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Speaker 1: Bloomberg Audio Studios, Podcasts, Radio News.

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Speaker 2: Hello and welcome to another episode of the All Thoughts Podcast.

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Speaker 2: I'm Tracy Alloway and I'm Joe. Wasn't thal Joe? You

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Speaker 2: know what I'm excited about.

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Speaker 3: This could go anywhere, so I'm not gonna guess, just

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Speaker 3: tell me.

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Speaker 2: So we're recording this on March nineteenth. It is the

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Speaker 2: first official day of spring. Oh, and that means that

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Speaker 2: soon it will be berry time, specifically strawberries.

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Speaker 3: I think many parents are talking about these days. But

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Speaker 3: the berry budget that parents.

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Speaker 2: When you said that, I was like smart, people are

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Speaker 2: talking about strawberry.

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Speaker 3: Oh, seriously, Like many this is like a persistent gripe

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Speaker 3: among parents, like how much we have to pay for

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Speaker 3: our kids freshberry habit. Strawberries, blueberries, blackberries, raspberries. They're really

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Speaker 3: expensive and kids just devour them.

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Speaker 2: And kids these days are spoiled. When I was growing up,

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Speaker 2: I had fruit roll ups, which I don't even think

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Speaker 2: you could classify as a fruit product. And all these

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Speaker 2: kids have organic, freshly grown blueberries.

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Speaker 4: Crazy.

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Speaker 3: So when I was a kid, like, yeah, we had

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Speaker 3: like apples and in this summer we had stone fruits,

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Speaker 3: you know, peaches and stuff and then like grapefruit, and

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Speaker 3: that was it.

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Speaker 2: So where do you buy your strawberries from or other berries?

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Speaker 3: Actually, before I answer that question, I want to say

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Speaker 3: one other thing about my childhood no that I may

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Speaker 3: be relevant to this conversation, which is that my grandmother

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Speaker 3: in Michigan, her husband, her second husband, she lived when

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Speaker 3: I was growing up on a farm in Elegant, Michigan.

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Speaker 3: It had dairy, it had cows and stuff, but I

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Speaker 3: also had like all these orchards and stuff. They're peaches

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Speaker 3: and cherries and apple and it was just like wonderful

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Speaker 3: and we had a great time as kids, and we'd

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Speaker 3: gone to the orchard, so I did actually have a

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Speaker 3: lot of fresh fruit. And I haven't been there in

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Speaker 3: many years. But my understanding, I believe that farm is

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Speaker 3: gone and now it's just entirely like soy or some brand,

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Speaker 3: like all of those orchards are gone and it's just

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Speaker 3: like one sort of like efficient unicrop farm these days.

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Speaker 2: It's a microcosm of America's agricultural evolution. All right, Wait,

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Speaker 2: but you didn't answer the question where do you get

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Speaker 2: your strawberries and blueberries and things from?

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Speaker 3: I don't know, probably Trader Joe's usually I think, I

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Speaker 3: don't know, Maybe I don't know, Yeah, probably usual, probably

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Speaker 3: usually Trader Joe's.

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Speaker 2: Can you remember the brand?

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Speaker 3: It's that one. I don't remember the name, but it's

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Speaker 3: that one very brand.

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Speaker 2: It's almost one hundred percent certain to be DRIs Calls.

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Speaker 3: Yeah, that's right, and I specifically associate them with strawberries.

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Speaker 2: But yes, so I think if you go into almost

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Speaker 2: any grocery store in America, you are likely to find

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Speaker 2: DRIs Skulls berries of one sort or another. And the

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Speaker 2: crazy thing about Driscolls is, for me, they're pretty much

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Speaker 2: synonymous with berries. I think berries, you think Driscolls. There's

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Speaker 2: a brand there. However, they don't actually grow any of

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Speaker 2: their own berries.

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Speaker 3: I did not know that. That's really interesting, and it

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Speaker 3: really is weird that there's like a brand that's the

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Speaker 3: berry brand. You say that, and it hadn't really clicked

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Speaker 3: to me that there is like the berry company in America.

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Speaker 3: But yeah, there's the berry company in America's Driscolls.

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Speaker 2: All right, So, as excited as I am about berries

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Speaker 2: this year, and in the interests of equalizing corporate America,

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Speaker 2: I am growing my own berries supply in Connecticut. So

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Speaker 2: I will achieve berries interests. That's right, But I think

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Speaker 2: it's sort of emblematic of a few themes that have

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Speaker 2: come up on the show in one way or another.

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Speaker 2: Number one is the decisions that have gone into creating

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Speaker 2: America's agricultural landscape as it exists today. So you just

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Speaker 2: mentioned the farm in Michigan, Your old family farm used

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Speaker 2: to have fruit orchard, used to grow a variety of

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Speaker 2: different things, and now grows a single unicrop, probably soy

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Speaker 2: or something like that. We've spoken about this at various

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Speaker 2: times on the podcast, so it keeps coming up. The

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Speaker 2: other big theme has to be antitrust and the concentration

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Speaker 2: of power in a few specific areas. So how did

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Speaker 2: it come to be that Driscolls dominates the berry market?

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Speaker 2: We have to ask these questions.

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Speaker 3: I can't wait to find out the answer because I

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Speaker 3: really like up. Like I said, up until you sort

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Speaker 3: of said that, it just had never occurred to me that, oh, yeah,

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Speaker 3: there's just this one company that I associate with berries.

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Speaker 2: You will never be able to escape Driscolls ever. Again.

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Speaker 2: It will be in your mind every time you see

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Speaker 2: a little plastic package of blueberries.

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Speaker 3: Every time we go to the grocery, store and my

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Speaker 3: kids want twenty dollars worth a freshberries.

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Speaker 2: Actually, I should just say we do, in fact have

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Speaker 2: the perfect guests to discuss all this today, and after

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Speaker 2: reading their book, I have come away with a completely

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Speaker 2: different idea of agriculture that I cannot unsee in many ways.

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Speaker 2: And it's kind of depressing because I do walk into

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Speaker 2: grocery stores now and I start muttering to myself about

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Speaker 2: the illusion of choice and dairy Chekhov's and things like that.

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Speaker 2: So I'm going to try to make everyone else more

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Speaker 2: like me. You can't escape it. We're going to be

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Speaker 2: speaking with Austin Frerick. He's the author of a new

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Speaker 2: book it's coming out this month, Barns Money, Power and

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Speaker 2: the Corruption of America's food industry. He's also an all

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Speaker 2: round agricultural and antitrust expert and a fellow of the

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Speaker 2: Thurman Arnold Project over at Yale University. So, Austin, thank

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Speaker 2: you so much for coming on all thoughts.

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Speaker 4: Thank you for having me on. This is such a

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Speaker 4: professional hunter. My husband and I are big fans. We've

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Speaker 4: been big fans since September episode.

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Speaker 2: Oh, thank you. I appreciate that. Let me just say,

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Speaker 2: to begin with now you've been so positive, I'm just

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Speaker 2: going to reiterate what a depressing read this was. Why

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Speaker 2: did you decide to write a book on this topic?

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Speaker 4: Honestly, this whole book started in a bar conversation in

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Speaker 4: De Moine, Iowa. It was twenty eighteen, and it was

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Speaker 4: a big governor's race in the state of Iowa. And

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Speaker 4: Iowa doesn't have campaign contributional limits for state level races,

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Speaker 4: and this political operative over a cheap draft Beers was

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Speaker 4: telling me how this hog farmer donate is the largest

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Speaker 4: donor in Iowa, donated three hundred thousand dollars to the

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Speaker 4: governor's reelection campaign. And he was also telling me how

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Speaker 4: they have a private jet. They fly back and forth

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Speaker 4: between the only gated community in suburban Des Moines to Naples, Florida,

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Speaker 4: and supposedly on this jet where their words and pigs fly,

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Speaker 4: which to me, in my head part of it was, oh,

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Speaker 4: this is good copy. But also this is such a

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Speaker 4: powerful symbol of what happened to Iowa. What is going

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Speaker 4: on when the most politically powerful person in the state

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Speaker 4: is hog Baron. So I originally wrote an article for

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Speaker 4: Vox with my buddy Charlie and then after we published

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Speaker 4: the articles telling this bigger story of how did power

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Speaker 4: consolidate in the hog industry in my lifetime, I realized, oh,

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Speaker 4: this story can be repeated through the food system. This

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Speaker 4: isn't unique to hogs. And then also this Robert Baron framework,

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Speaker 4: to me, is a fun narrative device to tell these bigger,

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Speaker 4: structural type stories.

