Beef, Pork, Chicken Prices to INCREASE Significantly

Posted by Warm Southern Breeze on Sunday, May 3, 2020

Concentrated American Business Operations Spell Economic Disaster

We apparently either forgot, or didn’t learn our lessons in the events which led up to the Great Depression.

https://www.bloomberg.com/opinion/articles/2020-04-30/the-coronavirus-won-t-bring-the-end-of-big-meat-processing-plants

Colloquially, through our nation’s Federal laws governing business practice and ownership, etc., we’ve “put all our eggs in one basket.” As a result, when one factory or industry hiccups or sneezes, the entire system gets sick. The same principle is true for many other businesses and aspects of our economy.

You’ve probably read my expressions on a topic very much like this before.

“The concentration of America’s meat packing industry is ultimately a symptom of its weakness, rather than its strength.”

Despite being the world’s second-largest meat consumer after China, the U.S. slaughters almost all of its annual production of meat in just 835 facilities.

Five decades ago (in most American’s lifetimes) there were OVER 10 times as many such facilities. Anecdotally, an Epidemiologist friend share that, “Growing up in the 50’s there were dairy farms all over the South. There are very few now.”

That’s:
🐖130 million pigs
🐄33.6 million cows
🐑2.3 million sheep

If anything, those figures significantly understate how extremely concentrated the slaughter industry is.

In fact, about 66% of America’s pork is processed through 24 giant facilities owned by just 4 companies:
1.) Smithfield Foods Inc.; 2.) JBS SA; 3.) Tyson Foods Inc., and; 4.) Clemens Family Corp.

Over 80% of beef comes from just 12 abattoirs owned by 4 companies:
1.) Tyson; 2.) JBS SA; 3.) Cargill Inc., and; 4.) Marfrig Global Foods SA.

And of the two groups of meat processors which represent 50% of the meat categories consumed in America, pork and beef, 2 companies – Tyson, and JBS SA – own or control a significant portion of that market, 25%, based upon the number of competitors in the 2 categories, pork and beef.

Tyson, which is headquartered in Arkansas, is American-owned, unlike Smithfield which is headquartered in Virginia, and owned by Chinese interests. However, a full 66% of Tyson’s operations are overseas, and the company boasts that they control 20% of the entire American market share of meat by writing that “1 in 5 pounds of chicken, beef, & pork in the U.S. is produced by Tyson Foods.”

Chicken farmers are modern-day sharecroppers, and Tyson acknowledges as much by writing that, “We supply the birds and feed, and provide technical advice, while the poultry farmer provides the labor, housing and utilities.”

The North American Meat Institute (NAMI), a Washington, D.C. based lobbying organization for the major players in the corporate-owned industrialized meat industry – NOT mom & pop-owned Family Farms, which are increasingly rare – writes this on their website about the meat industry in America:

“The U.S. meat industry directly employs nearly 800,000 people: 488,500 in meat packing, 118,600 in meat processing, and 223,200 in poultry processing. The industry is responsible for generating nearly two million additional jobs for the people who produce equipment and ingredients used in meat and poultry processing, transportation, and retail and foodservice sales.

“On an annual basis, meat packers transform 32.95 million head of cattle, 772,000 calves, 113.16 million hogs and 2.185 million sheep and lamb into beef, pork, lamb and veal. Meanwhile, poultry processors transform 8.6 billion chickens and 250 million turkeys into chicken and turkey products.

“Annually, sales total $133 billion in meat packing and processing and $52 billion in poultry slaughter and processing.”

A NAMI-poduced PDF document entitled “The Amazing Meat & Poultry Supply; A snapshot.” last modified January 2, 2014 at 4:33:22 PM CST states this:

“Our herds and flocks include… 91 million head of cattle; 66 million pigs; 5.3 million sheep; 9 billion chickens and 242 million turkeys.

“In 2011, the U.S. produced 26 billion pounds of beef; 22 billion pounds of pork; 148 million pounds of lamb; 37 billion pounds of chicken and 5.8 billion pounds of turkey.

“According to USDA, U.S. beef exports totaled 1,133,947 metric tons in 2012, while U.S. pork exports totaled 2,262,125 metric tons.”

NAMI boasts of a “Fact to consider” in that same document, and states: “All unique products are identified by a Stock Keeping Unit known as a “SKU.” According to the National Retail Meat Case Study, there are at least 21,000 SKUs in the retail meat and poultry case. That means a consumer could enjoy a different product every day for nearly their entire lives with no repeat.”

