What is in this article?:
- USDA/DOJ workshops conclude.
- Antitrust concerns for DOJ.
- Panelists explain what needs to be done to ensure a vigorous agri-marketplace in 10 years.
A series of joint workshops between the USDA and Department of Justice concluded on Wednesday with an exploration of farming/agribusiness trends. A driving concern for the workshops was the role of farm-industry consolidation and the potential for antitrust legal action.
Along those lines, many of the speakers called for proposed changes to GIPSA (Grain Inspection, Packers and Stockyards Administration) in order to bring pricing fairness and greater transparency to markets.
During the morning session, a diverse set of panelists, representing each link of the food supply chain, told Agriculture Secretary Tom Vilsack and Attorney General Eric Holder what needs to be done to ensure a vigorous, profitable marketplace.
To set the stage, Vilsack provided sobering statistics – “warning signs” - to illustrate the need for reform and justify the Obama administration’s efforts to revitalize rural America. “In these workshops, and in my travels across the country, a number of themes have emerged: producers want to have or maintain marketing options, they want transparency, they want access to markets, they have fewer buyers with whom to do business with, they struggle with debt and face challenges accessing capital, and last, they just want to be treated fairly and be respected.
“But most importantly, they all care about the future of agriculture and want it to succeed, which is why we have seen such overwhelming response and attendance at these workshops.”
• In the past 40 years, the United States has lost 800,000 farmers and ranchers.
• Farmers are aging. From 2002 to 2007, the average age of a farmer increased from age 55 to 57. And the number of farmers aged 75 years or older increased by 20 percent over the same period. Meanwhile, the number of operators under 25 years of age decreased by 30 percent.
• In 2009, a hog producer received 24.5 percent of the retail value of a hog — and it was over double this percentage in 1980 (50 percent). In 2009, 13.6 percent went to the packer, and 61.9 percent to the retailer.
• A cattle producer gets 42.5 percent of the retail value of a steer in 2009, which compares to 62 percent in 1980. In 2009, 8.5 percent went to the packer, and 49 percent to the retailer.
• The four largest retailers accounted for 37 percent of U.S. grocery store sales in 2009, compared to 34 percent in 2004, 28 percent in 1999, and 17 percent in 1994. “And we know that concentration can be much higher in certain regions.”
Vilsack said in 1980 “there were roughly 667,000 pork producers. Today, there are 67,000. So, 90 percent of the pork producers are out of business.
“Looking at cattle producers, there were about 1.6 million in 1980. Today, there are about 975,000.
“In the dairy sector, just go back 10 years when there were 110,000. Today, there are about 65,000.
“If you look at the people who produce the bulk of our food, it’s really about 200,000 to 300,000 farmers. There are about 2.2 million farmers – less than one percent of our population. Roughly one-tenth of 1 percent of those farmers produce 85 percent of our food.”
Another disturbing fact: 1.9 million of the 2.2 million U.S. farmers “are either losing money or, in one of the best years we’ve had in a while (where farming income is up 31 percent), farmers in the middle will make an average of about $6,400. That isn’t enough to support a family.”