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Speaker 3: So I mentioned in the intro that I had this

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Speaker 3: idyllic childhood of like running through the farm that my

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Speaker 3: grandmother was living on and picking cherries and eating them

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Speaker 3: right off the tree. And there were tart cherries and

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Speaker 3: red cherries and the golden ones that are multicolored that

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Speaker 3: were my favorite. And now that farm is gone and

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Speaker 3: it's just probably like one crop as far as the

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Speaker 3: eye could see. I take it that it was not

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Speaker 3: just my grandmother's farm. No, I mean, this is the

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Speaker 3: story of the American agricultural system. And what's to me

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Speaker 3: the whole time, what I was thinking in my head

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Speaker 3: when you're telling that story was I kept thinking of

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Speaker 3: a retirement portfolio. M your grandma had a diversified portfolio,

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Speaker 3: different crops going on at once. And what happens now

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Speaker 3: is the system's incredibly fragile because most farms are only

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Speaker 3: one or two crops. Can I just say something, Tracy

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Speaker 3: is a personal regret. So my grandmother's husband, Jack, farmer Jack,

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Speaker 3: if you were alive today, I would be so excited

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Speaker 3: to talk to him, and I just think about, you know,

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Speaker 3: ask him a million questions about like how does dairy work?

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Speaker 3: And how do you get an agreement to get your

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Speaker 3: He also made cider, how do you get your sight

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Speaker 3: or on the shelves. It makes me very sad that,

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Speaker 3: like when I was, you know, eleven, I didn't know

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Speaker 3: that I would be interested in all these topics. I

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Speaker 3: never really talked to him about.

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Speaker 2: This is a very good reminder listeners to ask your

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Speaker 2: relatives all the information that you want to hear about

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Speaker 2: before it's too late. My aunt was quite senior at Countrywide,

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Speaker 2: and she always promised to give me the inside scoop

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Speaker 2: on what was going on pre two thousand and eight,

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Speaker 2: and then she very sadly died early on of cancer.

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Speaker 2: So yes, okay, we all have those regrets. Back to agriculture,

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Speaker 2: that was a slight diversion. How concentrated is the US

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Speaker 2: agricultural or food product landscape?

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Speaker 1: Oh?

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Speaker 4: To me it's one of the most concentrated spaces. It's

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Speaker 4: a combination of a few things. I mean, you can't

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Speaker 4: look at a hog market the same way with like

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Speaker 4: a search engine, because you're not going to take a

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Speaker 4: hog from Iowa and go butcher in North Carolina because

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Speaker 4: of shipping cost. But you also have this whole dynamic

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Speaker 4: of delusion of choice, like you mentioned earlier. I mentioned

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Speaker 4: this briefly in my book, But there's like a peanut

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Speaker 4: butter monopoly. Essentially one company has like roughly a fifty

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Speaker 4: to sixty percent market share. But first of all, most

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Speaker 4: consumers don't see that because they own different price points,

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Speaker 4: because that rich consumer wants to think they're getting different

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Speaker 4: peanut butter than the low income consumer. But on top

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Speaker 4: of it, they tended to most store brands and you

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Speaker 4: only find that out usually through recalls.

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Speaker 3: So yes, okay, there's a highly concentrated food supply in America,

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Speaker 3: and many aspects of the food industry in America are

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Speaker 3: highly concentrated with a few dominant companies. And we'll get

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Speaker 3: into like what some of these companies are and the

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Speaker 3: distribution and the growing or the slaughtering, whether we're talking

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Speaker 3: about meat on the other hand, outside of the inflation

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Speaker 3: that's hit a lot of categories in the world over

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Speaker 3: the last few years, we also live in a world

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Speaker 3: of caloric abundance, and that seems pretty good and in

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Speaker 3: the grand scheme of history, like meat is very cheap,

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Speaker 3: and many people can afford burgers, and many people can

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Speaker 3: afford steak, and many people can afford fresh berries, which

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Speaker 3: really we never had as a kid at all, or

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Speaker 3: very rarely, like I don't remember my parents even, you know,

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Speaker 3: buying berries. So could you make an argument It certainly

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Speaker 3: seems to me like maybe there are some cost and

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Speaker 3: concentration of power issues, but we're in an era of

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Speaker 3: food abundance.

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Speaker 4: So just a few things on that. The first is, actually,

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Speaker 4: per capita, Americans spend more food than Italians, so we

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Speaker 4: actually we pain more and more for our food. This

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Speaker 4: is even before the inflation stuffy according to USDA data.

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Speaker 4: But that's also come at the expensive workers. I mean,

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Speaker 4: that is like the hidden undercurrent. Sure of you can

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Speaker 4: get cheap berries year around, because you have twelve year

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Speaker 4: olds picking berries for other twelve year olds in developing countries.

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Speaker 4: I mean, there's been reporting how basically any produce that's

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Speaker 4: labor intensive with these trade agreements in America has moved

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Speaker 4: offshore and kind of like a T shirt, it's so

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Speaker 4: hard for journalists, especially the state of American media, to

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Speaker 4: go investigate that the plant these farms are basically modern

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Speaker 4: day plantations. And I would also last point on that

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Speaker 4: is the obesity crisis in America. That undercurrent is We've

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Speaker 4: never in the history of mankind had the lower classes

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Speaker 4: be the overweight classes. And that to me is because

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Speaker 4: the way the food system is designed, and I really

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Speaker 4: get at this, my grain baron is you have to

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Speaker 4: have money to beat healthy in America now because the

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Speaker 4: food system picks favorites right now will be heavily subsidized

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Speaker 4: processed foods.

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Speaker 2: Yeah, I can't remember. You actually had a stat in

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Speaker 2: your book specifically about this, and it was the price

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Speaker 2: of fresh fruits and vegetables has gone up a certain

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Speaker 2: amount since I think it was from nineteen eighty, whereas

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Speaker 2: the price of processed foods has gone down quite a lot.

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Speaker 4: So each baron's really built around an idea. And to me,

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Speaker 4: my grain baron, which is Cargill, is about the farm bill.

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Speaker 4: And to me, what I realize is, oh, this whole

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Speaker 4: structure is designed to overproduce grains at the expense of

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Speaker 4: everything else, and so in the constants it's crowding out everything.

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Speaker 4: So like your family farm is, it's cheaper for people

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Speaker 4: to plow up the orchards and put in corn than

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Speaker 4: it does actually grow produce.

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Speaker 3: What do you walk us through this specific You hear

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Speaker 3: people vilify the farm bill a lot. What do you

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Speaker 3: walker through some of the specifics of like what are

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Speaker 3: the sort of policy underpinnings of the farm bill and

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Speaker 3: what it does?

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Speaker 4: Oh man, Joe, this honestly, this reminds me of the

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Speaker 4: tax code. The farm bill has all these interlocking parts. Okay,

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Speaker 4: that took me a while. They really get my head around.

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Speaker 4: So to start off with, the farm bill comes from

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Speaker 4: the New Deal, and that's from the dust bowl. These

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Speaker 4: markets are over supplied and you had massive environmental damage

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Speaker 4: because of people are pushing their land, engaging really destructive practices.

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Speaker 4: So this New Deal farmwork was really centered in supply management,

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Speaker 4: is what they call it. Sure, you can get subsidies,

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Speaker 4: but you have to take land out of production. Most

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Speaker 4: famously created all these reserves, grain reserves, cheese reserves, what

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Speaker 4: have you. The government is trying to figure out the

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Speaker 4: sweet spot for agriculture for production. What you slowly see happen,

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Speaker 4: especially in the nineteen a's on is that framework kind

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Speaker 4: of collapses to you're heavily subsidizing overproducing things. And it's

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Speaker 4: kind of done three different ways. Think of it like

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Speaker 4: a three legged stool. It's crop insurance, which like sixty

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Speaker 4: percent of the premiums on crop insurance is subsidized by

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Speaker 4: the government. You have the commodity programs, which it used

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Speaker 4: to be to get a check like a subsidy check.

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Speaker 4: Now it's kind of done through like a loan forgiveness.

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Speaker 4: And then you also have the conservation programs. To me,

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Speaker 4: like the grains are the big ones here, and then

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Speaker 4: also like the caps have been raised, and also like

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Speaker 4: even in crop insurance there's no cap and how much

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Speaker 4: crop insurance you can get. So it's really pushing you

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Speaker 4: to do this kind of model up production.

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Speaker 2: So talk about how that model of production, in those

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Speaker 2: decisions that were made through things like the Farm Bill,

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Speaker 2: how that led to dominance in particular in the grain industry.

