Mega-Mergers Are As Guilty As The Pandemic For Our Broken Food Supply Chain

Dairy farmers dump milk while hungry folks line up for hours at food pantries. Ranchers euthanize livestock while meat disappears from store shelves. These paradoxes are becoming familiar during the COVID-19 pandemic. Big Ag has long gaslighted us into believing that our modern food system is resilient and capable of delivering an abundance of food. But the virus is toppling that lie like a house of cards, laying bare how vulnerable our food system really is in the hands of a few powerful corporations. 

Big Ag Consolidation Made Our Food System More Vulnerable To COVID-19

We can point fingers at COVID-19 for knee-capping our food supply chain, but the fact is its resiliency was worn away by decades of unchecked corporate consolidation. In meat processing, for instance, the top four beef processing companies slaughter 80 percent of cattle in the U.S., up from 35 percent in 1980. The top four hog processors slaughter two-thirds of all hogs. These corporations bought out smaller competitors and shifted to large, centralized plants that process millions of carcasses per year. So when just one hog plant in Waterloo, Iowa closed due to a COVID-19 outbreak, it took four percent of U.S. hog processing offline, leaving thousands of growers nowhere to take their livestock.

A few decades ago, growers mostly sold hogs on the open market, with processors competing to offer the best prices. That means a single plant closure would not have had such a devastating impact. Today, however, with the majority of these smaller, independent processing facilities wiped out by giant competitors, many farmers have no option but to euthanize their herds. Dairy farmers face similar dilemmas, since they also experienced rapid consolidation and a shift to larger processing facilities. With demand for milk from schools and restaurants plummeting — and smaller processing facilities that serve local regions almost extinct — many have no choice but to dump their milk.

Tell them to stop these mega-mergers and protect our food and workers!

Mega-Mergers Worsened Labor Conditions and Increased Environmental Costs  

As the meat processing giants increased their market power, the working conditions at their packing plants worsened. Unions waned, wages were cut, and conditions became more dangerous. Today’s slaughterhouse workers suffer from higher rates of reported injuries and illness than the manufacturing sector overall. Workers are crippled by dangerous machinery, sickened by toxins and pathogens, and suffer musculoskeletal disorders from repetitive movements. Two amputations occur every week at a U.S. slaughterhouse, according to an estimate using government data.

The COVID-19 pandemic makes it clear that meat processing giants are willing to let workers die to keep turning a profit. Crowded, poorly disinfected slaughterhouses make workers vulnerable to COVID-19 outbreaks, especially when they are not provided or allowed to wear masks, and pressured to show up while sick. As of May 21, over 16,500 U.S. slaughterhouse workers have been infected by COVID-19 and over five dozen have died. Companies like Tyson are pressuring government officials to let them stay open, claiming they are feeding America during this crisis, while continuing to export record amounts of meat overseas. 

Large slaughterhouses rely on a stream of low-priced livestock from factory farms across the country. The 1.6 billion animals on U.S. factory farms produce an estimated 885 billion pounds of manure each year — roughly twice the human sewage of the entire U.S. population. This and other factory farm waste create toxic air pollution, damage our waterways, and make life miserable for communities far away from these corporations’ headquarters.

This Consolidation Is Stomping out Smaller Family Farms

Meat processing companies have also “vertically integrated,” getting a cut from every step in the supply chain — from feed production to the genetic patents for livestock. 96 percent of broiler (meat) chickens are grown under production contracts, meaning growers don’t own the birds but raise them using feed and medicine they’re only allowed to get from the integrating company, which also slaughters and processes the birds. These contracts can be one-sided and abusive, making it difficult for contract growers to repay the massive debt they incur to build and maintain their chicken houses. 

Farmers raising their own livestock can’t get away from corporate giants’ reach either. Farmers’ share of beef sales dropped 8 percent over the past twenty years while the supermarket cost of ground beef surged 70 percent. This is because large beef processors use their market power to drive down cattle prices, then turn around and sell beef products at inflated prices. 

Virtually no agricultural sector is free from rampant industry consolidation. Today’s corn farmer buys seeds from a market where four companies control 85 percent of all sales. This farmer buys her herbicides and pesticides from a similarly concentrated chemical market. Then she sells her corn into a grain trading market where the top four companies control nearly 90 percent of all purchases. As a result, she has seen her costs rise significantly over the past few decades, while farm gate prices for corn have barely budged. 

This level of market power hurts farms, with about half of all farms generating negative net income each year. Farm debt is at an all-time high, causing more than 10,000 farm foreclosures each year and raising fears that small farms are “nearing extinction.” Rural communities bear the ripple effects from declining farm wages and local spending, leading to closures of essentials like grocery stores and medical facilities. 

These Giant Mergers Continue. We Need a Moratorium Now.

In 2013, the Chinese pork company WH Group purchased Smithfield Foods, becoming the world’s top pork producer. Two agricultural chemical giants, Dow and DuPont, merged in 2017, followed by the Bayer-Monsanto merger in 2018. Our federal agencies that should have blocked these deals sanctioned them instead. Now, during the COVID-19 pandemic, the Federal Trade Commission (FTC) and U.S. Department of Justice (DOJ) resumed a policy to minimize merger review processes, inviting a wave of new mega-mergers while the public is distracted by the pandemic. Moreover, there is worry that stimulus funds intended to help farmers and small businesses will be grabbed by large agribusinesses, helping them to buy out struggling competitors and worsen these problems even more. 

We need a merger moratorium immediately. The Food and Agribusiness Merger Moratorium and Antitrust Review Act, introduced by Sen. Cory Booker and Rep. Mark Pocan, would place an immediate 18-month moratorium on agribusiness mega-mergers. The bill would also create a commission to review current industry concentration levels that have a stranglehold on both farmers and consumers. Congress must pass this and stop the dangerous path toward even more market consolidation. 

We cannot shop our way out of this problem. We need to hit the pause button on mega-mergers and review how current concentration levels harm farmers and consumers. 

Will you urge your members of Congress to co-sponsor this crucial bill?

Fight like you live here!