Agriculture needs a number of innovative minds to recover from the challenges we face from trade issues, lack of commodity demand, a pandemic, and continued oversupply in the markets.
Income success in agriculture for years has been based on producing more, even at lower prices, to hopefully cover costs. This strategy has created an oversupply of commodities that impact pricing in the future. There are only a handful of scenarios where we’ve seen a major price response due to demand – ethanol production, weather disasters and large sales to Russia nearly 50 years ago. The need to produce more has led us down a path of larger farms to achieve efficiencies that are never really achievable long term, and slowly killing rural America due to depopulation.
It is time we look at other strategies to develop profitable farms and ranches. We cannot continue our current methodology and expect to maintain our food security system, which was tested during the pandemic.
Take the current cattle industry for example. Less than six months ago, we were facing meat shortages with high prices for consumers while meatpackers were making record meat processing profits. Ranchers were not rewarded for the higher value of meat in retail stores and were basically unable to sell cattle into the market.
We have a number of multifaceted challenges.
First, 84% of all beef slaughtered in the U.S. is controlled by only four companies, two of which are foreign owned. We allow beef to be imported without labels of origin and without similar safety requirements that are expected of U.S. cattle ranchers. We stamp imported beef with “USDA Approved” labels, leading consumers to believe the beef they are buying was born, raised and slaughtered in the U.S. Further, we allow for volunteer labeling with no standards, once again misleading the consumer. At the same time, ranchers are told to expand their herds for efficiency. Then they’re told they are too good at production, so they’ll receive less per pound for their product.
One would think all of this was enough to create change in our food system, but there is more. Large processors are effectively removing themselves from the open market, artificially lowering demand by locking up much of the beef production in some form of contract or with packer ownership fully integrated into the production system. During all of this, our Department of Justice, Congress and the Administration stand by and allow current laws prohibiting these monopolistic practices to be ignored.
We need innovative minds to search for solutions. Remember, these challenges are not unique to just cattle and can be found in all commodity markets. The current approach of simply growing and producing more, allowing corporate agriculture, ignoring monopolistic practices, and allowing the attempt to fully integrate our food production system, will simply lead us to a lack of food security, higher prices for consumers and an unsustainable rural America.
We need strategies that match production to supply, demand and security needs. We need to create new demand to allow markets to support farms and ranches. We should not encourage expansion of production without knowing where we will sell this production and at what price. We should not lower our safety standards and minimize labeling laws to allow for cheaper, less safe food products to enter our food system. We should fix the farm bill to be a true farm support program and food security system.
It is time for us to have these discussions and bring together innovative minds. Our strategy of overproduction, without anywhere to sell product, only allows monopolistic processors to garner a profit. Our chase to the bottom to find the lowest price at which we will sell our production, only leads to further economic deterioration of family farm and ranch success.
– NDFU president Mark Watne