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Uncovering The Dark Underbelly of the American Beef Industry

Uncovering The Dark Underbelly of the American Beef Industry

Four companies control 85% of the beef you see at the grocery store. Here is what this means for your health.

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Happy Tuesday, Carnivore Bar Family!

I am currently 2 Honey Bars deep, so bear with me. After recording an eye-popping podcast with Jim Mundorf, I had to get some thoughts down on paper.

Jim is the Iowa-based rancher behind Lonesome Lands, which focuses on giving consumers an unbiased take on ranching, beef, and the war against animal protein. We had a great conversation with Jim, and we can't wait to share the episode with you.

I cannot stop thinking about his insight into the Big Four Packers that control the American beef industry. There is so much to dig into concerning the centralization of our beef supply.

What's fascinating about our food system is how we normalize things completely unnatural.

Normal and completely unnatural.

It's normal to feed kids fake foods from packages, and to eat heavily processed and chemically treated fake seed oils. It's normal to subsidize farmers to grow massive amounts of corn, wheat, and soy. We're to the point in our culture where being metabolically unhealthy (even obese) is being celebrated. The centralization of the beef industry is just one more abomination we've come to accept as "normal." 

Many in the political realm have sought to highlight the monopolization of Big Tech. We seen a concerted effort to break up tech giants like Google and Facebook, but who is paying attention to the food 200+ million Americans eat on a daily basis?

Four primary beef packers control 85% of beef in American grocery stores. They are:

  • Cargill
  • JBS
  • Tyson
  • National Beef

Over the last few decades, these four packers have quietly centralized our beef supply through a lot of M&A activity. Gone are the days of hyper-localization or knowing the processor that is butchering your meat. Instead, we are at the mercy of a few publicly traded companies that are obligated to shareholders to pursue as much profit as possible.

To give you some further context, here is the breakdown of our current beef supply chain in the US:

  • 2.04 Million Ranchers (Where cow is raised)
  • 27,000 feedlots (Where the cow is fattened up)
  • 5,559 Meat, Beef & Poultry Processing (Where cow is slaughtered)
  • 355 Million Consumers (You, who is eating the Beef)

There is a discrepancy between the number of ranchers who raise beef and the processing centers that butcher the animals. This is what we call a clearly-defined bottleneck. Within those 5,559 processors, the Big 4 rule the roost. They process so many animals and have such a strong foothold that they can break the back of the rancher and overcharge you as the consumer. It is truly a "lose-lose" supply chain.

Have you noticed how the price of steak at the grocery store continues to increase?

Since 1985, the cost of ground beef has increased by over 40%. At the same time, the cost of beef cattle has decreased by 50%. This means that you (the consumer) are overcharged, and your rancher is getting price-gouged by the packers.

The packer makes insane profits per head of cattle. The Big 4's margin on a choice steer is $1,000–1,300 per head of cattle. They process 500 - 600,000 cattle per week, which gives them a gross margin of $2.6 billion per month. Billion. Yes, with a B.

This occurs when there is a high degree of centralization over the food you consume. I can promise you that these companies do not care about your health or the health of the animal you are consuming.

These Big Four packers will profit $13 billion in 2021. Meanwhile, the rancher raising the cow makes $100 per cow on average. ($250 per cow is considered very good). Contrast this to the Packers, who earn $1,000—$13,000 per cow.

To take it a step further, In 2016, the Country of Origin Labeling Act (COOL) was repealed. COOL required retailers to disclose where their food comes from. For example, if the beef in your Whole Foods was raised in Brazil but slaughtered in the US, it must disclose that. The repeal of this act allows packers to import cheap foreign beef carcasses and label them as products of the USA.

I can promise you that these packers care about providing your family with something other than pure animal protein, as your local rancher does. Take a look at some of their investments and portfolio companies, and you will see what I mean:

JBS, Tyson, Cargill, and Smithfield are heavily leveraged in the "fake meat" space. Yes, the same companies that provide you with animal protein are profiting off fake-meat alternatives that leverage monocrop agriculture and bioengineered foods and are fundamentally going against the laws of nature.

Incentives drive behavior

Please keep this blog post in mind the next time you secure meat at the grocery store. The cost is not just the $6 you pay for ground beef at the grocery store vs. the $9 beef from your local farmer.

The actual cost is the corruption, greed, and manipulation to get you that $6 beef. The price supports a hyper-centralized beef supply chain that does not care about the treatment of the animal you are eating or about you as the consumer. If they did, they would not invest in the fake meat space.

Every time you secure beef for your family, you can incentivize the future you want. You have more power than you even know. When you continue to buy your beef from the grocery store, you allow these companies to continue operating in the same malicious way they always have.

Step out of your comfort zone and make a change for your family and rancher.

Utilize websites like Eat Wild to connect with your local farmer. Go out there and shake their hand.

Ask them how they raise their beef. Then only give your hard-earned money to the farmers that provide the most ethically and most nutrient-dense beef. Use your dollars to vote for a better system and over time we will get a better system.


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