The cattle industry is the largest segment of American agriculture, and beef derived from cattle is the second most consumed livestock protein in the United States. Despite its obvious importance, just three years ago consumers went to their grocery stores and for the first time they could not buy the beef they needed for their families because the beef shelves were empty.
Beef shortages in local grocery stores was unequivocal evidence that the U.S. food supply chain for beef is inadequate to meet America’s food security needs. And this informs us that the market structure responsible for delivering an abundant, safe, and affordable supply of beef to American consumers is systemically broken.
One only needs to look at the prolonged and unprecedented spread between the super-inflated prices that consumers have been paying for beef at their grocery store and the depressed prices that American cattle farmers and ranchers have been receiving for their cattle to conclude that market failure pervades the cattle and beef industries.
The ringing of the watchtower alarm reverberated over all of America three years ago. It informed decision-makers that they must substantively reform the market structure for cattle and beef if America is to achieve an uninterrupted supply of affordable beef.
So, during the past three years, what substantive reforms has Congress initiated to correct the cattle and beef markets’ broken structure?
Well, the answer is none. The cattle and beef markets continue to be as dysfunctional today as they were when your grocery shelves went bare.
Let’s identify the problem. The problem is that the U.S. cattle industry underproduces for the U.S. market – we simply don’t have enough domestic cattle to satisfy America’s appetite for beef. But if that’s true, then why are there sufficient supplies of beef sometimes but not always?
About a decade ago, the U.S. Department of Agriculture reported that about 18% of the U.S. beef supply consists of imported beef and beef from imported cattle. Today, we estimate that about 20% of our U.S. beef supply consists of imports.
What that means to food security is that the U.S. does not have enough cattle to achieve self-sufficiency in beef production. What it also means is that should another major geo-political event occur – think Ukraine – or if another supply chain-disrupting disease pandemic strikes, resulting in an inability to access foreign imports, consumers could face up to a 20% shortfall in the volume of beef needed to keep grocery shelves full. Empty beef shelves and skyrocketing prices for the beef that is available would be inevitable outcomes.
This begs the question: Why doesn’t the U.S. produce more beef to alleviate America’s significant dependency on imported beef?
Well, it’s because the current market structure, which we now know is broken, was designed to maintain a significant dependency on foreign beef. And the designers of that broken market structure are none other than the multinational beef packers and their lobbying allies that fight fiercely to maintain America’s dependency on foreign imports.
Remember, those imports are cheaper and undifferentiated, meaning the import dependency that threatens food security also means higher profits for importers as they can pass off imported beef to unsuspecting consumers as if it came from the cattle raised by America’s cattle farmers and ranchers, even though it didn’t.
And what does this mean to U.S. citizens? It means if our domestic cattle industry continues to not produce all the beef consumed in America, then the risk of future beef shortages in your grocery stores is much greater than if we did. We only need to look back three years to know that it can and did happen then and it can happen again.
So, what must be done? Congress must act. It must make substantive reforms to the structure of the U.S. cattle and beef market. It must rebalance the market to provide opportunities for domestic cattle producers to begin rebuilding their cattle herds. It must empower consumers to begin supporting the domestic beef supply chain. And it must reestablish competition as the controlling force with which to end America’s dependency on foreign beef.
And that’s where you come in. It’s up to each and every one of us to convince our respective members of Congress to stop catering to big money interests and start representing cattle producers on one end of the beef supply chain and consumers on the other.
Tell Congress to do two things and do them fast: First Congress must pass the American Beef Labeling Act so consumers can choose to support the domestic beef supply chain. Second, Congress must force the highly concentrated beef packers to begin competing for domestic cattle. These happen to be the top two items recommended by R-CALF USA in its 2023 Farm Bill Platform, which you can access at R-CALF USA’s website (here).