What they do NOT tell you, is that it ALL comes from the same 4 major companies.

Industrialized corporate farms are now the norm, rather than the exception.

Simply put, it’s International profiteering on the backs of hard-working American Farmers who do NOT share in that profit.

And NAMI makes no bones about their intentions when they wrote:

“While feeding our citizens is our first priority, U.S. meat and poultry companies also play a major role in feeding people around the world through exports. These efforts benefit people in other nations, but also benefit our economy.

“Demand for U.S. meat and poultry products is strong.

“According to the United Nations Food and Agriculture Organization, by 2050, food production must increase by about 70 percent—34 percent and that is higher than it is today—to feed the anticipated nine billion people.8 This projected population increase is expected to involve an additional annual consumption of nearly one billion metric tons of cereals for food and feed and 200 million metric tons of meat.”

It’s not just China where things need to change.

We DESPERATELY need change in the good ol’ USA!

Yet understand this also:

When the concentration increases, the distribution decreases proportionally.

In other words,
small businesses went extinct,
and the money from them went to
GIANT CORPORATIONS and their Wall $treet overlords,
instead of to families and communities.

On a Smithfield Foods website page, they state “The company was founded in Smithfield, Virginia, in 1936 and was acquired by Hong Kong-based WH Group in 2013.”

That page also has responses to questions, such as:

Who decided to sell the company to WH Group?

In 2013, Smithfield’s shareholders voted overwhelmingly to approve the strategic combination with WH Group. More than 96 percent of the votes cast by investors were in favor of the transaction.

Is WH Group owned by the Chinese government?

WH Group is a publicly traded company with shareholders around the world. Anyone anywhere can purchase shares of WH Group on the Hong Kong Stock Exchange under the stock code 00288. In fact, WH Group’s shareholders include many large U.S.-based financial institutions. It is not a Chinese state-owned enterprise and does not undertake commercial activities on behalf of the Chinese government.

The link above goes to this 2013 announcement.

Smithfield Foods Shareholders Approve Strategic Combination With Shuanghui International

SMITHFIELD, Va., Sept. 24, 2013 (GLOBE NEWSWIRE) — Smithfield Foods, Inc. (NYSE:SFD) announced today that the shareholders of the company voted overwhelmingly to approve the proposed strategic combination with Shuanghui International Holdings Limited.

At a Special Meeting of Smithfield shareholders held today, more than 96% of the votes cast were voted in favor of the transaction, which represents approximately 76% of Smithfield’s total outstanding shares of common stock as of the record date for the Special Meeting.
…

About Smithfield Foods

Smithfield Foods is a $13 billion global food company and the world’s largest pork processor and hog producer. In the United States, the company is also the leader in numerous packaged meats categories with popular brands including Smithfield®, Eckrich®, Farmland®, Armour®, Cook’s®, Gwaltney®, John Morrell®, Kretschmar®, Curly’s®, Carando®, Margherita®, and Healthy Ones®. Smithfield Foods is committed to providing good food in a responsible way and maintains robust animal care, community involvement, employee safety, environmental, and food safety and quality programs. For more information, visit SmithfieldFoods.com and http://www.SmithfieldCommitments.com.[dead link]

About Shuanghui International Holdings Limited

Shuanghui International Holdings Limited is a Hong Kong-based privately held company that owns a variety of businesses that include food and logistics. Shuanghui International and its subsidiaries are the majority shareholders of China’s largest meat processor, Henan Shuanghui Investment & Development Co. Ltd., which is publicly listed on the Shenzhen Stock Exchange under the ticker symbol 000895. More information about Shuanghui International is available at http://www.Shuanghui-International.com. [redirects to this address: http://www.wh-group.com/c/index.php]

Smithfield Foods To Be Sold To Chinese Firm For $4.72 Billion

May 29, 2013, 9:27 AM ET

The makers of Smithfield Ham, an icon on America’s culinary scene for decades, are selling the publicly traded company to China’s Shuanghui International Holdings Limited for about $4.72 billion in cash. The deal also includes an exchange of debt.

The purchase values Smithfield Foods at $7.1 billion — a figure that would make the purchase “the largest Chinese takeover of a U.S. company,” according to Bloomberg News.

In addition to Smithfield, the company’s brands include Armour, Eckrich, Gwaltney, Kretschmar, and others. The company’s roots stretch back to 1936, when the Luter family opened a packing plant in Virginia.