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Speaker 2: And I think your example in the book was Cargil.

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Speaker 4: Yeah, Cargil to me is a fascinating company. I did

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Speaker 4: not originally include this when I started mapping out this book.

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Speaker 4: It's the largest private company in America. They're bigger than

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Speaker 4: the Koch brothers.

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Speaker 2: It's amazing.

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Speaker 4: Yeah, they do, like a think in my I think

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Speaker 4: I one fourth of the world's grade trade. They're the

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Speaker 4: middleman though, like I compare them my book to the

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Speaker 4: closest thing we have in modern to modern day standard oil.

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Speaker 4: But even at the end of that chapter, to me,

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Speaker 4: they're more like the nineteenth century British Empire because the

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Speaker 4: sun never sets on the grain Empire. So the original

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Speaker 4: farm Bill actually to pay for it was a tax

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Speaker 4: on processors companies like Cargill. So the family hated the

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Speaker 4: original farm Bill. They fought it. They didn't like FDR

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Speaker 4: because what the farm bill is doing the original one

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Speaker 4: is limiting production. To me, it's politically brilliant to study

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Speaker 4: because they use middleman. They don't usually engage in their

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Speaker 4: political lobbying straight up. They give money to other groups

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Speaker 4: to do their bidding. But you kind of uncovering the

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Speaker 4: research is, Oh, they want to remove this because they

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Speaker 4: just want to keep They just want tons of grain.

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Speaker 4: And so what Cargill does has been doing slowly is

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Speaker 4: buying up different parts of the supply chain, so you

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Speaker 4: know they'll do like animal feed was a big part

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Speaker 4: of Cargil, and then they got into meatpacking and then

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Speaker 4: now that's just kind of their logic.

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Speaker 2: So how does that actually feed into the antitrust discussion

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Speaker 2: Because on the one hand, if a huge company like

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Speaker 2: Cargill is buying up other businesses, you would expect regulators

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Speaker 2: to be looking at that. But on the other hand,

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Speaker 2: if Cargil is saying, well, we're not necessarily getting more

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Speaker 2: grain producers, we're getting something that's adjacent to producing grain.

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Speaker 2: We're doing grain transportation or storage or something like that,

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Speaker 2: and there are synergies involved, and the American consumer is

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Speaker 2: going to benefit through lower prices. How do those conversations

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Speaker 2: or debates play out.

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Speaker 4: Yeah, So, I mean I start with two fundamental notions

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Speaker 4: of no company buys another company for pro competitive reasons.

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Speaker 4: The goal of a corporate executive, and it's such a

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Speaker 4: simple thing that I realized a few years ago, is monopoly.

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Speaker 4: So you have that fundamental tension in markets where markets

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Speaker 4: competitive markets are roofless, it's hard. Your goal is monopoly.

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Speaker 4: So you're trying to get to a monopoly status. And

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Speaker 4: so what you see with Cargill is they made a

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Speaker 4: lot of these purchases thirty forty years ago before the

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Speaker 4: Robert Bork anti trust framework took hold, that WO had

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Speaker 4: not probably been approved. I can't remember off tom I head,

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Speaker 4: but there's quite a few. I mentioned the book of

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Speaker 4: large Acquisitions they made.

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Speaker 2: You mentioned the magic word just then, which is Robert

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Speaker 2: Bork and full disclosure. I had not realized what a

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Speaker 2: influential figure Bork was in the world of anti trust.

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Speaker 2: And I find it so interesting reading that chapter to

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Speaker 2: compare and contrast the sort of Bork interpretation of anti

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Speaker 2: trust versus what we think about today. And I'm trying

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Speaker 2: to do this without mentioning hipster antitrust, but there is

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Speaker 2: more of a I guess, a throwback today to the

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Speaker 2: idea of, well, is this particular corporate action good for

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Speaker 2: Americans in the sense of labor, not just prices? Whereas

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Speaker 2: Bork basically argued that regulators and the courts should ignore

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Speaker 2: harm to workers and focus purely on consumer prices. So

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Speaker 2: the consumer welfare standard, which seems kind of nuts in retrospect.

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Speaker 4: Yeah, I mean, what's so funny about that? Is number

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Speaker 4: one kind of the undercurrent of this era are so

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Speaker 4: much of the language it's designed to keep people out.

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Speaker 4: These words don't really mean anything. So consumer Welfare Standard

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Speaker 4: has like thirty different ductions by different people. Those words

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Speaker 4: are really hollow, but they sound smart. Two, it tries

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Speaker 4: to reduce this stuff to simple math equations when really

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Speaker 4: like this is about power and who has it. These

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Speaker 4: are moral questions that we're trying to mask with pseudo science.

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Speaker 4: And for me personally, it was a coffee I had

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Speaker 4: with Commissioner con back in twenty fifteen that really got

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Speaker 4: me going on this. I was at the time a

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Speaker 4: Treasury tax economist and I had written a paper on

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Speaker 4: the growth of super rents, which is just like econ

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Speaker 4: speak for monopoly level of profits into tax code. And

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Speaker 4: I was like, huh, what's going on here? Why am

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Speaker 4: I seeing a lot in agriculture, you know, anyone should

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Speaker 4: able to make pop our chips. And read an article

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Speaker 4: she wrote in like twenty twelve on like chicken monopolies.

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Speaker 4: She was a journalist before she became a lawyer, and

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Speaker 4: I was like, oh, this really explains what I see

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Speaker 4: going on. Back in Iowa met with her and she

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Speaker 4: kind of is the one who showed me, oh, there's

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Speaker 4: this whole There's been this fierce intellectual debate in America

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Speaker 4: over how we conceptualize power and kind of tell me

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Speaker 4: that Bork history, And to me is, I mean, there's

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Speaker 4: a lot of talk on big tech, but to me,

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Speaker 4: the my book is really to like overlay that framework

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Speaker 4: to agriculture in the food system.

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Speaker 3: So I take your point about, Okay, a handful of

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Speaker 3: extremely powerful companies have like come to have this dominant

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Speaker 3: position within the agricultural system. On the other hand, it

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Speaker 3: seems like this is a partly and you're applied, not

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Speaker 3: unique to agriculture, which is just that we have seen

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Speaker 3: the rise across many industries of like you know, megga

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Speaker 3: behemoth global we used to call them like in the nineties,

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Speaker 3: like multinational corporations. They're also like economies of scale are

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Speaker 3: a real thing. I believe, you know, like how much

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Speaker 3: of this is like a policy decision versus a sort

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Speaker 3: of more like natural evolution of how many businesses have

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Speaker 3: evolved of like companies figuring out scale and efficiencies. And

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Speaker 3: I have to imagine that setting aside policy that whether

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Speaker 3: we're talking about slaughtering hogs or whether we're talking about

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Speaker 3: growing corn that you could save money and selled it

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Speaker 3: at a cheaper price if you're a big company that

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Speaker 3: has access to a lot of capacity.

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Speaker 4: To me, it's a combination of both. I mean, the

387
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Speaker 4: undercurrent of this book too is a lot of these

388
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Speaker 4: companies got big not through organic growth, but through acquisitions

389
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Speaker 4: that probably would not have been approved before. To me,

390
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Speaker 4: the undercurrent two of this book is the whole negative

391
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Speaker 4: externalities of this market power is just I mean, I

392
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Speaker 4: think to me, as an Iowan, how I fell a

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Speaker 4: part in my lifetime. It's the best farmland in the world.

394
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Speaker 4: It should be the Italy of North America. Yet Iowa

395
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Speaker 4: was now is basically an extraction colony. Like sixty seventy

396
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Speaker 4: percent of the waterways highway you can't go into.

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Speaker 2: This is because the hog runoff. To put it politely, Yeah,

398
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Speaker 2: so Iowa has about twenty five million hawks.

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Speaker 4: Hog defecates like three times more than a human being.

400
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Speaker 4: So we're talking about the manure of the population of

401
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Speaker 4: seventy five million people. Like Texas and California combined, that

402
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Speaker 4: regulatory system because of my hog Baron's capture of the

403
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Speaker 4: state government has been gutted. Keep in mind eye. I

404
00:19:58,680 --> 00:20:02,159
Speaker 4: was also number one in chicken eggs. A lot of cattle.

