Beefing Up Our Future: The Urgent Call for More Processing Plants in the Meat Industry

Anytime you look at beef on the shelf in the store, it’s easy to think ranchers must be getting rich off everyone, especially as the price of inflation hits us harder. But did you know that ranchers don’t even make half of the price you pay for it? When you really look at the prices and the process to get the beef from ranch to store, you may be surprised who actually makes the profit. 

In 2023, you could go to any basic store and buy ground beef for roughly $5.50/pound and a sirloin steak at roughly $11.70/pound. We sold our calves Fall of 2022* at $1.99/pound. All of it. Regardless of the beef cuts within those calves. Yes, we understand more work goes into it once it leaves our ranch, like finishing the cattle at feedlots and transportation to get to the stores, but the price we earn is still disproportionate.

One of the biggest problems the beef industry has is corporate packing plants. These big name plants have monopolized almost the entire industry, meaning they control almost all the beef processing and the pricing around the country, if not the globe. Any business will try to find the cheapest supply chain, then turn around and sell it at a price you can pay off all the costs of getting that product to the consumer, and also make a small profit. Given the demand is high, the less competition you have, the more product you can move. Naturally, the supply and demand will lift or lower your prices depending on how much of the product is available to the market. 

However, when a company comes in and starts to control all or most of the supply chain, prices sky rocket. It allows the company to set prices without the constraints of competitive forces, potentially leading to higher costs for consumers. And that’s exactly what’s happened with companies like Tyson, JBS, and Cargill and National Packing Beef Co. 

Keep in mind that many corporations are good for our economy, and we’re not here to bash anyone or their business skills. Every company started somewhere small and it’s incredible when one can climb so high.  But we also need to be aware of those that monopolize industries, especially those that are not American companies.  Of the four companies I listed, two are Brazilian-owned companies, and the other two are global commodities that are not necessarily loyal to the American people. They’ll go wherever they can find the cheapest labor and product. Yes, they do a lot of good and bring in a lot of jobs. But again, when any industry becomes monopolized it creates higher prices for the consumers and far too low prices for the supplier. And, once they’ve pushed out the suppliers, they’ll pick up and move on to the next country, leaving the current country’s industry to pick up the devastating pieces. It’s not just a product we’ll be fine without if our industry crashes: it will be our food. 

Sadly, after many of the American processing plants were forced to shut down due to Covid, the price of beef in the grocery store started rising while the price for beef on the ranch was dropping. Luckily, the government stepped in and starting allowing for many small processing plants to stay open and sell straight to the consumer. It not only allowed for the beef industry to continue during the pandemic, but it also gave more competition to those companies trying to monopolize everything. 

Allowing smaller companies to enter competitively in the beef industry, the rancher’s prices go up to where ranchers can actually break even, let alone make an actual profit. It also lowers the prices for consumers, so it’s a healthier economy all around.

We still have a long way to go to steady the industry, and we as consumers also have our own responsibility to make sure we buy as local as possible and make sure the beef we’re buying is truly American raised beef.*  More local, American owned and operated plants buying from American ranchers are coming. And you can bet they’ll have our support! 

One side note: just because it says American beef on the packaging does not mean it’s American raised. It only has to be packaged in the U.S. to earn that title.

*We used the pricing for our 2022 calves because those calves continue to feedlots and then are processed and consumed in 2023.