-five pounds each. Rural consumers eat more than urban and suburban consumers, and low-income
consumers eat more beef than households of other incomes. 8
Ground beef is the only type of beef eaten more often at restaurants, with McDonald's, Burger King, and
Wendy's representing 73 percent of all fastfood sales that include hamburgers. McDonald's, as the single
largest buyer of beef, purchases a billion pounds a year at a cost of approximately $1.3 billion. The market
power of these fast-food chains, too, has led to more consolidation in the beef industry. 9
The end result is that beef packing is the most concentrated industry in the livestock sector. Feedlots
are getting larger in order to sell to an increasingly consolidated meatpacking industry, with just four
firms—by market size, Cargill, Tyson Foods, JBS, and National Beef—slaughtering more than 80 percent
of cattle today.
But the further processing of beef is becoming more concentrated as well. The top three players in beef
also dominate this part of the industry, with Tyson leading and followed by JBS and Cargill. Processing in-
cludes the production of ready-to-eat meals, frozen hamburgers and marinated beef, refrigerated prepared
foods, and canned products. For instance, JBS, with its international portfolio, manages a variety of brands,
such as Friboi, Sola, Swift, and Anglo, and makes various companies' private-label brands. 10
What are these corporations that control such a huge portion of our meat production and processing?
Cargill is not only one of the largest players in the meat industry, it's also one of a handful of powerful