In 1994, Greg Gunthorp’s father warned him and his wife against buying the family sow herd and breeding stock. The market was basically over for the independent producers, his father told him. The price of a pig sold on the commodities market in the mid-1990s went for less than what Gunthorp’s grandfather received during the Great Depression.
But Gunthorp, who lives in Northeast Indiana in LaGrange County, made it work as an independent pig farmer, selling to restaurants throughout the Midwest and through internet sales to consumers who want to know where their meat comes from.
However, due to the continued consolidation of the meat industry, Gunthorp said big companies are now starting to encroach into this territory.
“We’re kind of at the same place today that we were in 1998,” he said. “The big guys have moved into this space with predatory pricing and deceptive marketing, and all of the same kinds of practices that we’ve seen in the commodity market have invaded the (independent) wholesale space.”
It’s not just the meat industry. From seeds to fertilizer to farming equipment, the agricultural supply chain is dominated today by roughly three dozen companies, according to an analysis from Farm Action, a nonprofit dedicated to fighting corporate monopolies in food and agriculture.
Ahead of next month’s presidential election, Investigate Midwest looked into the two candidates’ track records and promises regarding consolidation in the agricultural sector.
Vice President Kamala Harris, the Democratic candidate, has said she plans to continue President Joe Biden’s policies of issuing more funding for smaller meatpackers and enforcing antitrust laws.
Some Republicans said Donald Trump, if elected to a second term, would look to further deregulate the agriculture industry, which they believe could allow smaller meatpackers and independent farmers to better compete against large corporations.
Those corporations “have the power to decide who gets to farm and how they farm, what food gets produced and sold in this country, and how much we all have to pay for it,” said Basel Musharbash, an antitrust attorney and principal author of a consolidation report published by Farm Action.
Critics, like Musharbash, believe the loss of family farms caused by consolidation has simultaneously contributed to the decline in rural populations and reduced wages for farmers and ranchers.
Some also blame consolidation for the rise in food prices, which many Americans have named as the most pressing financial problem facing families this election.
Harris has promised to ban price gouging and fight consolidation in the agriculture industry. Her plan includes expanding farmer access to credit and crop insurance, along with pushing for passage of the Agricultural Right to Repair Act, which would require manufacturers of electronics-enabled agricultural equipment to share documents, parts, software and tools with owners and independent repair shops.
Farmers have been clamoring for the right to repair for years. John Deere sells as much machinery as the next eight largest competitors combined, and currently controls 37% of all agricultural machinery sales in the U.S. The company dominates the submarket for large tractors at 53% and controls 63% of all combine sales in the U.S.
However, Claire Kelloway, food program manager at Open Markets, a nonprofit that has pushed for more corporate oversight and stronger competition enforcement, believes the best way to address consolidation is by aggressively going after violations of antitrust laws and enforcing the Packers and Stockyards Act.
The Packers and Stockyards Act of 1921 was established 100 years ago in response to the concentrated meatpacker market. It also gave more regulatory powers to the federal government to help small independent meat producers.
“There's various levels of exclusive dealing, commercial bribery, predatory marketing practices and advantages that large companies have,” Kelloway said.
Harris has promised to work with Congress to pass bipartisan legislation to create the “Office of the Special Investigator for Competition Matters” within the USDA, which sponsors of the bill say would strengthen enforcement of the Packers and Stockyards Act.
The Harris campaign did not respond to a request for comment.
Trump has not released statements or proposed policies regarding antitrust laws.
However, U.S. Rep. Glenn “GT” Thompson, the Republican chair of the House agriculture committee, believes that under a second Trump term, consolidation could best be reversed by eliminating USDA regulations.
“Long before President Biden, overreaching, over-egregious regulations on food processing meant mom and pops couldn’t survive, they didn’t have the resources to be able to be in compliance,” Thompson told Investigate Midwest during an event at this year’s Republican National Convention.
But environmental groups, like Food and Water Watch, say that deregulation helped lead to the rise of consolidated factory farms. The group, along with 12 other organizations, sued Biden’s Environmental Protection Agency in 2023 over the agency’s failure to regulate factory farm pollution under the Clean Water Act.
Trump’s USDA changes weakened oversight, accelerated consolidation
During Trump’s presidency, his administration gutted one of the USDA agencies responsible for enforcing contract transparency and fairness for poultry and swine farmers. That office, the Grain Inspection, Packers and Stockyards Administration, was folded into the office responsible for marketing agricultural goods, the Agricultural Marketing Service.
The move weakened the agency’s ability to determine whether a meat packer violated the Packers and Stockyards Act. Under Trump, USDA officials suspended fewer individuals and businesses for cheating farmers than during the Obama presidency. Trump also issued fewer fines during his four years in office than Biden did during his first two years, according to the most recent USDA data.
