"Why is beef so expensive?"
Matt Stoller asked this simple question. https://mattstoller.substack.com/p/beef-is-expensive-so-why-are-cattle. Working in Congress we hear this from constituents and our ranchers in Nebraska. For three years I have worked for a leader in Congress on agriculture issues--it's been a steep learning curve. How did a medical doctor end up guiding policy for America's farmers? Maybe its in the DNA. My family has been connected to farming and cattle for many generations. For me and my dad until now its been a hobby. My grandfather was in it big time. He studied animal nutrition and in the 1950s innovated a current formulation of poultry feed. He built a large presence with his "Egg-a-Day" brand. I can still smell the smells of grain and molasses in the feed plant.
Last year in the midst of COVID, watching as grocery store selves went empty, it seemed a good idea to stop renting my farm in the Shenandoah Valley and go into the cattle business myself. I got lucky, my "country" neighbor Clay, half my age, had the smarts and the same desire. We joined forces and a year in, we have our first two cows ready sell by the cut. We launched a website and are taking orders for nicely marbled Wagyu beef. Building this beyond an expensive hobby won't be easy. The farm is under maintained, we have no physical place for a reasonable sized herd to graze and feed, hay land is scare, input costs are skyrocketing. Those challenges we may with luck overcome, but one variable is a major obstacle. Its almost impossible to find a place to get a cow butchered and USDA inspected. Had we fed more than 2 cows this year we would have been stuck. For 2022 we have 10 slots. It's two years to get that far down the road. So what does this mean? Beef at the grocery store has never been more expensive. Farmers are squeezed by the sales price of a cow and corn and other ingredients to feed that cow have almost doubled in just over a year. The graph below starkly shows the pain.
This dynamic is driven by COVID, generous inflationary money supply, a squeezed labor pool, USDA required reduced line speeds in meat packing plants, but most of all a veritable monopoly of 4 big international meat packers. The American Prospect, explains the pressures from the "Big 4", https://prospect.org/power/big-four-meatpackers-crushing-small-ranchers/ "In Nebraska, [David] Wright described watching young farmer after young farmer squeezed out of the cattle industry and forced to drive semitrucks or work at fertilizer plants to pay off debts. He says nearby farmers were pushed to abandon their cattle and farms after being priced out by the same culprit: Big Beef."
Its unlikely a small cattle farm in Virginia will make a dent in this problem. Maybe along the way there will be lessons we will learn to remove bottlenecks that can restore fairness to the little guy. In 2021 we wrote the 2022 Appropriations bill adding a number of programs to help small meat packers and ranchers. In early 2022 we will start again in Congress to add more ideas to the mix. If you have any suggestions, we hope you well share them here.