Ranchers Get Burned as GLOBAL MONOPOLY Captures 80% of Beef Market

Probably most people watching this video have noticed that the price of beef has significantly increased in the last little while. I mean, just in the last few weeks alone, a steak that would have cost me, let's say, like $12 now costs $16 to $18. Also, packets of ground beef have gone up by like 20%. And data from the USDA, it shows that this is not a small phenomenon here in New York. Instead, the price of ground beef and beef in general has actually shot up quite a lot since the beginning of 2025. And if you're just listening to this episode and you don't see the graph that's up on the screen, it's basically a straight line up from January up until right now. Now, according to this report from the USDA, one of the main drivers of this price hike is simple supply and demand. There's a lot of demand, but also at the same time, there's a record low in terms of the number of beef cattle. Quote, there were 94.2 2 million head of cattle and calves on US farms as of July 1st, 2025. That is, just for your reference, the lowest July midyear headcount since the year 1973, back when the US population was 211 million people. Now, the reason for this cattle shortage is multiaceted and it partly stems from what's been happening in this country for the last 3 or four years, both economically and then also just in terms of the weather. Now, in regards to the weather, you might remember that there were severe drought conditions in both the western and southwestern parts of the US several years ago. That was when, among many other things, you had lake me nearly completely dry up to the point where you could just walk around the lake bed and find capsized boats that had been lying there for like 25 years. Now, this lack of water, it hurt the cattle industry significantly. You then combine that lack of water with record high inflation that was hitting everyone including farmers and ranchers during that period of time. And many people they chose to just sell their cattle instead of raising them to market. In fact, back in 2022 during the height of the drought, Miss Sarah Little, who is the spokeswoman for the North American Meat Institute, she explained what was happening in an interview. Quote, "When weather is dry and hot, there's not enough natural feed to go around. To sustain a herd, ranchers must bring in hay and feed prices sore, prompting ranchers to sell their animals a little early and often to sell heers, the young females, rather than keep them as breeding stock. This has resulted in lower beef prices for consumers in the short term. But signals that there probably will be a tighter supply next year and that is actually with the gift of hindsight exactly what happened. And according to a survey that was conducted at the time of that interview by the American Farm Bureau, they found large declines in cattle herds across many states with the biggest ones being in Texas which reported a whopping 50% decrease followed by New Mexico which was down 43% as well as Oregon which was down 41%. And so those cuts in cattle three years ago, they were again largely due to the sudden scarcity of water and then also forage as well as a spike in inflation. And regardless of the reason for why it happened, the end result was a lower supply of cattle, which then eventually led to a shortage of beef and then an increase in the price of the beef that did make it to the supermarket. And even though you might think it's just obvious, let me still read to you the specific reason for why inflation pushed the price of beef higher and gave so much pain to the farmers. Quote, "If it cost $200 to feed and raise a cow in 2021 to a market value of $600, imagine what the value will have to be when 2022's herd hit the same market seeking the same profit margin. If it costs $400 to feed and raise that same cow, it'll need to fetch a finished price in a fair comparison because each farm and ranch in America is a small business that must profit to survive or cease to exist. It's actually kind of amazing to read an article like this from 3 years ago and then look at supermarket store shelves today and realize that they were completely right. And ironically, even though the price that consumers are paying for beef has indeed skyrocketed, the actual ranchers are not getting rich from it because their costs have likewise increased substantially. And so basically, they are barely able to maintain their profit margins even as you and I are literally paying double for the same stake compared to just a few years ago. However, there is one other factor at play for beef cattle that doesn't exist in many other markets, which is the absolute consolidation that's taken place within the beef processing industry. You see, cattle ranchers, they're not only facing the weather as well as general inflation. They are also competing with the fact that there is a monopoly on beef processing with only four companies controlling 80% of the market. Now, a little while ago, I had the opportunity to sit down with the president of the US Cattleman's Association. It's an organization that represents the interests of American ranchers. And he explained to me how these giant conglomerates came to monopolize the industry and in that process drive American cattle ranchers out of business by the thousands. Take a listen. >> Cattle ranchers are going out of business and going broke all the time. And uh we've been losing thousands and thousands of cattle ranchers over the last several decades. And it's all based on the fact that we have four multinational corporations that dominate uh the pro the food protein industry. They uh have anti-competitive practices and u they basically steal a lot of money out of rural America. When when uh live cattle prices are high, rural America reinvests and uh it it it's very profitable. Um but for so many years um it's been unprofitable. We'll have a couple years that are profitable. Um and people will always, you know, the cattle ranchers are are some of the best uh businessmen in the world as far as being able to manage. They may not be the best businessmen by being in that in that uh avocation, but uh they're some of the smartest uh people that I know and uh they can somehow squeeze out a squeeze out a living when a lot of people couldn't. So when you say four companies control this industry, can you break that down a little bit further? Let's say let's say I want to start my own ranch. So I buy I buy up land, I I buy a couple