Op-Ed: Where's the Beef?
By South Dakota Governor Kristi Noem
July 9, 2021
America’s meat supply is a matter of national security. If we don’t control our own food supply, then we don’t control our own destiny. South Dakota feeds the world, and we do it better than anybody else. We have more head of cattle per-person than any other state. But anticompetitive practices in the meatpacking industry are threatening that way of life. We need more competition, more transparency, and more options for our cattle producers to market their livestock.
Over time, the beef processing industry has consolidated into 4 mega-packers who control 85% of America’s beef supply. That’s bad for competition, and it leads to higher prices at the grocery store for the American people. Two of these companies are based out of Brazil. And these companies have such a tight control over the marketplace that beef producers are lucky if they make $100 per head of cattle.
Recently, one of these Brazilian companies, JBS, was hacked, and 20% of America’s beef supply went offline overnight. That shouldn’t happen in this country. We need more options to ensure that America’s food can’t be held hostage by bad actors targeting foreign-based companies.
Last year, the US Department of Justice sent civil investigative demands to the 4 mega-packers, but we haven’t heard any updates on this investigation since then. I recently wrote a letter to the DOJ that was co-signed by 5 other governors, and we urged them to continue this investigation so that we can root out anticompetitive practices in our beef supply chain.
In the meantime, South Dakota is taking action to help our cattle producers. My administration recently awarded $5 million in grants to 99 small meat processors across the state of South Dakota. These grants will allow them to expand their operations or start new ones, which will give producers more options when it comes time to sell their livestock.
South Dakota also recently announced that we’ve signed a Competitive Interstate Shipping agreement with the US Department of Agriculture. This agreement will allow our producers to sell state-inspected beef across state lines, opening up even more avenues for increased competition.
I recently discussed next steps with our producers at the Governor’s Ag Summit. The solutions are simple but will be tough to achieve: more competition and more price transparency. Frankly, it will take the support of the entire ag industry to get this done. These solutions will give producers more options to sell their livestock and negotiate better prices. They also will keep costs lower for consumers because the 4 mega-packers won’t be able to completely control the price of beef at the grocery store.
Our food supply is a national security issue. Foreign adversaries shouldn’t be able to take down entire supply chains by hacking a few overly large meatpackers. I pledge to keep working to increase competition in this industry so that we can protect the way of life for our farmers and ranchers while also keeping prices lower for the American people.
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