405
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Speaker 4: Like all this other maneuvers, they have too much maneuver

406
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Speaker 4: for the environment. On top of it, you have this

407
00:20:06,920 --> 00:20:08,600
Speaker 4: animals used to get their feet on land. You know,

408
00:20:08,600 --> 00:20:12,640
Speaker 4: cows walk around, eat grass. They would fertilize their own feed. Now,

409
00:20:12,680 --> 00:20:15,680
Speaker 4: because we basically stuffed most animals into these metal sheds,

410
00:20:16,040 --> 00:20:17,440
Speaker 4: we have to use a lot of fossil fuelds to

411
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Speaker 4: grow their feed. So you also have all that chemicals

412
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Speaker 4: entering the water supply system too. And to add another

413
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Speaker 4: layer to it is most farmland in Iowa's not owned

414
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Speaker 4: by iwands anymore. Grammar Grapa dye kids moved to California.

415
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Speaker 4: They put it into a trust. They rent out the

416
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Speaker 4: land and you can always clock it when you're driving

417
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Speaker 4: because they farm right up to the creek. So all

418
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Speaker 4: those chemicals go right into the creek, including the manure.

419
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Speaker 4: So what they do with these lagoons is they drain them.

420
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Speaker 4: That they put these massive manure lagoons next to the buildings.

421
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Speaker 4: Every few months, they drained the manure and they put

422
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Speaker 4: it into the soil and they'll do in the winter,

423
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Speaker 4: which is just awful. It's kind of illegal, but no

424
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Speaker 4: one enforces that roll in Iowa. So you'll just see

425
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Speaker 4: snow fields covered in snow with manure on it, and

426
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Speaker 4: then just as you know, as the snow melts, it

427
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Speaker 4: just go straight into the water system.

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Speaker 3: What were this civic Iowa regulatory changes? If the story

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Speaker 3: is okay, domess local political power, what were the actual

430
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Speaker 3: regulatory changes that enabled this?

431
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Speaker 4: The big one was the stripping of local control. This

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Speaker 4: was back in nineteen ninety six. Secretary of Vilsack Biden,

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Speaker 4: Secretary of Agriculture, actually voted in favor of this when

434
00:21:18,960 --> 00:21:21,840
Speaker 4: he was a state senator. This whole thing too. I mean,

435
00:21:21,920 --> 00:21:24,119
Speaker 4: you got an open revolt in Iowa. I mean, this

436
00:21:24,240 --> 00:21:27,520
Speaker 4: wasn't just efficiency took hold. It was people are fighting

437
00:21:27,560 --> 00:21:28,120
Speaker 4: tooth and nail.

438
00:21:28,200 --> 00:21:30,600
Speaker 2: I mean, and no one wants to live next to

439
00:21:30,640 --> 00:21:31,560
Speaker 2: a manure lagoon.

440
00:21:31,720 --> 00:21:34,000
Speaker 4: That is like, it smells awful. I mean I can

441
00:21:34,000 --> 00:21:35,720
Speaker 4: barely smell. When you get near one of these things,

442
00:21:35,760 --> 00:21:38,639
Speaker 4: it's awful, and your home value collapses. Ten percent of

443
00:21:38,640 --> 00:21:40,919
Speaker 4: these pigs and these facilities die, so next to everyone

444
00:21:41,040 --> 00:21:43,359
Speaker 4: is a big dumpster fall bloated dead pig bodies. So

445
00:21:43,400 --> 00:21:45,879
Speaker 4: you vultures but on top of it, just from a

446
00:21:45,920 --> 00:21:49,280
Speaker 4: regulatory standpoint, if you treat pig manure like human manure,

447
00:21:49,720 --> 00:21:52,359
Speaker 4: this model collapses. It's not efficient. It's efficient if you

448
00:21:52,400 --> 00:21:55,679
Speaker 4: ignore all the negative externalities on top of it's just cruel.

449
00:21:55,720 --> 00:21:57,760
Speaker 4: I mean, I'm not That's the other thing too, is

450
00:21:57,840 --> 00:22:00,480
Speaker 4: like pigs are very social creatures, are smart, and you're

451
00:22:00,520 --> 00:22:04,000
Speaker 4: putting two thousand of them into these metal sheds. And

452
00:22:04,080 --> 00:22:05,720
Speaker 4: even the I with the open secret is if you

453
00:22:05,760 --> 00:22:08,600
Speaker 4: build it below twenty five hundred pigs, so they'll say

454
00:22:08,600 --> 00:22:12,080
Speaker 4: it's four hundred ninety nine, it's a different regulatory structure.

455
00:22:12,359 --> 00:22:14,400
Speaker 4: But the open secret is they put four thousand in them.

456
00:22:14,760 --> 00:22:16,399
Speaker 4: No one's checking this.

457
00:22:16,640 --> 00:22:19,040
Speaker 2: Yeah, I mean this was one of the incredibly sad

458
00:22:19,480 --> 00:22:25,160
Speaker 2: themes running through your entire book. Joe doesn't care about animals. Joe,

459
00:22:25,200 --> 00:22:25,800
Speaker 2: if I had.

460
00:22:25,640 --> 00:22:28,919
Speaker 3: To thought of the thought of four thousand pigs in

461
00:22:28,960 --> 00:22:32,520
Speaker 3: a metal cage that's designed for twenty five hundred pigs

462
00:22:32,560 --> 00:22:33,159
Speaker 3: disturbs me.

463
00:22:33,280 --> 00:22:35,200
Speaker 2: Let me put that on that never see the light

464
00:22:35,240 --> 00:22:38,840
Speaker 2: of day. Yes, Joe's worst personality flaw, if I had

465
00:22:38,840 --> 00:22:40,920
Speaker 2: to choose one, is that when I when I show

466
00:22:41,000 --> 00:22:44,280
Speaker 2: him a picture of acute animal, he doesn't care at all.

467
00:22:44,280 --> 00:22:44,760
Speaker 4: Good for me.

468
00:22:44,880 --> 00:22:47,359
Speaker 2: That's actually a that's a compliment show. That's the worst

469
00:22:47,400 --> 00:22:50,919
Speaker 2: thing I can think. Okay, So there is that incredibly

470
00:22:50,960 --> 00:22:54,040
Speaker 2: sad aspect running throughout the book. There's also you know,

471
00:22:54,119 --> 00:22:56,840
Speaker 2: you mentioned the manure problem. One of the things I

472
00:22:56,880 --> 00:22:59,000
Speaker 2: was really interested to read in the book is that

473
00:22:59,160 --> 00:23:03,439
Speaker 2: often these big companies are rewarded for coming up with

474
00:23:03,560 --> 00:23:07,960
Speaker 2: solutions to problems that they essentially create. And I can't

475
00:23:08,000 --> 00:23:11,240
Speaker 2: remember the specific name of the cow one.

476
00:23:11,119 --> 00:23:12,919
Speaker 4: I want to Farros Farms and fair Life.

477
00:23:13,080 --> 00:23:15,760
Speaker 2: Yes, yes, can you talk a little bit about that,

478
00:23:15,880 --> 00:23:19,440
Speaker 2: like how companies are basically, you know, rewarded for doing this.

479
00:23:19,720 --> 00:23:24,240
Speaker 4: Oh, that's such a it's almost it's so comical, it's

480
00:23:24,240 --> 00:23:27,800
Speaker 4: so bad. So the big thing, any agricultures, like our

481
00:23:27,800 --> 00:23:31,680
Speaker 4: second largest contributor to climate change, and especially with beef

482
00:23:31,680 --> 00:23:34,719
Speaker 4: and dairy are driving it along with the fossil fuels

483
00:23:34,800 --> 00:23:38,840
Speaker 4: used in food grain production. So dairy, this is getting

484
00:23:38,840 --> 00:23:40,439
Speaker 4: in the weeds. But you know, normally used to be

485
00:23:40,480 --> 00:23:43,480
Speaker 4: pastured family dairy farmers. You know they have sixty seventy cows.

486
00:23:44,080 --> 00:23:46,240
Speaker 4: The cow defecates and you know, creates the fertilizer for

487
00:23:46,280 --> 00:23:48,240
Speaker 4: its feet when you put them into a metal shed,

488
00:23:48,400 --> 00:23:52,359
Speaker 4: they pull the manure. Well, when that manure breaks down

489
00:23:52,800 --> 00:23:55,639
Speaker 4: in a pooled environment, it creates methane gas that's not

490
00:23:55,720 --> 00:23:58,840
Speaker 4: produced when it's on land, and so you have all

491
00:23:58,840 --> 00:24:02,520
Speaker 4: this additional, you know, climate change contributing gas being produced

492
00:24:02,520 --> 00:24:03,639
Speaker 4: in this production model.

