The Daily Yonder's coverage of rural economic issues, including workforce development and the future of work in rural America, is supported in part by Microsoft.
[imgcontainer] [img:BullardTwo528.jpg] [source]Bill Bishop/Daily Yonder[/source] The U.S. has lost 1,000 ranches a month for the past 30 years, R-CALF’s Bill Bullard said at a meeting of the Organization for Competitive Markets last week in Omaha. [/imgcontainer]
Editor’s Note: We’d like to remind Yonder readers that the Departments of Justice and Agriculture will hold a hearing on competition in the livestock industry on August 27th in Fort Collins, Colorado. Details are here. R-CALF and other rural groups are encouraging a large turnout for this hearing. Details here.
Those two words stuck with me from a meeting of farmers and ranchers in Nebraska last week. It turns out the cost of providing livestock raisers a fair price for their cattle and slaughterhouse workers a living wage for their work preparing the meat for sale was a lousy two pennies on a pound of ground chuck.
Adding two cents on every pound in the meat counter would keep ranchers from losing money and turn slaughterhouse jobs from work into a living. Two cents a pound at the grocery would fundamentally change the economies of thousands of rural communities.
Bill Bullard explained the first cent. Bullard is with R-CALF, the cattle raisers organization. He talked at last week’s meeting of the Organization for Competitive Markets in Omaha about the dramatic drop in the share of each food dollar that goes to the rancher.
In 1980, ranchers and farmers got 63 cents out of every dollar consumers spent on beef. That dropped to 60 cents in 1990, to 49 cents in 2000 to 43 cents in 2009.
With ranchers taking a smaller share of each dollar spent on beef, cattle-raising has become ever less profitable. As a result, ranchers have been going out of business.
Since 1980, Bullard said, the nation has been losing 1,000 ranches a month.[imgcontainer right] [img:declineinbeefproducers.jpg] [source]R-CALF[/source] This chart shows the change in the number of cattle producers since the early 1990s. [/imgcontainer]
What would it take to return ranchers to at least operating profitability? One cent a pound at retail, we were told. That was it. One cent would change a money-losing business into one that breaks even.
That’s the first cent. Mark Luaritsen told us about the second cent. Luaritsen comes from Cherokee, Iowa, where meat production was the way people lived. “Where I grew up, you either raised it or you killed it,” Lauritsen said.
Lauritsen is a third generation slaughterhouse worker who is now International Vice President for the United Food and Commercial Workers Union. The UFCW represents 36% of the workers in the country’s meatpacking plants, which likely makes it one of the largest unions in rural America.
Lauritsen explained that his members were worried about the failure of so many ranch operations and the stagnant size of the country’s beef herd. Without more beef, there won’t be a call for more meatpacking workers. “We’re joined at the hip,” Lauritsen said to the OCM crowd, which is made up of older ranchers and farmers.
Lauritsen said the decline in independent ranchers is matched by a decline in independent feedlots.
“Until the mid-1960s, most feedlots were small, family owned operations that handled fewer than 1,000 head but marketed most of the beef cattle,” according to a report issued by Food and Water Watch. “Now, the largest beef feedlots finish the vast majority of beef cattle. In 2008, the largest 12.1 percent of feedlots finished more than 16,000 cattle and marketed nearly three-quarters (70.2 percent) of beef cattle.”
The increasing concentration of the meat industry has changed life in rural communities. With fewer ranchers, fewer independent feedlot owners and fewer meat packing jobs, “these just aren’t the same cities,” Lauritsen said. “That’s the downside of consolidation.”
Ranchers lose their land, feedlot owners lose their businesses and workers lose their jobs. More beef is imported and while the size of the U.S. cattle herd has stagnated, herds in the rest of the world have grown larger.
“That’s the connection” between ranching and labor, Lauritsen said. “When people lose their jobs, everybody loses. This is where we intersect, with schools and our communities.”
“The sad part is that there are so few of us left to fight,” Lauritsen continued. “There are fewer ranchers, fewer slaughterhouse workers, fewer union members. They have just kicked our teeth in.”
Despite rising food prices, Lauritsen said there is pressure on food employees to reduce their hourly wages. Workers at a Mott’s juice plant in New York State, for example, were asked to accept a $1.50 an hour wage cut. They went on strike and have been on the picket line since May 23.
Then he talked about the second cent.
“Look at what would happen if they added a penny a pound to the retail price of red meat,” Lauritsen said. If that penny went to workers in the slaughterhouse, the average wage of $13 an hour for a meatpacker would rise to nearly $16 an hour.
“”I will tell you, brothers and sisters, that that would make a dramatic change in a person’s lifestyle,” he said. “It would change the main street Cherokee, Iowa. It’s life changing money and it’s only a penny.”
Two cents, really. One cent for the people who raise the beef and one for those who carve it for the stores. You need both.