COWBOYS VERSUS MEATPACKERS: THE LAST ROUNDUP - Foodopoly: The Battle Over the Future of Food and Farming in America - page 97

corporations that control the entire global agricultural system. As of 2007, Cargill's feedlot business was
the third largest in the United States, feeding seven hundred thousand head each year. In 2010, Cargill op-
erated three cattle feedlots in Texas, one in Kansas, and one in Colorado. It holds at least as much power
in the Canadian beef industry: according to the Canadian National Farmers Union, after XL Foods ac-
quired Tyson's Canadian beef operations in 2009, Cargill and XL Foods controlled over 80 percent of beef
slaughter in the country. 11 Cargill also has beef operations in Argentina and Australia. 12
Tyson Foods, best known for producing poultry, is also a major player in beef. If the entire amount of
hamburger the company produces were shaped into quarter-pound hamburgers, it would circle the globe
ten times. Arkansas-based Tyson Foods was founded in 1935 by John W. Tyson, who began hauling chick-
ens from Springdale, Arkansas, to market in Kansas City and St. Louis. In 1936, he delivered his first load
of five hundred chickens to Chicago, netting a profit of $235. He wired the money home with a message to
pay his debts and buy more chickens. By the late 1940s, Tyson had entered the feed and hatchery business.
By 1958, with the addition of a slaughtering facility, the company had become fully vertically integrated.
John W. Tyson also originated the idea of attaching chicken coops to a flat-bed truck for long-distance
hauls, a system that is still used today. 13
Tyson acquired dozens of other companies through the 1990s, and in 2001 it entered the beef business in
a big way by acquiring IBP, the world's largest supplier of beef and pork at that time. Today, as the second-
largest meat producer in the world, Tyson Foods has 114,000 employees in four hundred facilities. It says
it is in the business of providing protein, and each week it slaughters approximately 450,000 cattle. 14
JBS's founder, Brazilian Jose Batista Sobrinho, began with a small farm and slaughtered one or two
cattle every day to sell to butcher shops. In 1953, he acquired a small slaughtering plant that killed five
head every day, and in 1968 he began acquiring other facilities. 15 Today the company has 128,000 employ-
ees and operates on every continent. It began expanding in Brazil in the 1970s, and in 2005 it acquired its
first foreign company, Swift Armour, Argentina's largest beef processor, followed by the American com-
pany Swift Foods in 2007. It went on to acquire companies in Australia, Europe, and Latin America, and
bought the U.S.-based giant Pilgrim's Pride, the largest poultry company, at a time when it was facing
bankruptcy. 16
JBS used an alliance with Brazil's development bank and an aggressive acquisition strategy to make the
company the largest purveyor of meat in the world. It went public in 2007, raising $5 billion, and went
on a buying spree when cattle operations in the United States were struggling. Today, six of Jose Batista
Sobrinho's children are in management, including his son Wesley Batista, who is chief executive of the
company. Their strategy is global, focusing not only in the United States, but in Russia, China, and the
Middle East. 17
While significantly smaller than Cargill, Tyson, or JBS, National Beef is the fourth-largest processor,
slaughtering 3.7 million cattle in 2010. Based in Kansas City, Missouri, the company also has operations in
Kansas, California, Pennsylvania, and Georgia. It processes and markets fresh and case-ready beef, which
is packaged for sale at retail stores; beef by-products; and leather. It is owned by U.S. Premium Beef, a
vertically integrated company that produces cattle and processes and markets beef under a number of brand
names.
These four companies enjoy a level of concentration that allows them to exert vast power over the
market, resulting in tremendous leverage over independent cattle producers. The pressure to sell to larger
meatpackers has encouraged independently owned feedlots to get bigger, in part to compete with the large
meatpacker-owned ones. Because the large beef packers now also own their own cattle and operate feed-
lots, thus controlling supply through all stages of production, they have reduced their need to buy from in-
dependent and small operators. Packer-owned feedlots enable the meatpackers to drive down cattle prices,
keep consumer beef prices high, and push down the prices paid to producers. Because meatpackers own