of animals, I I you know begin the process of raising them, feeding them, etc. At what point do I have to interact with one of these four companies? >> Well, you may never have to interact with one of these four companies, but you'll feel the effects of these four companies. Most cattle producers across this this this country have a cow herd and they raise calves as their commodity and they sell those calves. They can sell those cavs anywhere from seven to eight months or they can own them all the way through the feed lot. Uh when they go from the cattle ranchers ranch, they're sold to different buyers uh who then grow those cattle and try to put on economic gains uh with lowcost uh foods. And then eventually they'll go into a feed lot where they'll be fattened um and slaughtered. And those are the cattle where the market breaks down is at the feed lot uh between the feed lot and the packer. The packer then purchases those cattle from feed lots, slaughterers them and then sells them to uh wholesalers and and retailers. And they have such a monopoly. There is really no free market in the live fat cattle marketplace. So when you say the four companies have a monopoly, is it a monopoly on on the slaughtering, the feed lots? Um which part of the >> when they're when they're purchasing cattle from from people that fatten the cattle on the feed lots, they have a monopoly and they basically there's no there's no price discovery, true price discovery. They basically set the price and tell them this is what you're going to get. So, if I was running my own ranch, I wouldn't be able to slaughter my own animal, pack it, and then sell it, let's say, to a local groceryer or like um like a regional grosser. It has to go through one of these companies. >> No, no. You you could if if you had if you were a lot of people are are doing something similar to that right now. But, uh beef is a commodity. You could you can't feed America doing that. Okay? There are not enough small independent feed lots scattered across America. We need a regionalization of a bunch of feed lots all over the country in order to do that. Um, so you if you wanted to do that, a lot of people do do that, but then you run into problems and headaches like finding a packer that actually has space to kill your cattle because right now we we we're a seed stock producer. We raise pure red Angus cattle. And some of our cattle that are not high enough quality to be breeding cattle, we will fatten in our own little small situation and and send them to a local packing plant, a very small privately owned local packing plant. The problem is is everybody's got this idea and this is what they're going to do and I have to schedule even though I don't know what I'm going to have a year from now, I have to schedule space at that packing plant over a year out now because of because of this crisis. Can you break down what these four companies are? Who owns them ultimately and how how did it come to be that these four companies came to preside over the entire industry here in the US? >> Well, there are four companies that that control the protein in the world. Uh you have the the American company Cargill. Um you have Tyson Foods which is a multinational owned uh I think invested highly invested by the Chinese and then you have two Brazilian companies Manfred and JBS. And JBS is the largest uh meat packing company in the world. And uh they are run actually by um the Batista family. And the two uh heads of that company spent time in jail in uh in Brazil because of uh bribery charges. And they basically have through mergers and acquisitions have become the largest and and our government has allowed those mergers and acquisitions to occur because they think bigger they thought bigger was better and more efficient. And I think the CO 19 crisis and the the the uh food chain or the supply chain issues we had with that show that it's it's not the most efficient way to do it. We need a more regional uh diverse uh food uh system. All right, just to pause here for a super quick moment. The sponsor of today's episode is an awesome small elderberry farm over in beautiful Wisconsin. Now, elderberries are a superfood. They're a great source of vitamin C, vitamin A, potassium, as well as some of the most potent sources on Earth for antioxidants, especially cressettin, which is a powerful antioxidant that helps the body get rid of free radicals that are just floating around. 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And so, again, use my promo code Roman 10, get 10% off. Check out that vital signs episode where they go into great detail about what's so good about elderberries, why they're a superfood, why they've been used for like near well over 2,000 years. Uh they go into great detail in that episode. I'll throw a link to it. You'll be able to find it down in the description box below. And yeah, thank you Wisconsin Elderberries for sponsoring the program. And now back to the show. >> Now, that clip you just watched where Dr. Miller explained what was taking place, that was from 3 years ago. And since then, things haven't gotten much better for the average rancher. I mean, fortunately, the drought conditions have alleviated, which is good. But at the same time, Walmart moved in and took a big chunk out of the beef processing industry, opening up a new facility in Kansas in order to essentially vertically integrate themselves and process most of their own Angus beef for the Midwest. Here is how Walmart's vice president for food framed this new move. quote, "This is the first case ready facility fully owned and operated by Walmart, and that milestone ensures we're able to bring more consistency, more transparency, and more value to our customers. We're delivering more of what our customers want, affordable food, and quality they can trust, which is at least partly definitely true. By vertically integrating the processing, the distribution, and the sales of the beef, they will likely drive the cost down for the consumer. On the flip side, however, ranchers as a whole appear to be nervous about this further consolidation. In fact, in an article that's titled, "The big four just became five." Here's how beefnews.org, which is a pro- rancher trade publication, here's how they describe the situation from a rancher's perspective. Quote, Walmart has spent over $660 million building its own beef empire from processor to packaging plant to retail shelf. That makes them more than just a grosser. It makes them the fifth major