Jon AngellFrom the Publisher ... Jon Angell

Experts wield a lot of influence in the chaos we live in today. I am disappointed and suspicious of many of our experts. So much so, I scrapped my original column to devote a little space to my thoughts surrounding cattle, beef, experts and chaotic complexity we face currently. I think we are at a key inflection point.

Heck, I expect anytime to hear a Rod Sterling voice over, “There is a fifth dimension beyond that known to man, it is a dimension as vast as space and as timeless as infinity, it is the middle ground between light and shadow, between science and superstition, and it lies between the pit of man’s fears and the summit of his knowledge. This is the dimension of imagination.” This chaos reminds me of the television serious I watched as a child … “THE TWILIGHT ZONE.”

Yes it seems as if we have entered “The Twilight Zone” as I watch the news and examine the various issues of our times. The world seems to in constant upheaval with unexpected twists around every corner. Contradictions and hypocrisy have seemingly become normal and standard practices in not only our debates, but often in policy.
I will put a lot of this to the velocity of change and complexity. There just seems to be too many moving parts to grasp. I don’t see that changing. Much of what I think I see; I don’t like. What is worse I’m not sure how to effectively stir things and affect the outcome. Yet we can still try.

I know that last week a “twitter campaign” directed @realDonaldTrump rallying around the idea of #FairCattleMarkets trying to gather attention to what is going on in the cattle and beef industry. I’m not much for Twitter, but I did activate an account and tried my best to make a ruckus. It couldn’t have happened at worse time, because too much attention was being directed at other news. It was a bad break, but a nice effort.

Until the consumer (soccer moms and others) realizes they are being systematically ripped off, and raise a ruckus ... I don't think we can expect any help. Without the acknowledgement and support of the consumer, I don’t think we see much help.

Politicians and consumers are nearly always okay with monopoly (oligarchy more accurate) and anti-competitive markets, as long as it results in cheaper or improved benefit to the end user... they don't care that the squeeze is put on producers and suppliers UP UNTIL the benefit to them goes away. Nearly always when oligarchies rise to the top of a capitalistic system, they eventually start sticking it to the consumer. The fire in the Kansas packing plant and the packers generally in my mind marked a significant potential tipping point.

I think today, oligarchies and cartels are far more prevalent than many realize. Think of so many utility companies, software/tech companies, some pharmacitical/heathcare companies and it isn’t hard to see a handful of dominate actors that set the pace and price.

Currently many of us are fighting against what we see as the chickenization of the cattle industry by the four major national packers that set the price most and process 80 percent of our nation’s fed cattle. It’s hard to accept willingly the way things have evolved.

Over the years, many Anti-trust laws have been established to guide markets, but are geared to consumer protection in reality and offer little protection to the producers/suppliers and other market participants. Correct me if I'm wrong... but the last time at the turn of the previous century the packers were "broken apart" due to their abusive greed was after a popular uprising and the awareness to the average consumer with such popular culture exposure such Upton Sinclair's bestselling novel "The Jungle" that exposed the packing industries greed and abuses.... This historical context is part of the reason I believe the consumer is necessary for any significant change from our current course.
According to Steiner in the Daily Livestock Report on Sept. 20; Total cattle slaughter in August was 1.7 percent lower than last year, but when adjusted for difference in marketing days cattle slaughter was actually 2.7 percent HIGHER. The fire at the Finney County, KS Tyson plant did not disrupt the cattle slaughter in the big picture as other plants readily picked up the slack and more. Another interesting fact in this report is that heifer slaughter has been 7.1 percent higher than last year.
The cattle sector is contracting at a time when worldwide and domestic demand seems very strong. This doesn’t square with my understanding of supply and demand along the side of efficient and fair markets.

The best example I have heard is to think of our industry in the shape of an hourglass. You have all the cow/calf cattleman and farmers at the top, back grounders, feedlots flowing down to a constriction point that is in the firm grip of the packing industry. From there, it widens back out to meat brokers, wholesalers, retailers, and restaurants and finally to the end consumer. Currently the debate and conflict all revolves around the terms of engagement and the pricing functions at that constriction point, firmly in control by a handful. This is almost a textbook example of oligarchy.

Oligarchy definition according to Merriam-Webster: 1) government by the few; 2) a government in which a small group exercises control especially for corrupt and selfish purposes; 3) an organization under oligarchic control. I content that the packers are governing the industry in selfish manor that is no longer good for producers nor the end consumers.

Opinions on where we are and what needs to be done will vary greatly. I’m pretty sure as an industry we can’t even agree on the basic problems to be addressed. I have laid out my framework above of an hourglass and of a marketing/pricing constriction point controlled by a oligarchy that I identify as the Big 4 packers of Tyson, JBS, Cargill and National.
Let me give an example of how the opinions of “experts” are way different.

The economist Dr. Jayson Lusk of Purdue University testified on September 25, 2019 in front of the U.S. Senate Committee on Agriculture, Nutrition and Forestry. He testified regarding the Kansas packing plant fire, “Available evidence to date suggests the observed reduction in cattle prices and the increase in wholesale beef prices following the fire are not inconsistent with a model of competitive outcomes. An unexpected reduction in processing capacity reduces demand for cattle, thereby depressing cattle prices. The need to bring in additional labor to increase Saturday processing and temporarily repurposing cow plants for steers and heifers involves additional costs that pushed up the price of wholesale beef. These price dynamics are not surprising and are generally what would be expected from the fundamental workings of supply and demand.”

He testified and alluded to many conclusions on other things of substance, some I agreed and many I disagreed. I am disappointed and suspicious of this expert.

Another outspoken “expert” Steve Dittmer in a blog Sept 27, 2019 seemed to be whole on board with the current iteration of cattle marketing. In part he said “We posit such growth in quality and volume would never have been possible if the whole industry was still selling carloads on the average. OCM & R-CALF’s opposition to contracting, alternative marketing and grid selling and favoring a return to selling fed cattle live at auction is the very antithesis of the success of modern quality beef. Packers providing incentives that flow all the way down the chain is what had made a much more satisfied customer for today’s beef.” He clearly believes that pricing your fed cattle after they are dead in the price makers’ plant is the way the world should work. I think I understand his vision of how things should be. I am disappointed and suspicious of this expert.

As I endeavor to learn more about how the structure of our cattle/beef industry has evolved, I realize that I have so much to get through to grasp what is unfolding before me. I fully expect to come across many disappointments. I already have new suspicions as I review expert testimony and seek various opinions on the subject.

As I read, listen and watch, I continue to come back around to my memories of “The Twilight Zone” from my childhood. A place I never wanted to visit, but the more I look into the evolution of the cattle industry, the more I become disappointed and suspicious. It feels as if we have entered our own modern twilight zone. Memories from past episodes lead me to believe I should prepare to be totally surprised and shocked. Heads up...