As Beef Prices Stay Low, Small Ranchers Cry Foul For decades, U.S. cattle prices were set in the open market. But now, cattle are often produced under contract to buyers, for prices largely negotiated in advance. Small ranchers say they regularly get less than what larger producers can negotiate.
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As Beef Prices Stay Low, Small Ranchers Cry Foul

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As Beef Prices Stay Low, Small Ranchers Cry Foul

As Beef Prices Stay Low, Small Ranchers Cry Foul

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STEVE INSKEEP, Host:

Frank Morris has more from member station KCUR in Kansas City.

FRANK MORRIS: I'm standing beside a big grassy lot, just outside downtown Kansas City. Ninety year ago, I'd likely be ankle deep in cow poop here, because this was one of the world's largest stockyards.

BILL BULLARD: Decades ago, stockyards like this were the gathering point of cattle that were ready for slaughter.

MORRIS: Bill Bullard runs R-CALF USA, a cattle producers' trade organization. He's out here too in his big white hat.

BULLARD: And the packers would send their buyers here to bid aggressively to get all the cattles that they needed.

MORRIS: But the packing houses manipulated prices to the extent that Congress passed the Packers and Stock Yards Act of 1921. Bullard can quote it line and verse.

BULLARD: Packers are prohibited from engaging in any unfair, unjustly discriminatory or deceptive practice. That portion of the act has never been implemented.

MORRIS: And Bullard says that lax oversight is putting ranchers like Randy Stevenson out of business. Stevenson used to sell his cattle at a local auction market in eastern Wyoming, but no more.

RANDY STEVENSON: The bids became take it or leave it. It wasn't a bid. It was a price.

MORRIS: The beef industry is now dominated by four huge packing companies. They buy most of their animals through confidential contracts. Stevenson says those agreements tend to favor high-volume producers and punish guys like him.

STEVENSON: It and other things have been devastating. I filed for bankruptcy this year.

MORRIS: More than half a million cattle operations have gone under in the last three decades. And Mississippi cattleman Fred Stokes has a word for what's happening.

FRED STOKES: We call it chickenization.

MORRIS: Mike Weaver heads Contract Poultry Growers of the Virginias, and says survivors barely hang on.

MIKE WEAVER: It's like us being slaves to the corporations. They keep us in debt so that we have to keep raising our chicken. It's kind of like the old company store mentality. As long as they keep us in debt, we have to keep digging their coal.

MORRIS: The USDA wants force packers to justify any preferential pricing they give one rancher over another. But some farmers who've flourished working closely with packers say they're not interested in a big government solution.

DOUG WOLF: This is a disastrous bureaucratic overreach that's bad for farmers and ranchers, bad for consumers, and bad for rural America.

MORRIS: Kansas mega-rancher Bill Haw says changing the rules to prop up less efficient producers is sentimentality run amok.

BILL HAW: There is what I call the Little House on the Prairie Syndrome. Somehow we're all obliged to subsidize and provide favorable conditions for the smallest of producers in agriculture.

MORRIS: Bill Donald, president-elect of the National Cattleman's Beef Association, says the rule changes are too vague to make an exact damage estimate, but he thinks they do harm.

BILL DONALD: Because I think it's going to disrupt the cattle markets to the point that there'll be a lot of producers that end up going broke.

MORRIS: So ranchers on both sides of the debate over the proposed Packers and Stockyards Act changes predict more pain in the industry if things don't go their way. Could be they're both right. When asked about it at a press conference in Kansas City yesterday, U.S. Agricultural Secretary Tom Vilsack cited grim statistics: Nine out of 10 hog farmers operating in 1980 are gone.

TOM VILSACK: Everybody satisfied with those trends? Everybody think that's a good idea?

MORRIS: Question is: Is it the market or is it something else?

VILSACK: That's a good question. And how do you ask that question? You propose rules, and then you get comments, and you have a conversation about it.

MORRIS: For NPR News, I'm Frank Morris in Kansas City.

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