Chapter 6

• What impact has the consolidation of the meat packing industry had on cattle ranchers?

According to the author, the five meatpacking companies, Armour, Swift, Morris, Wilson, and Cudahy, signed a consent decree in 1920 that forced the ranchers to sell off their stocyards, retail meat stores, railway interests, and lovestock journals. A year later, the Packers and Stockyards Administration, a federal agency with a broad athority to prevent price-fixing and monopolistic behavior in the beef industry was created. For the next fifty years, ranchers sold their cattle in a competitive marketplace. In 1970 the top four meatpacking firms slaughtered only 21 percent of the nation's cattle. Today, the top four meatpacking firms, ConAgra, IBP, Excel, and National Beef, slaughter about 84 percent of the nations cattle. This is one of the main reasons for cattle ranchers pay decreasing so much. Over the last twenty years, the rancher's share of every retail dollar spent on beef has fallen from 63 cents to 46 cents.

• What are "captive supplies" of cattle?

Captive supplies are cattle that are either maintanined in company-owned feedlots or purchased in advance through forward contracts. The captive supplies are maintained until cattle prises start to rise. That is when the large meatpackers can flood the market with their own captive supplies, driving prices back down.