493
00:24:03,760 --> 00:24:07,000
Speaker 2: So if the cows are in a field somewhere pooping

494
00:24:07,080 --> 00:24:10,679
Speaker 2: the normal way, that manure would end up on grass

495
00:24:10,680 --> 00:24:13,080
Speaker 2: and it would break down and there wouldn't be a

496
00:24:13,080 --> 00:24:15,760
Speaker 2: lot of methane generated just from that process.

497
00:24:15,440 --> 00:24:17,160
Speaker 4: Can go okay. So not only so when you put

498
00:24:17,200 --> 00:24:19,800
Speaker 4: them inside you create this methane, this additional methane. You're

499
00:24:19,800 --> 00:24:22,359
Speaker 4: also using philesip fuels to grow their feet inside. So

500
00:24:22,400 --> 00:24:24,600
Speaker 4: what the industry is trying to do is create some

501
00:24:24,680 --> 00:24:28,040
Speaker 4: these manure biogesters are called. You basically pool the manure

502
00:24:28,280 --> 00:24:30,320
Speaker 4: and you try to capture the gas coming the methane

503
00:24:30,320 --> 00:24:33,960
Speaker 4: gas coming off it. It takes an immense amount of subsidy,

504
00:24:34,600 --> 00:24:37,000
Speaker 4: and that is USDA is big one of the big

505
00:24:37,040 --> 00:24:40,200
Speaker 4: there're big solutions to climate change right now, is spending

506
00:24:40,240 --> 00:24:42,320
Speaker 4: a ton of money on this. The problem with that

507
00:24:42,440 --> 00:24:46,000
Speaker 4: is you're incentivizing a really destructive model. The dairy industry

508
00:24:46,040 --> 00:24:47,840
Speaker 4: is fascinating to me. It's one of the most complex

509
00:24:47,840 --> 00:24:50,160
Speaker 4: commodities in my opinion. The joke in the dairy world

510
00:24:50,280 --> 00:24:52,320
Speaker 4: is only five people understand that the dairy system, and

511
00:24:52,320 --> 00:24:55,240
Speaker 4: four of them are dead, but are Milk consumption is

512
00:24:55,280 --> 00:24:58,119
Speaker 4: going down, but our dairy consumptions going up because we're

513
00:24:58,119 --> 00:25:01,040
Speaker 4: eating more cheese and ice cream. Those aren't healthy things,

514
00:25:01,280 --> 00:25:03,240
Speaker 4: and we're producing more. And we're also doing in regions

515
00:25:03,240 --> 00:25:07,080
Speaker 4: that environmentally cannot sustain it, the Texas Panhandle in New Mexico.

516
00:25:07,200 --> 00:25:10,600
Speaker 4: Like my favorite little cocktail chatter is that Mexico Dairy

517
00:25:10,640 --> 00:25:13,840
Speaker 4: does three times more dairy than Vermont. And so you

518
00:25:14,000 --> 00:25:18,840
Speaker 4: have this system, this is being sold as a solution

519
00:25:19,119 --> 00:25:21,640
Speaker 4: to a problem it created itself that didn't exist before.

520
00:25:22,320 --> 00:25:25,600
Speaker 4: And that to me is like, I mean, they're trying

521
00:25:25,600 --> 00:25:26,680
Speaker 4: to put ethyl on the airplanes.

522
00:25:26,720 --> 00:25:26,920
Speaker 2: Now.

523
00:25:27,040 --> 00:25:29,359
Speaker 4: I thought that the conversation ethanol's over. But that's a

524
00:25:29,440 --> 00:25:32,560
Speaker 4: sort of the modern agricultural system is we have all

525
00:25:32,680 --> 00:25:37,520
Speaker 4: this money sloshing around, kind of corrupting an honest conversation.

526
00:25:53,560 --> 00:25:56,800
Speaker 3: In your life and maybe even within the span of

527
00:25:56,880 --> 00:25:59,359
Speaker 3: time that you've got interested in this specific subject that

528
00:25:59,480 --> 00:26:03,200
Speaker 3: wrote the book, have you sensed a change in the

529
00:26:03,240 --> 00:26:06,359
Speaker 3: politics of food because I feel like when I was

530
00:26:06,400 --> 00:26:11,560
Speaker 3: a kid, that being anti factory farming as it was called,

531
00:26:11,760 --> 00:26:16,720
Speaker 3: animal welfare, multinational corporations, many of these things I would

532
00:26:16,720 --> 00:26:21,399
Speaker 3: have primarily associated with liberals or the left. And I

533
00:26:21,480 --> 00:26:25,080
Speaker 3: get the impression that these days that actually, like the

534
00:26:25,160 --> 00:26:28,199
Speaker 3: sort of debasing of the food system, the poisoning of

535
00:26:28,280 --> 00:26:32,760
Speaker 3: the food system, et cetera, is actually migrating a little bit,

536
00:26:32,800 --> 00:26:35,119
Speaker 3: and that you see more of this talk on the right.

537
00:26:35,240 --> 00:26:37,679
Speaker 3: There's even something you've written about, which is that I

538
00:26:37,680 --> 00:26:41,040
Speaker 3: think it was in like the nineteen ninety six primary,

539
00:26:41,119 --> 00:26:43,840
Speaker 3: Pat Buchanan making a lot of hay, so to speak,

540
00:26:44,400 --> 00:26:48,480
Speaker 3: by talking about thank you, not intentional changes in hog production,

541
00:26:48,600 --> 00:26:51,520
Speaker 3: but that the dominant strain among mainstream Republicans was like

542
00:26:51,520 --> 00:26:53,800
Speaker 3: pretty like safely on the side of the big business.

543
00:26:53,800 --> 00:26:56,000
Speaker 3: Can you talk a little bit about that political evolution?

544
00:26:56,359 --> 00:26:57,800
Speaker 4: Yeah, I mean that to me is like one of

545
00:26:57,800 --> 00:27:01,040
Speaker 4: the most hopeful things about this the food system right

546
00:27:01,080 --> 00:27:04,199
Speaker 4: now is the chance for a bipartisan reform movement. I

547
00:27:04,240 --> 00:27:06,040
Speaker 4: mean a lot of the ideas in the book started

548
00:27:06,040 --> 00:27:08,080
Speaker 4: in articles I wrote in An American Conservative. I mean

549
00:27:08,080 --> 00:27:10,919
Speaker 4: that I was very intentional on that, but I mean

550
00:27:10,960 --> 00:27:13,160
Speaker 4: I think a few things are contributing to that. Number One.

551
00:27:13,320 --> 00:27:15,080
Speaker 4: I feel like when most Americans go abroad now, one

552
00:27:15,080 --> 00:27:16,439
Speaker 4: of the first things you always hear from them is

553
00:27:16,560 --> 00:27:17,919
Speaker 4: food is better and cheaper abroad.

554
00:27:18,080 --> 00:27:22,240
Speaker 3: And I lost while I was traveling on Italian post

555
00:27:23,119 --> 00:27:24,080
Speaker 3: that Yeah, yeah, that.

556
00:27:24,160 --> 00:27:26,960
Speaker 4: And then also like the undercurrent two for a lot

557
00:27:27,000 --> 00:27:29,680
Speaker 4: of these parents, I mean, especially in meat packing, they're

558
00:27:29,680 --> 00:27:34,399
Speaker 4: not American companies the meat industry, these are state backed monopolies.

559
00:27:34,440 --> 00:27:36,840
Speaker 4: I mean, they're they're intentional development strategies of like in

560
00:27:36,880 --> 00:27:40,240
Speaker 4: the beef packing, my sladering Baron is a JBS. First

561
00:27:40,240 --> 00:27:42,960
Speaker 4: of all, they became a monopoly through bribery. They admitted

562
00:27:42,960 --> 00:27:44,640
Speaker 4: to it, and the fact that we let them keep

563
00:27:44,640 --> 00:27:47,520
Speaker 4: their monopoly status is kind of incredible. But that was

564
00:27:47,520 --> 00:27:50,000
Speaker 4: an intentional development strategy by the country of Brazil to

565
00:27:50,119 --> 00:27:54,400
Speaker 4: have a dominant player. And so that's why, I mean,

566
00:27:54,560 --> 00:27:56,480
Speaker 4: the beef farmers right now have just been an uproar

567
00:27:56,520 --> 00:27:58,680
Speaker 4: the last few years because I mean, they're if I

568
00:27:58,720 --> 00:28:00,680
Speaker 4: could include one graph of my book would be on

569
00:28:00,960 --> 00:28:02,480
Speaker 4: what you're paying in the store for beef and what

570
00:28:02,560 --> 00:28:04,720
Speaker 4: ranchers are getting. It is diverged so much.