Terms of the purchase value Smithfield’s stock at $34 a share — a premium of more than 30 percent over the company’s closing share price yesterday. The Wall Street Journal, which first reported the sale, says the company’s shares rose sharply before the markets opened Wednesday.

The deal will require approval from U.S. regulators before it is final.
…

To be certain, Hong Kong ~IS~ part of China. It’s as much a part of China, just as Puerto Rico is a part of the United States.

So, absolutely, YES! Smithfield is a Chinese-owned business. Do NOT be fooled, or misled.

Here’s a news item from Reuter’s today about Smithfield.

USDA terminates Chinese-owned Smithfield farm aid contract

by Humeyra Pamuk
Friday, May 1, 2020

WASHINGTON (Reuters) – The U.S. Department of Agriculture terminated a $240,000 purchase contract with Chinese-owned Smithfield Foods that had been awarded under the Trump administration’s agricultural trade bailout program, a move taken at the company’s request, a department spokesman told Reuters on Friday.

The move comes weeks after Republican Senator Chuck Grassley of Iowa, one of the country’s biggest farm states and the biggest hog-producing state, slammed Smithfield for receiving what he said was aid from the USDA that was meant to help American farmers hurt by China’s trade tariffs.

“Smithfield requested to terminate their contract awarded under the Food Purchase and Distribution Program. USDA has agreed to the termination,” Tim Murtaugh, a spokesman for the USDA, told Reuters.

Here’s a healthcare example of the problems surrounding the concentration of businesses in the United States:

In 2007, the FTC (Federal Trade Commission), and the DOJ (Department of Justice) issued a report which found that states’ Certificate Of Need laws were inherently anti-competitive. CON laws, as you may recall, were enacted by 49 states (LA was the sole holdout) in response to legislation enacted by Congress, the ostensible purpose of which was to lower rapidly rising healthcare costs.

As I analogize it, CON laws place healers at odds with each other, turning them into mortal enemies and legal combatants, rather than compassionate healers, by requiring one to oppose the other’s request for services expansion to meet the public need for healthcare services, and further wastes precious resources (money) which should and ought to be going to patient care, and instead lavishes it upon attorneys and the legal process.

Analogously again, it’s like a grocer being forced to go before an administrative law judge to beg, “Please, your honor, may I build a grocery store to feed these hungry people?” The opponents to the plan would be the prospective grocer’s competitors.

Once Congress received a governmental report that the law did not accomplish that which it was set forth to do (lower rapidly rising healthcare costs), they repealed it. And, as they are wont (accustomed) to do, held out the proverbial carrot on the end of a stick (Federal dollar$) if they enacted a CON law. Thus, when Congress abandoned the law, states were then free to do likewise. Most which had enacted some form of CON law, either severely modified it, or eliminated it. Alabama was one that did not.

See the following for additional information:

July 23, 2004 – https://www.ftc.gov/reports/improving-health-care-dose-competition-report-federal-trade-commission-department-justice

February 23, 2007 – https://www.justice.gov/atr/competition-healthcare-and-certificates-need

March 25, 2008 – https://www.justice.gov/atr/comments-competition-healthcare-and-certificates-need

September 12, 2008 – https://www.ftc.gov/news-events/press-releases/2008/09/federal-trade-commission-department-justice-issue-joint-statement

September 15, 2008 – https://www.justice.gov/atr/competition-health-care-and-certificates-need-joint-statement-antitrust-division-us-department

2015 – https://www.ama-assn.org/sites/ama-assn.org/files/corp/media-browser/public/arc/con-evidence-for-repeal.pdf

February 23, 2016 – https://www.jdsupra.com/legalnews/ftc-and-doj-take-aim-at-state-50457/

April 12, 2017 – https://www.ftc.gov/policy/advocacy/advocacy-filings/2017/04/joint-statement-federal-trade-commission-antitrust-division

April 12, 2017 – https://www.justice.gov/opa/pr/department-justice-and-federal-trade-commission-support-reform-alaska-laws-limit-competition

April 28, 2017 – http://health.wolterskluwerlb.com/2017/04/highlight-on-alaska-ftc-doj-back-alaska-senates-move-to-eliminate-certificates-of-need/

May 24, 2018 – https://www.bradley.com/insights/publications/2018/05/doj-reaffirms-role-in-healthcare-antitrust-enforcement