Consolidation hurts ag

In reflecting on food production and our supply channels, did we learn anything after the pandemic? Did we expose new challenges? Did we create new opportunities? Is our food supply chain functioning, as we want, or did we expose the fallacies in our system? These are questions Farmers Union is asking, as they are very relevant to family farmers and ranchers.

Actually, these questions are what everyone should be asking. If the grocery shelves in the wealthiest country in the world with the best food production system in the world can be empty, if the consumer is paying too much and the farmer/rancher is losing money and the whole system between the farm and the retail outlet is making record profits, we have a problem.

So, what is causing this issue and why did it happen? I believe it starts with the lack of enforcement of our antitrust laws.

We have allowed most of the industries that supply and buy from farmers and ranchers (and deliver to consumers) to own the whole food chain – fully integrated – between the consumer and the farmer. We have allowed this concentration over time and given market power to a few companies, creating opportunities for monopolistic practices.

This concentration issue is in most industries that deal in food production from seed, fertilizer, transportation, animal processing, etc. When these systems failed, there was not the ability to be able to step up and fill the gap. Farmers and ranchers sat with excess product at the farm, keeping prices lower at the farm gate, and consumers could not find food on the shelves, causing shortages and high costs.

The fact that we have allowed many industries to consolidate to a level where they can have market manipulation impact and have influence on available supply if an unexpected event occurs, is simply a lack of thought and vision. It is why Farmers Union supports a diverse system of family farms and ranches and a diverse number of farm product suppliers and purchasers. This allows the marketing system to remain open and free.

Even after we have experienced what happens with consolidation and understanding that a just-in-time delivery system for food has serious limitations, there is a movement to allow the same companies that caused the shortages and high prices to own farmland and get into production agriculture. This step to further integrate the food supply chain will only create more challenges and be even a larger disaster if an unexpected event happens.

It is time to step up our antitrust law enforcement. The U.S. has a great food production system built by family farms and ranches. Let’s not further duplicate the errors of the past that caused the grocery store shelves to empty. And let’s not lack the vision and experiences that show us if we open the door to further concentration, we will only increase the odds of food production shortages, logistic issues with supplies and pricing challenges in the future.