packer, joining Tyson, JBS, Cargill, and National Beef. The press calls it resilience, but ranchers know what it really is. Vertical consolidation dressed in feel-good PR. They then go on to write about how this move, it basically consolidated the little bid that was remaining of the open beef market. Quote, "The $700 million vertical integration move, framed as resilience and investment in US beef, just claimed what little was left of the open market. Walmart now owns a piece of the processor, Sustainable Beef, owns the packaging plant, Olethi, and controls the retail outlet, Walmart Stores. That's vertical integration top to bottom. And the problem for the rancher in this, they say, is that with vertical integration, Walmart now holds all the cards. Quote, Walmart decides what cattle are worth. Walmart decides how it's cut and wrapped, and Walmart decides what consumers pay. meaning that a small ranching operation now likely has even less leverage when dealing with their local beef processor. And this obviously is having realworld implications. Here's for instance Senator Josh Holly of Missouri speaking during a recent congressional hearing on the topic of antitrust. And he brings up exactly this point, how monopolies in the beef processing industry have hurt his local constituency. >> We need to enforce antitrust laws evenly across the entire economy. >> Good. Let me just give you one one example here. Four companies currently control over 80% of beef processing in this country and very similarly high shares of poultry and pork. In Missouri, just in the last year, we have had two poultry plants closed by the dominant uh poultry processor, Tyson Food, uh cancelling contracts with farmers, putting hundreds of people out of work across my state, really acting with total impunity. Why? Because they can because they they are essentially a monopolist. Is this the kind of thing that the FTC can take action on? >> Uh yes, with the the small caveat that uh the Department of Justice typically handles the packers, but the FTC sees sees this at the retail level as well. Uh when there are a smaller number of packers, retailers pay higher prices and then consumers pay higher prices. And then retailers want to merge and consolidate their own part of the supply chain to counteract that. And then it's sort of an arms race to see who can get the biggest the fastest. >> I'll end with this. Right now, beef processing is just one example, but it's a perfect example for a state like mine. The only people who win are the monopouists. You know, if you're a cattle rancher, you're not getting paid for your product. If you are a consumer at the grocery store, you're paying an arm and a leg for some hamburger. And yet, so the consumers are paying more, the the farmers are getting paid less. Who who is really making out like a bandit here? It's the monopouists. It's the four people, the four companies that control 80% of beef processing. That is not competition. We need more competition in this country economywide. >> And indeed, even though Senator Josh Holly in that clip was speaking about his local constituency, Missouri is not alone. The smaller beef processors, the ones who've been competing for that little remaining slice of the pie, that 20% of the market that's still open, they've essentially been going out of business left and right. Quote, "According to USDA's Packers and Stockyards report, the number of federally inspected beef slaughter plants declined from 297 in 2013 to 271 by 2022. And that's just a headline. Nationwide, over half of small and midsize beef processors, those handling 5 to 500 head per week, disappeared between 2000 and 2020 based on an analysis from Rocky Mountain Farmers Union. Then CO hit. According to NEOSH, which is the National Institute for Occupational Safety and Health, as well as CDC data, more than 480 meat and poultry facilities across the country reported CO outbreaks. Many of the small ones already fragile never reopened. Nationwide, small and midsize beef processors have declined sharply over the past two decades, with many regions, including the high plains, now facing limited slaughter access and monthsl long backlogs. And so, there you have it. That's what's happening behind the scenes with massive consolidation in the beef processing industry while at the same time on the front end you and I are paying record prices for beef assuming at the very least that the ranchers and farmers are getting a cut of that extra money which in in theory they are but their profit margins still remain the same or perhaps are even getting smaller. And so it's like it's a pretty bad situation to be an American rancher right now. There's a a ton of regulatory red tape that they're dealing with and on top of that they have this monopoly and so it's a tough situation for the American rancher trying to make a living out there. If you'd like to go deeper into this story, I will throw my research notes down into the description box below, including the USDA reports, some information regarding this massive consolidation in the beef industry, as well as Walmart is up to. If you want to go deeper into any of that, the links will be down there in the description box below. And then also, I'd love to know your thoughts. Do you think what Walmart is doing is a good idea? I mean, it's sort of the quintessential American thing to do, I guess, if you know, if you if you think about it that way, vertical integration. And in theory, they will drive the price lower for you and you and I, the people who actually go to Walmart to shop. But then, will that ultimately hurt the local rancher who now has even less competition when it comes to choosing which beef processing plant to use? Right? Walmart is such a big player that I mean they hold all the cards when when it's when it comes time to negotiating on beef prices. And so will it be even harder to make a living in this industry? I'd love to know your thoughts. Yeah, especially if you work in a ranch, if you own a ranch, for sure, leave your comments down there. If I missed anything, if I misrepresented anything, please leave it down there. I'd love to know. And also, as you're leaving your comments, do smash that like and that like button as well as that subscribe button so this video can reach ever more people. That's so you can also be subscribed to this channel. Whenever we put out new episodes, you'll be informed. And then until next time, I'm your host Roman from the Epic Times. Stay informed. Most importantly, stay free.