The mission of OCM is to reclaim competitive markets in agriculture for farmers, ranchers and rural communities.

Presented by Mike Callicrate November 15, 2016

Effects of Market Concentration

So this is where you grew up... What happened Grandpa?

The U.S. has lost nearly half of it’s ranchers, 90% of it’s hog farmers and over 80% of it’s dairymen in the last 35 years.

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3Photograph from the book, Great Ranches of the West ©2007 Jim Keen

Every month 1,000 ranches go out of production.

4Photograph from the book, Great Ranches of the West ©2007 Jim Keen

The National Security issue no one is talking about!

Today, 1,350 lb. finished cattle are worth $3,300 per head at the retail meat counter.

Choice beef values and spreads and the all-fresh retail value

Recent high

Recent low

Choice beef values and spreads and the all-fresh retail value

This is abusive market power!

Choice beef values and spreads and the all-fresh retail value

$660 per head taken from the producer!!

While USDA reports retail beef prices 8% lower, finished cattle prices have declined 41%, and calves 50%.

*All Fresh Choice Beef – USDA-ERS Data35.0%

40.0%

45.0%

50.0%

55.0%

60.0%

65.0%

70.0%

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1950 1975

1995 1996 19971998

2002

2000

2006

1999

Farm share of the consumer retail beef dollarPicture of market manipulation

2012

2009

2013

2014

2015

Fed cattle dropped 41% from $170/cwt. to $100/cwt. Consumer beef prices have remained basically unchanged.

The last time the finished cattle market was competitive. Four-firm concentration was around 35%. Today it’s 85%

Updated by Mike Callicrate Jan 2016

2016

The Boston Consulting Group advised IBP to cooperate with other big packers rather than compete.

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The U.S. is now a net food importer on a value basis.

Beef – Brazilian owned Pork – Chinese owned Poultry – Brazilian owned

The largest firms in beef, pork, and poultry are foreign owned:

“You should be suing Walmart [Instead of IBP], they are the problem. They tell us what they will pay and we have no choice but to pay you less.” - John Tyson 2002

The big packers are driving the getaway car.

Partners in CrimeThe big retailers are robbing the bank.

Average return on equity before tax (ROE)

Retail grocery: ROE = 21% (last 6 years)

Meat packing: ROE = 17% (last 6 years)

All Farming & ranching: ROE = NEGATIVE 0.54% (last 13 years)

Packers--for those with sales > $500k - Before tax ROE, 2002-2009: 17.38% - source: http://www.bizminer.com/industries/Meat-packing-plants-2011/

Retail grocery--food marketing institute book - http://www.fmi.org - 2003-2009 average: before tax ROE = 20.75%

Cattle--for the farm typology "cattle" meaning primarily cattle operations in USDA/ERS annual surveys - http://www.ers.usda.gov/Briefing/ARMS/

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There’s an economic term to describe this phenomenon. It’s called…

STEALING - John W. Helmuth, Ph.D, Ag Economist. He warned early of the dangers of concentrated market power by packers and agribusiness. He died in November of 1999.

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"These guys are nothing but old-time gangsters, thugs and thieves. They beat your brains in with their market power and take your money." Statement of Mike Callicrate on opening day of 2004 Tyson/IBP trial

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“…there is no stopping it(concentration). This is an evolution that’s going to takeplace in spite of whoeveris in the way.”

Robert Peterson, IBP Chairman and CEO, July 1996$20 Billion by 2001 article, in Meat and Poultry

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Emptiness: A picture of big meat packer retaliation – Why cattle feeders won’t speak out against meat packer abuses…

Callicrate Cattle Co., 1999"What we support prospers, what we feed grows." - MikeCallicrate.com

Callicrate feed yard closed in 1999 when the meat packers refused to buy the cattle.

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When we lose our markets, we lose our freedom!

“There once was a time in history when the limitation of governmental power meant increasing liberty for the people. In the present day the limitation of governmental power, or governmental action, means the enslavement of the people by the great corporations. “

Theodore Roosevelt 1913