In 2020, under Trump, the USDA further weakened the act by withdrawing Obama-era rules that would have made it easier for livestock farmers to prove that large companies like JBS Foods or Tyson Foods treated them unfairly.
The Trump campaign did not answer direct questions about consolidations. Instead, a spokesperson criticized the Biden administration for the high cost of fertilizer, fuel and machinery. The campaign also touted some of Trump’s rural prosperity programs, such as a $1.3 billion investment for high-speed broadband infrastructure and the $871 million in USDA grants for rural community facilities, like hospitals, schools, libraries, and public safety facilities in rural areas.
In 2019, Trump’s agriculture secretary, Sonny Perdue, defended the consolidation of the agriculture industry. "In America, the big get bigger and the small go out…I don't think in America we, for any small business, we have a guaranteed income or guaranteed profitability,” he told dairy farmers at the Wisconsin World Dairy Expo.
Perdue’s comment bothered some dairy farmers, who have faced plummeting profits for the past 20 years as consolidation has led to fewer farms and more mega-dairies.
The price dairy farmers are paid for fluid milk has not kept up with the costs of production, causing smaller operations to close.
Biden tackles meat industry consolidation with funding and stricter antitrust rules
The number of U.S. farms has been declining since the 1970s, while the average size of remaining farms has steadily increased.
With a goal of increasing competition in the meat market, the Biden administration allocated $1 billion to help small meat producers expand their processing capacity.
Some of the recipients of that grant funding, however, have already closed.
“Those investments down the road will fail if the government doesn't continue to take a strong stand against market abuses and corporate consolidation,” said Angela Huffman, co-founder and president of Farm Action.
“They're giving this money out to small meatpacking plants and startup meatpacking plants, and that's great,” she added. “But the reason there are not more of them is because they don't have a market.”
Kelloway, with Open Markets, said that while the investment is a move in the right direction, it didn't address the consolidated industry’s root problem. In order to prevent large companies from simply purchasing those small, independent meat-packing companies once they’re established, the Biden-Harris administration needs to take additional steps to reinvigorate the enforcement of antitrust laws, she said. Harris said she plans to take those steps.
The Biden administration has also taken a critical posture toward company mergers. In December 2023, the Federal Trade Commission and the Justice Department released new merger guidelines that are the strictest in 20 years, Kelloway said.
Previously, regulators were focused on mergers only insofar as they lower the price for the consumer. However, the new guidelines place more emphasis on the potential for mergers to reduce competition and lead to negative outcomes for workers, consumers, and other parts of the supply chain, even if the merger may lower consumer prices.
The guidelines now state that if a merger is going to give one company 30% or more of a market, it could be grounds to block the deal.
“When you reach these certain levels of concentration, bad things tend to happen for competitors, for consumers, for the market in general,” Kelloway said.
The new guidelines are being applied in the case of the Kroger and Albertsons merger proposal, which is currently being blocked and challenged by the FTC and several attorneys general. Washington and the Colorado attorneys general filed separate cases in state courts to block the merger. Both officials claim the merger would raise prices for consumers and shrink the number of employment options for unionized grocery workers.
Price gouging during the COVID-19 pandemic
Critics of a consolidated meat industry also say it’s more susceptible to market disruptions, pointing to supply chain problems during the COVID-19 pandemic. However, while supply chain delays can be a problem for consumers, large companies often still make a profit. The FTC found that large grocery retailers took advantage of supply chain disruptions during the pandemic in a report released earlier this year.
“Companies are really the ones that can benefit, on both sides, so to speak, in the bottleneck, paying farmers very little, but then also charging consumers more,” Kelloway said.
Throughout 2020, the average price of beef at the grocery store increased by 8.9%, according to the USDA, while prices paid to cattle producers remained low.
Despite the rapid spread of COVID within tight-quartered meatpacking plants, Trump ordered the plants to remain open during the pandemic.
It was later revealed in emails obtained by Investigate Midwest and other outlets that the North American Meat Institute, which represents large agricultural companies, including Tyson and Cargill, wrote a draft of Trump’s order keeping meatpacking plants open during the lockdown.
Later, Trump urged the Department of Justice to conduct an investigation into potential anti-competitive practices. While grocery store prices increased, many cattle producers did not see a similar increase in revenue.
"Are they dealing with each other? What's going on?" Trump asked at the time.
The USDA eventually released a report in 2020 saying it could not conclude if anyone in the cattle industry violated the Packers and Stockyards Act. The DOJ's investigation remains open, according to Bill Bullard, CEO of R-Calf, a nonpartisan organization of U.S. cattle and sheep producers.
Bullard said he hopes to see the next president increase enforcement under the Packers and Stockyards Act and “vigorously enforce antitrust laws” that the Biden administration started. Bullard also praised the Trump administration’s use of tariffs as an economic tool and hopes the new administration will include livestock in an effort to level the playing field for domestic producers.
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