Unpacking rural America: What the American meatpacking industry tells us about agri-food chains, monopolies and labour.
This blog was written by postgraduate student Adam Charles Wilman as an assessment for the module ‘Global Commodity Chains, Production Networks and Informal Work’, and selected for the blog by Dr Alessandra Mezzadri.
In the early 1900s American journalist Upton Sinclair published his exposé on the working conditions facing immigrant labour in American industrial cities. His grizzly illustrations were first published in the socialist newspaper Appeal to Reason in 1905 and later as a novel entitled The Jungle. Sinclair captivated the public by depicting the unseemly working conditions of people employed by meatpacking companies in the stockyards of Chicago. His hope was to shed light on and exploitation of workers in this industry through labour organization, higher wages and safer working conditions. However, the American public’s reaction was more focused on the health implications of the food they were consuming, leading to the Federal Meat Inspection Act of 1906 with its sole emphasis on product safety and sanitation. Sinclair is quoted as saying “I aimed at the public’s heart and by accident I hit it in the stomach.”
Over a century later, Sinclair’s aim for the heart has still not struck the American Heartland. Corporate concentration in the meat industry has only worsened, with four companies controlling significant proportions of the market. These companies represent a growing phenomenon in global agriculture where large Transnational Corporations (TNCs) integrate vertically and horizontally to increase their control over the agriculture commodity chain. The market control is amplified when broken down by animal, with Sutton writing that “[t]oday, four companies, in varying combinations, control more than eighty-three percent of the beef industry, sixty-six percent of the pork industry, and approximately fifty-five percent of the poultry industry.”[i] The privately held firm Cargill, Inc. for example, operates meat packing and feedlot facilities while also owning the animal feed production facilities.
Indeed, the USDA’s own Economic Research Service noted in a report that “[t]rends in the production and marketing of the U.S. agricultural products are pressuring many markets to concentrate”, adding that this trend is “controversial because processors could use informational and structural advantages to depress farm-level prices compared to what would be generated by a competitive market”.[ii] This concentration in power plays out negatively across the animal protein commodity chain affecting animal producers, meatpacking labourers and the consumer.
On the farm: the producer
The same USDA report demonstrates this power imbalance by showing that the share of producer-negotiated sale prices for hogs was markedly low to begin with and has fallen in recent years. This trend is mirrored with beef producers as the percentage of producer-negotiated cash sales has dropped from around 50% in 2005 to just over 20% in 2014. This means that a vast majority of meat producers are forced to enter into contracts with corporate meat packers and companies like Cargill that own the product from the barnyard to the supermarket shelves. Farmers are responsible for the on-farm production facilities while the firm supplies the feed and owns the animals. America’s farmers are becoming contract labourers without options and are increasingly forced to enter into agreements with TNCs.
In the plant: the labourer
Sinclair noted in The Jungle that jobs in the meatpacking and stockyard industries attracted recent immigrants and workers of lower socio-economic status due to the labour-intensive conditions of the work. Today, the owners of the facilities have a propensity towards taking on undocumented workers and recent immigrants as a form of labour control. What undocumented worker would risk deportation to unionize, fight for higher wages or raise health and safety concerns? The US Department of Labor found that the risk of injury in the meatpacking industry is 2.5 times higher than the national average and the starting wage at JBS, a leading meat processing company, is $13 to $15 an hour, in line with the national average for this occupation. Some news organizations like Harvest Public Media point to the recent decline of immigrant and refugee resettlement in the US and the low unemployment rate as a plight on the meatpacking plants. However, this ignores the fact that workers are significantly underpaid and less regulated every year.
In the community: the consumer
Meatpacking monopolists argue that reducing regulations and increasing contract farming allows them to increase their efficiency and better meet consumer demands in terms of products and prices. This is a laughable argument as Cargill is America’s largest privately held company with revenue in 2018 reaching $114.7 billion. Wan Long, chairman and CEO of the holding company of Smithfield Foods, made $291 million in 2017 alone. The threat of ‘rising consumer prices’ is quickly deployed when the question of workers’ wages is brought up. However, the revenues and wages of the monopolistic companies and their management is conveniently left out of the discussion in the media and political discourse in Washington. This fear tactic is used to attack class solidarity by providing the consumer with a false dichotomy of lower food prices or higher wages for workers. This has broader repercussions for rural communities as lower wages both on the farm and in the meatpacking plants reduces the spending power of what is often the largest source of income for a town, affecting family-owned restaurants and shops as well as rural services like healthcare. In one way or another, it is the consumers that will pay the price of corporate agro-monopolies.
Sinclair’s work in 1905 ushered in new federal regulatory oversight for consumer health and safety. However, his original intentions of uniting workers to force demands for higher wages and safer working conditions have yet to be met. Collective actions that push for stronger labour unions, protections for undocumented workers and an enforcement of anti-trust laws are needed to break this dangerous monopolistic control.
[i] Sutton, K. (2013). The beef with big meat: Meatpacking and antitrust in America’s heartland. South Dakota Law Review, 58(3), 611-640.
[ii] Adjemian, Michael K., Brorsen, B. Wade, Hahn, William, Saitone, Tina L., and Sexton, Richard J. (March 2016). Thinning Markets in U.S. Agriculture, EIB-148, U.S. Department of Agriculture, Economic Research Service.