In a rundown of the ongoing joing Department of Justice/Department of Agriculture antitrust hearings, most recently held in Madison, Wisconsin to examine consolidation in the dairy industry, this article from Dairy Today drops some eyebrow-raising information:
USDA Secretary Tom Vilsack noted that dairy farms numbered 110,000 a decade ago but are approaching 60,000 today. At the same time, the top 10 food retailers now control 82% of food retail sales compared to 65% a year ago.
What does that kind of consolidation do to the market? It creates a spiral of ever-great consolidation, in every link of the food chain.
There was recognition, too, that consolidation in the retail food industry is driving dairy cooperatives to grow larger as well. Rod Nilsestuen, Wisconsin Secretary of Agriculture, notes that Wal•Mart has gross revenues of $408 billion in 2008, Krogers had gross revenues of $77 billion and Kraft had gross sales of $40 billion. In contrast, Land O’Lakes Cooperative had gross sales of $10.4 billion and $3.2 billion in dairy sales. “Big box retailers can exert incredible pressure—they want to buy from a small number of large suppliers,” he says.
The big get bigger and demand bigness from other big players. Meanwhile, what happens to the farm that can’t get big?
Ed King, a registered Holstein breeder with 900 cows from upstate New York, noted that farmer share has dropped from 38% in 2007 to 25% in 2009. “Processors and retailers are flexing their muscle, and there’s been a feeding frenzy for lower prices on the farm,” he says. “We need competitive provisions in contracts because farmers have no control in this process.”
Hmm. A system for ensuring better prices to farmers. Competitive provision in contracts. Giving farmers more control in this process. I wonder what that would look like? Maybe this?
I’ve long felt that Fair Trade wasn’t just for poor farmers in foreign climes. That the policy and practice should be fostered closer to home. After all, the American small farmer often ranks among some of the poorest paid workers.
The fact that so-call “Professionals” can earn 6 figure salaries–most of which they manage to keep & take home and that farmers are barely able to hang onto a few thousand dollars each year–if at all–once they’ve been rolled-over by taxes, fees, regulatory expenses, & corporate pressure tactics is a disparity of diabolical proportions.
People will have to wake up again sooner than later and realize that “The Farmer is the One who feeds them all……”
–Podchef