571
00:28:04,920 --> 00:28:07,399
Speaker 2: The margins basically yes.

572
00:28:07,240 --> 00:28:10,000
Speaker 4: Say more on the So basically the family farm has

573
00:28:10,080 --> 00:28:12,520
Speaker 4: died in dairy and hog production, beef is the last

574
00:28:12,520 --> 00:28:16,720
Speaker 4: one standing. And you have you know, these animals are huge,

575
00:28:16,720 --> 00:28:18,920
Speaker 4: you can't ship them far. So even though you know

576
00:28:19,040 --> 00:28:21,280
Speaker 4: three companies might have let's say eighty percent market sure

577
00:28:21,320 --> 00:28:23,159
Speaker 4: when you're in Montana, you really don'tly only have one

578
00:28:23,240 --> 00:28:25,560
Speaker 4: or two packers. And so what they're trying to do

579
00:28:25,640 --> 00:28:28,199
Speaker 4: right now, besides only having one or two options, is

580
00:28:28,200 --> 00:28:30,359
Speaker 4: they're trying to kill the spot market, which in my

581
00:28:30,400 --> 00:28:33,679
Speaker 4: head I compared to eBay. They want production contracts, and

582
00:28:33,760 --> 00:28:37,440
Speaker 4: so you're having this combination of the US cattle herd

583
00:28:37,520 --> 00:28:39,320
Speaker 4: is at the lows since nineteen fifties, and part of

584
00:28:39,320 --> 00:28:42,240
Speaker 4: that's because of the drought and the Great Plains. But also,

585
00:28:42,720 --> 00:28:45,600
Speaker 4: and this is where I think is super fascinating is

586
00:28:45,800 --> 00:28:49,800
Speaker 4: GPS has it has production, it's slaughterers animals and all

587
00:28:49,840 --> 00:28:53,680
Speaker 4: the beef production regions of the world Australia, Brazil and America,

588
00:28:54,320 --> 00:28:56,320
Speaker 4: and so it just kind of shuffles based on currencies

589
00:28:56,640 --> 00:28:59,720
Speaker 4: that beef you're seen in the store, So farmers are

590
00:29:00,440 --> 00:29:02,120
Speaker 4: they just don't have a lot of buying power right now.

591
00:29:02,920 --> 00:29:04,560
Speaker 4: The other thing too, with beef is they haven't quite

592
00:29:04,560 --> 00:29:06,640
Speaker 4: figured out the industrial production model with it.

593
00:29:06,640 --> 00:29:12,520
Speaker 2: They're starting to industrial production model of beef. Sounds delicious, No,

594
00:29:12,520 --> 00:29:16,320
Speaker 2: no dystopian, thank you too. So there are a number

595
00:29:16,320 --> 00:29:20,640
Speaker 2: of moments in this book that are disturbing in various ways.

596
00:29:20,760 --> 00:29:24,080
Speaker 2: And one of the moments where I kind of gasped

597
00:29:24,240 --> 00:29:27,440
Speaker 2: audibly had to do with the dairy industry and the

598
00:29:27,560 --> 00:29:32,240
Speaker 2: checkof system. And a lot of people will never have

599
00:29:32,400 --> 00:29:36,360
Speaker 2: heard of checkofs, but they will have heard of advertising

600
00:29:36,480 --> 00:29:40,200
Speaker 2: campaigns like got Milk. So could you maybe explain what

601
00:29:40,280 --> 00:29:42,560
Speaker 2: those are and how they tie into I guess the

602
00:29:42,600 --> 00:29:46,280
Speaker 2: structural decision to over produce certain commodities and then you

603
00:29:46,360 --> 00:29:49,240
Speaker 2: have to figure out ways to ramp up consumption.

604
00:29:49,560 --> 00:29:51,800
Speaker 4: Yeah. No, I'm so glad you asked about checkofs because

605
00:29:51,840 --> 00:29:53,880
Speaker 4: it's one of those things where I was so determined

606
00:29:53,880 --> 00:29:55,800
Speaker 4: to put them in my book, but it's so hard

607
00:29:55,800 --> 00:29:58,160
Speaker 4: to explain it to people. So checkofs go back to

608
00:29:58,160 --> 00:30:00,520
Speaker 4: the nineteen thirties. They come out of Florida. It was

609
00:30:00,600 --> 00:30:03,400
Speaker 4: basically these tiny little things of flora orange juice way

610
00:30:03,440 --> 00:30:06,920
Speaker 4: to advertise a commodity. They were a little tax on producers.

611
00:30:07,480 --> 00:30:10,000
Speaker 4: They rarely started ramping up in the nineteen eighties, as

612
00:30:10,080 --> 00:30:11,920
Speaker 4: is what I call the Wall Street farm belt to cold.

613
00:30:12,160 --> 00:30:15,680
Speaker 4: Where As them were over producing a few things, how

614
00:30:15,680 --> 00:30:17,880
Speaker 4: do we stimulate demand became the goal of a check off,

615
00:30:18,520 --> 00:30:21,360
Speaker 4: so farmers. I tell the story how farmers could vote

616
00:30:21,400 --> 00:30:23,560
Speaker 4: to create one and they create one. There's a whole

617
00:30:23,560 --> 00:30:25,840
Speaker 4: different conversation over farmers could vote in one, but the

618
00:30:25,920 --> 00:30:27,480
Speaker 4: USDA won't allow it, and I kind of tell that

619
00:30:27,480 --> 00:30:29,880
Speaker 4: story with hogs. They threw out the vote in the

620
00:30:29,960 --> 00:30:33,560
Speaker 4: late nineties. But so you have this, most of them

621
00:30:33,560 --> 00:30:35,240
Speaker 4: are kind of small. There's like twenty or thirty check

622
00:30:35,240 --> 00:30:37,640
Speaker 4: offs Christmas Tree check off, popcorn check off there mostly

623
00:30:38,040 --> 00:30:38,320
Speaker 4: so the.

624
00:30:38,360 --> 00:30:41,200
Speaker 2: Christmas tree farmers basically got together and they say we're gonna,

625
00:30:41,320 --> 00:30:43,920
Speaker 2: you know, pool like a certain amount of money, and

626
00:30:43,960 --> 00:30:47,280
Speaker 2: that money is going to go to promoting Christmas trees

627
00:30:47,320 --> 00:30:48,560
Speaker 2: and getting people to buy more.

628
00:30:48,840 --> 00:30:52,040
Speaker 4: Yes, but dairy's a different one. Dairy we're talking about

629
00:30:52,040 --> 00:30:55,280
Speaker 4: a six hundred million dollar annual budget, so you're taking

630
00:30:55,280 --> 00:30:57,400
Speaker 4: at tax and dairy farmers and it was, you know,

631
00:30:57,440 --> 00:31:00,640
Speaker 4: got milk is the famous thing. But they real My

632
00:31:00,720 --> 00:31:03,840
Speaker 4: conversations with people is that didn't stimulate demand, or it

633
00:31:03,880 --> 00:31:06,880
Speaker 4: didn't really work. So what I argue has happened is

634
00:31:06,960 --> 00:31:10,000
Speaker 4: instead of trying to do advertisement, it's moved to financing

635
00:31:10,080 --> 00:31:13,080
Speaker 4: junk science. A lot of this science over these minor

636
00:31:13,160 --> 00:31:16,120
Speaker 4: digesters is being financed by these check offs, by the

637
00:31:16,160 --> 00:31:18,600
Speaker 4: dairy chuck off. To me, it's filling the void as

638
00:31:18,600 --> 00:31:22,080
Speaker 4: we privatize our colleges, universities of America, especially the land

639
00:31:22,080 --> 00:31:24,240
Speaker 4: grants and all the country. The check off dollars have

640
00:31:24,280 --> 00:31:27,080
Speaker 4: filled that void. And so that to means why the

641
00:31:27,080 --> 00:31:30,960
Speaker 4: agricultural markets that partly have gotten so concentrated, is you

642
00:31:31,120 --> 00:31:34,040
Speaker 4: have this whole pot of money collectively eight hundred billion

643
00:31:34,080 --> 00:31:35,800
Speaker 4: dollars we don't even know, by the way, because USDA

644
00:31:35,840 --> 00:31:38,080
Speaker 4: is atrocious that keeping track of it. There's tons of

645
00:31:38,080 --> 00:31:41,479
Speaker 4: government accountability reports getting on them to do something. They

