The American meat packing industry is a monopoly built from regulation, not free market economics. As you might have read before, “Four companies slaughtered about 85% of U.S. grain-fattened cattle that are made into steaks, beef roasts and other cuts of meat for consumers in 2018.” This level of concentration (four companies) is not a mistake. It was deliberately created by lobbyists and politicians to line the pockets of large companies while hampering competition from smaller meat packers.
As Joel Salatin states in the below YouTube video, “It’s not that there aren’t farmers like me that want to do this. It’s not there aren’t eaters who want to eat it. It’s not that the economies aren’t there. It’s not that we don’t know how to do this. It’s not that we need more infrastructure development to figure out how to do this. It’s that these very arbitrary and capricious regulations that were designed to keep industrial short cutters and opaque food systems in check, that don’t then scale down and apply in a local, transparent neighborhood friendly kind of operation.”
The steps for a small, local meat processor to turn their livestock into commercial-grade meat has become a boondoggle.
Kate Miller outlines the need for more small plants in this post, however, she also outlines the many obstacles presented for a new plant owner. Not only do owners need to understand the regulations, audits, insurance, and testing required to sell USDA-certified meats but they also need to have a sales pipeline sufficient enough once they get through all of those hurdles. She says “The reality is that a small plant asks ownership to be skilled traders of two inherently different commodities while being technically skilled operations managers. Does this sound reasonable to you? It doesn’t to me. It sounds like a lot of sleepless nights and heartburn.”
The Biden Administration has attempted to alleviate this situation by providing small meat processors with $1 billion in federal grants available. Although this sounds like a large investment into improving small farmer operations, the industry does not fully agree. As pointed out in the linked Missouri Independent article, Greg Gunthorp says “It’s a complex problem to solve, I don’t know that they delved into it hard enough.” Indeed, it is a complex problem created by regulation. “They’ve exceeded any efficiencies associated with economies of scale and are now engaged in controlling the marketplace” said Bill Bullard, CEO of R-CALF USA, which advocates for independent cattle producers.
What Regulations Created This Mess?
Some research delving into the history of meat processing regulation in benefit of large meat processors.