Mark Fix: Working Collectively
for Fair Cattle Prices
On August 9th, 2019, a fire ripped through a Tyson beef slaughterhouse in Holcomb, Kansas. Within a week, prices meatpackers received for beef more than doubled, but prices ranchers got for their cattle continued their downward spiral. The reason given by industry for the price changes was that with so few meatpackers in the US, beef buyers were scrambling to make up for the disruption, and since there was one fewer buyer of cattle, there were suddenly too many cattle on the market.
Whether these price fluctuations, which only seemed to benefit the big meatpackers, were artificial or not, it’s a perfect illustration of how corporate consolidation is creating a more fragile food system. The packing plant was relatively small, serving only about 5 percent of the US market, but the ramifications rippled through the food system, hurting both farmers and consumers, but vastly enriching the packers.
Montana rancher Mark Fix has watched prices for his cattle fluctuate for almost three decades. He sees the Tyson fire price instability as a momentary blip. It’s the undue influence that agribusinesses have on the markets causing real danger to the livelihoods of both ranchers and consumers.
Mark farms and ranches in the Tongue River Valley about 20 miles south of Miles City, Montana. The Tongue River winds its way through his ranch, creating a swath of vibrant green below the dusty yellow bluffs of the eastern Montana badlands. Century-old cottonwoods tower over the creek shading a few of Mark’s 250 or so cattle from the harsh sun overhead.
“We’ve always loved eastern Montana,” Mark said. “We’ve always had really clear skies and it’s open and not too many people. It’s a nice area to live.”
Mark started ranching in 1991 after a stint in Seattle working for Boeing. Mark grew up in Ekalaka, Montana, and as his boys were growing up they thought it was time to go back to Montana.
“We thought, man, wouldn’t it be nice if they could grow up on a ranch so they see what the lifestyle is?”
They wanted the boys to be exposed to working with animals and learning things that they wouldn’t be exposed to growing up in a city.
How ranching a cow/calf operation works
Mark grew his herd from a few cows he purchased by cashing his retirement from Boeing. For a few years, they ran cattle for other people or rented their land to get by.
“We slowly built our herd up, and worked our way out of running other folk’s cattle until we had enough of our own,” Mark said.
Like most farming operations, Mark’s ranch must make money in a variety of ways. The biggest money-maker is selling calves to feeders who take them from 500 pounds to 1500 pounds or more. These feeders are the markets that Mark and other cow/calf ranchers rely on to keep them in business. Mark takes his calves to one of the regional sale barns where feeders bid on them. Like all auction situations, the more feeders bidding on your calves, the better. Vertical integration by the big meatpackers, however, means that feeders are disappearing.
“We’re getting squeezed more and more all the time,” Mark said. “It seems we just aren’t having as many markets to go to anymore. There’s concern that the feeders might totally disappear. We hope that doesn’t happen. We hope that we can keep the feeders going so that we can continue to be more independent.”
Mark explains that chicken farming is so vertically integrated that corporations like Tyson control the whole process from egg to plate, often trapping the chicken farmer through predatory contracting. Without feeders, the meatpackers will be able to exert control over the whole supply chain, ensnaring independent ranchers.
The feeders are also feeling the pinch as meatpackers consolidate. Not only do meatackers have the power to dictate prices, but since they fought against Country of Origin Labeling (COOL) and won, they have imported cheaper cattle from around the world, driving prices down further.
“We got flooded with Canadian cattle being sold as US beef,” Mark said of the market since 2016 when the COOL repeal went into effect. “So that basically made it really tough for our beef to get the value it deserves.”
As struggling feeders close down, there are fewer bidders at the sale barns. That, in turn, drives prices down for the cow/calf operators.
“Once we got Country of Origin Labeling, it seemed like the markets did really well,” Mark said of the time between 2003 and 2015 when the COOL requirement was enacted. “It was over two bucks a pound for steer calves.” Now, the prices have dropped again. “The feeders are getting hit real bad,” Mark said. “They haven’t been able to get very good prices for their beef. They are just dictated by the packers and it really makes it tough to get a decent price.”
Fighting vertical integration
“When you get too monopolized and too few packers, it just gets to the point where you’re not having a competitive market anymore,” Mark said. “We definitely need to get some changes in the Packers and Stockyards Act, so they break up the monopolies or do something to make the markets more open. I think it needs that kind of shake up again to get things back on track.”
The Packers and Stockyards Act (PSA) was a reaction to massive price fixing and other anti-competitive practices by the five big meatpackers in 1921. Their actions were considered so egregious that the Federal Trade Commission (FTC) recommended federalizing stockyards and related facilities. Over the last century, the Packers and Stockyards Act has been weakened through watering down the rules and defunding enforcement. Weakening these protections has led to massive consolidation in the meat industry. Just four meatpackers control 84% of the market. For context, in 1921, when the price-rigging and fraud was so bad that the FTC considered taking over the stockyards, the big five packers controlled just 49% of the market.
“To keep the family farmer and rancher going, we need to have more open markets and more diversity, not just everybody forced to work within one system.”
Mark sees other ways to keep family ranching alive. The slow rise of mobile slaughter facilities around the US is an idea that intrigues him. While Mark doesn’t see himself finishing many cattle on his place, he does think mobile processing could help feeders compete with the big packers. Having a healthy number of feeding facilities competing for the calf crop means higher prices for ranchers. It also means more independence throughout the beef production system.
Ranchers are not alone in this fight
Mark believes that being a member of organizations like Northern Plains Resource Council and Ranchers-Cattlemen Action Legal Fund United Stockgrowers of America (R-CALF USA), among others, can be a big help in the fight against corporate consolidation. Northern Plains was instrumental in pushing for Country of Origin Labeling and, after the COOL’s repeal in 2015, in organizing around its reinstatement. R-CALF USA has also been in the fight for decades, most recently by filing a 2017 lawsuit alleging that producers and consumers were being harmed by allowing foreign meat “to be passed off as domestic product.”
Being part of multiple organizations allows him to support the fight on multiple fronts from lawsuits to grassroots pressure.
“We just got to keep pushing in every which direction to try to make change,” Mark said. “It’s something that maybe we can’t do individually, but working all together, we can.”