646
00:31:41,480 --> 00:31:44,320
Speaker 4: don't do anything. But it's revolving door. So a lot

647
00:31:44,320 --> 00:31:46,160
Speaker 4: of USDA officials go work at a check off, they

648
00:31:46,160 --> 00:31:49,720
Speaker 4: come back. Secretary of Villsac did that. So between administrations,

649
00:31:49,760 --> 00:31:52,400
Speaker 4: his job was he was an dairy export lobbyist. So

650
00:31:52,440 --> 00:31:55,040
Speaker 4: his job was Canada has a supply management dairy system,

651
00:31:55,280 --> 00:31:56,840
Speaker 4: so his job was basically gut it so we could

652
00:31:56,880 --> 00:32:00,200
Speaker 4: dump our surplus cheese into their markets. But that me

653
00:32:00,400 --> 00:32:03,360
Speaker 4: is such a key thing. So my dairy baron, I

654
00:32:03,640 --> 00:32:06,360
Speaker 4: tell the story of how he actually first financed a

655
00:32:06,440 --> 00:32:09,760
Speaker 4: lawsuit to in the check off because what he realized

656
00:32:09,800 --> 00:32:12,600
Speaker 4: what happened with hogs in Iowa was he needs to

657
00:32:12,640 --> 00:32:14,720
Speaker 4: have a branded thing or else he's going to die

658
00:32:14,760 --> 00:32:18,000
Speaker 4: like the hog farmers. He tested out in Texas at

659
00:32:18,040 --> 00:32:21,760
Speaker 4: the grocery store, hab like a bougie milk product, and

660
00:32:21,880 --> 00:32:25,920
Speaker 4: he was upset, Why finance my competitor, this generic milk product,

661
00:32:26,240 --> 00:32:28,480
Speaker 4: So he financed lawsuit Dennet and basically I tell the

662
00:32:28,480 --> 00:32:30,520
Speaker 4: story of how he seemingly made peace with the check

663
00:32:30,560 --> 00:32:32,600
Speaker 4: off and he was able to use some checkoff dollars

664
00:32:32,800 --> 00:32:36,000
Speaker 4: to finance not only you know, these manure digesters, but

665
00:32:36,040 --> 00:32:39,040
Speaker 4: also this branded drink he helped create called fair Life.

666
00:32:39,240 --> 00:32:41,720
Speaker 4: If you got any GM in America, young men love

667
00:32:41,760 --> 00:32:43,840
Speaker 4: it because it's super high protein content. If you got

668
00:32:43,840 --> 00:32:46,160
Speaker 4: a plant fitness, it's just full of kids drinking that stuff.

669
00:32:46,800 --> 00:32:48,120
Speaker 2: Something to replace celsium.

670
00:32:48,280 --> 00:32:51,080
Speaker 3: Yeah, that sounds good. Yeah, that's that's my first thought.

671
00:32:51,080 --> 00:32:52,560
Speaker 3: I was like, Oh, I'm going to try when tomorrow

672
00:32:52,600 --> 00:32:55,960
Speaker 3: when I go to the gym. You mentioned that so

673
00:32:56,080 --> 00:32:59,600
Speaker 3: much of the land in Iowa is not owned by

674
00:32:59,640 --> 00:33:03,600
Speaker 3: Iowa anymore. You know, Like I said, I was born

675
00:33:03,640 --> 00:33:06,720
Speaker 3: in Michigan. I lived for many years in Illinois, but

676
00:33:06,800 --> 00:33:08,600
Speaker 3: I didn't want to stay in the Midwest. I wanted

677
00:33:08,640 --> 00:33:11,440
Speaker 3: to come to New York City and be a professional podcaster.

678
00:33:12,200 --> 00:33:15,400
Speaker 3: And I get like sentimentally, like I said, Oh, my

679
00:33:15,840 --> 00:33:19,520
Speaker 3: idyllic family farm in Alligated in Michigan, it was so

680
00:33:19,520 --> 00:33:21,840
Speaker 3: beautiful in the berries. But like, ultimately, like I didn't

681
00:33:21,880 --> 00:33:24,200
Speaker 3: want to stay. You know, I never aspired to be

682
00:33:24,280 --> 00:33:26,920
Speaker 3: a farmer. Like, how much of this is just like

683
00:33:27,600 --> 00:33:31,280
Speaker 3: structural changes in people's preferences that are just sort of

684
00:33:31,520 --> 00:33:35,840
Speaker 3: maybe even much bigger than food. And yeah, you know,

685
00:33:36,000 --> 00:33:39,560
Speaker 3: we remember fondly these small farms, but the next generation

686
00:33:39,640 --> 00:33:40,600
Speaker 3: doesn't want to stick around.

687
00:33:40,920 --> 00:33:43,680
Speaker 4: I mean, that's a really key point to remember. And

688
00:33:43,720 --> 00:33:46,120
Speaker 4: that's something I mean, I wrote this book over five years. Yeah,

689
00:33:46,120 --> 00:33:47,360
Speaker 4: and the beauty of doing that is you write a

690
00:33:47,360 --> 00:33:50,200
Speaker 4: little bit, you walk away, and we romanticize a Glorian

691
00:33:50,240 --> 00:33:52,120
Speaker 4: pass a lot. Yeah. I don't want to go back

692
00:33:52,120 --> 00:33:54,760
Speaker 4: to that new deal supply management system because in the day,

693
00:33:56,120 --> 00:33:57,920
Speaker 4: I'm at the point now we junk the farm bill,

694
00:33:58,120 --> 00:34:01,560
Speaker 4: take that money it's too corrupted put into conservation programs

695
00:34:01,680 --> 00:34:03,840
Speaker 4: because every farmland is different. The way you do farmland

696
00:34:03,840 --> 00:34:06,800
Speaker 4: connecticuts different than Hawaii than Iowa. Also, the growth of

697
00:34:06,880 --> 00:34:10,239
Speaker 4: robotics in agriculture has been really underappreciated. You go to

698
00:34:10,239 --> 00:34:12,440
Speaker 4: a farm show. Now, these things drive themselves. I mean

699
00:34:12,440 --> 00:34:15,120
Speaker 4: they cost like six hundred thousand dollars and they're gonna

700
00:34:15,120 --> 00:34:18,359
Speaker 4: happen before cars. So like most there's a very good

701
00:34:18,400 --> 00:34:20,960
Speaker 4: chance that most Roe crops are going to be robotics

702
00:34:21,080 --> 00:34:24,960
Speaker 4: very very soon. But to me, animals is the key

703
00:34:25,000 --> 00:34:29,080
Speaker 4: thing here. I really want to put animals back on

704
00:34:29,120 --> 00:34:31,320
Speaker 4: the land because the whole thing too to keep in

705
00:34:31,400 --> 00:34:34,480
Speaker 4: mind is this model makes pretty bad tasting food. When

706
00:34:34,480 --> 00:34:36,040
Speaker 4: I was writing this book, I was doing a little

707
00:34:36,040 --> 00:34:37,120
Speaker 4: like I would do a milk tasting.

708
00:34:37,280 --> 00:34:40,960
Speaker 2: This is how you get those steak officionados on board

709
00:34:41,000 --> 00:34:45,359
Speaker 2: by saying you'll have more abundant, good quality meat by

710
00:34:45,400 --> 00:34:46,400
Speaker 2: fixing the system.

711
00:34:46,600 --> 00:34:48,640
Speaker 4: Oh like my wedding. My husband and I got married

712
00:34:48,640 --> 00:34:50,960
Speaker 4: in Iowa, and I was insistent we had pastor meat

713
00:34:50,960 --> 00:34:53,320
Speaker 4: and dairy. My mom's on a tow alve Irish Catholic,

714
00:34:53,320 --> 00:34:55,680
Speaker 4: you know, tales all this time, and we serve pork,

715
00:34:55,719 --> 00:34:57,680
Speaker 4: and the amount of people in my Iowa family is like,

716
00:34:57,680 --> 00:34:59,719
Speaker 4: this is the best tasting pork. Was just like we

717
00:34:59,800 --> 00:35:01,719
Speaker 4: kept hearing that, and it's just like, oh, you're used

718
00:35:01,719 --> 00:35:04,080
Speaker 4: to like when animal sands inside the metal shuttle that

719
00:35:04,160 --> 00:35:05,640
Speaker 4: needs corn from a ceiling, it's not going to taste

720
00:35:05,640 --> 00:35:07,240
Speaker 4: as good as animal that does piggy things.

721
00:35:24,040 --> 00:35:27,520
Speaker 2: So you mentioned scrapping the farmvillage just then what can

722
00:35:27,560 --> 00:35:30,080
Speaker 2: be done at this point too, I guess reverse some

723
00:35:30,120 --> 00:35:35,080
Speaker 2: of the structural decisions that have gone into producing America's

724
00:35:35,120 --> 00:35:37,160
Speaker 2: agricultural system as it is now.

725
00:35:37,480 --> 00:35:39,439
Speaker 4: Yeah, So one of the things that gives me hope

726
00:35:39,480 --> 00:35:42,120
Speaker 4: is the movement to evs, electric vehicles and cars. It's

727
00:35:42,160 --> 00:35:44,319
Speaker 4: going to kill ethanol. I think ethanol has been one

728
00:35:44,320 --> 00:35:46,799
Speaker 4: of the most destructive things happened to the Middlewest. It

729
00:35:46,960 --> 00:35:48,840
Speaker 4: actually pushed a lot of cattle farmers out, but you know,

730
00:35:48,920 --> 00:35:51,960
Speaker 4: pushed them off their land. Instead of having cattle and pasture,

731
00:35:52,000 --> 00:35:54,600
Speaker 4: they put in corn. And also, the thing to keep

732
00:35:54,600 --> 00:35:57,720
Speaker 4: in mind is the single largest use of cornhouse ethanol.

733
00:35:58,400 --> 00:36:00,720
Speaker 4: And that transition is going to happen fast. When it happens,

734
00:36:00,760 --> 00:36:04,399
Speaker 4: and so how do we kind of start pivoting? So

735
00:36:04,600 --> 00:36:07,839
Speaker 4: as you know, ethanol dies that we slowly phase out

736
00:36:07,840 --> 00:36:10,879
Speaker 4: these industrial animal facilities, but animals back on the land.

737
00:36:11,160 --> 00:36:13,720
Speaker 4: It's a good jobs program, you know, for rural America,

738
00:36:13,719 --> 00:36:16,239
Speaker 4: because there's only so many animals one person can do.

739
00:36:16,800 --> 00:36:19,840
Speaker 4: I think using school meals is a really good procurement

740
00:36:19,880 --> 00:36:22,200
Speaker 4: way to like drive the supply chain. Like who does

741
00:36:22,800 --> 00:36:26,160
Speaker 4: who doesn't want Wisconsin kids even drinking pasture milk? You know,

742
00:36:26,280 --> 00:36:29,360
Speaker 4: stuff like that. And then what started this whole conversation

743
00:36:29,400 --> 00:36:32,080
Speaker 4: over berries is that model of berry production is rooted

744
00:36:32,120 --> 00:36:36,399
Speaker 4: in sharecropping and just ban that, like you can't.

745
00:36:36,960 --> 00:36:39,000
Speaker 3: Explain more what is the specific berry model?

746
00:36:39,040 --> 00:36:41,359
Speaker 4: So the berry model actually comes out chicken. I didn't

747
00:36:41,360 --> 00:36:45,960
Speaker 4: even when I started writing this tournament. It's a tournament's system.

748
00:36:46,200 --> 00:36:48,239
Speaker 4: So when the meat regulations were written in a century ago

749
00:36:48,280 --> 00:36:50,520
Speaker 4: and response to the junkle and all that stuff, chicken

750
00:36:50,560 --> 00:36:53,360
Speaker 4: wasn't written to the regulations, okay, because there wasn't. You

751
00:36:53,360 --> 00:36:54,880
Speaker 4: didn't buy chickens at the store. You just had on

752
00:36:54,880 --> 00:36:57,240
Speaker 4: in the backyard and you killed it. So this model

753
00:36:57,280 --> 00:36:59,360
Speaker 4: comes out of the South. Where have you guys to

754
00:36:59,400 --> 00:37:02,160
Speaker 4: find the trend system before I know? Or we need

755
00:37:02,200 --> 00:37:06,120
Speaker 4: a new US? Yes, okay, so they call it the

756
00:37:06,160 --> 00:37:08,640
Speaker 4: Southern model. If you're a chicken farmer in America, you

757
00:37:08,680 --> 00:37:11,319
Speaker 4: don't actually own your bird. You're given the bird by

758
00:37:11,320 --> 00:37:13,480
Speaker 4: the company, the feed toll it feed to use whatever.

759
00:37:14,000 --> 00:37:17,399
Speaker 4: You basically babysit the bird. You then sell, you give

760
00:37:17,400 --> 00:37:20,160
Speaker 4: it back to the company. They weigh it. You're paid

761
00:37:20,160 --> 00:37:22,759
Speaker 4: on tournament systems. Whoever adds the most weights gets paid

762
00:37:22,800 --> 00:37:26,520
Speaker 4: the most. So if Joe, you're not behaving badly, if

763
00:37:26,520 --> 00:37:28,480
Speaker 4: I don't really like you as some company, I give

764
00:37:28,480 --> 00:37:30,239
Speaker 4: you the run of litter, you get paid the lease.

765
00:37:30,760 --> 00:37:33,239
Speaker 4: You know you're not making that much money. Also, you

766
00:37:33,239 --> 00:37:35,960
Speaker 4: have a ton of debt. These stats are a little old,

767
00:37:36,000 --> 00:37:38,080
Speaker 4: but it's like seventy percent chicken farmers on America live

768
00:37:38,120 --> 00:37:41,080
Speaker 4: in poverty. And so you have this model take hold

769
00:37:41,239 --> 00:37:44,799
Speaker 4: in the South with chicken production. And because of that,

770
00:37:44,840 --> 00:37:48,080
Speaker 4: where you're shifting all the externalities and really abusing farmers

771
00:37:48,080 --> 00:37:51,280
Speaker 4: in labor, chickens really cheap to produce, so it gains

772
00:37:51,280 --> 00:37:54,200
Speaker 4: massive amount of market share in the protein markets. Well

773
00:37:54,239 --> 00:37:56,480
Speaker 4: instead of us stay, instead of forcing chicken to behave

774
00:37:56,560 --> 00:37:58,640
Speaker 4: like the other meats, what we see as a race

775
00:37:58,680 --> 00:38:01,920
Speaker 4: to the bottom. Arding the eastern shore of North Carolina,

776
00:38:02,000 --> 00:38:04,719
Speaker 4: the hog markets in the poor black areas starts doing

777
00:38:04,719 --> 00:38:06,960
Speaker 4: this model. To me is the best example of structural

778
00:38:07,000 --> 00:38:09,080
Speaker 4: racism in the food system is you have these poor

779
00:38:09,080 --> 00:38:12,120
Speaker 4: black areas North Carolina full of these industrial hawk facilities,

780
00:38:12,440 --> 00:38:15,319
Speaker 4: and because of the water table levels North Carolina, they

781
00:38:15,360 --> 00:38:17,360
Speaker 4: can't and usually and I where they take them manure

782
00:38:17,400 --> 00:38:19,520
Speaker 4: and they inject it into the field, and North Carolina

783
00:38:19,560 --> 00:38:21,719
Speaker 4: they spray it in the air. You have all these

784
00:38:21,719 --> 00:38:23,880
Speaker 4: stories of like you know, poor black churches having to

785
00:38:23,880 --> 00:38:26,600
Speaker 4: repeat their steeples every few years or they're dry. You know,

786
00:38:26,600 --> 00:38:29,200
Speaker 4: you can't do laundry outside, dry it out play. So

787
00:38:29,400 --> 00:38:32,640
Speaker 4: this model then replicates across the food system, most notably

788
00:38:32,719 --> 00:38:35,720
Speaker 4: the berries. And I tell this story how the Drisco

789
00:38:35,840 --> 00:38:38,600
Speaker 4: brothers were They were smart to realize the rise of Walmart.

790
00:38:38,640 --> 00:38:41,799
Speaker 4: Of Walmart wants one company to do four berries year round.

791
00:38:42,160 --> 00:38:44,800
Speaker 4: So what they start doing is so most berries, berries

792
00:38:44,840 --> 00:38:47,880
Speaker 4: are Strawberries are really fickle. Historically a lot of them

793
00:38:47,920 --> 00:38:49,320
Speaker 4: are grown on the California.

794
00:38:48,960 --> 00:38:50,960
Speaker 2: Coast, So they grow them on the coast, and they

795
00:38:51,000 --> 00:38:53,920
Speaker 2: realize that it's more efficient to have that sort of

796
00:38:53,960 --> 00:38:54,760
Speaker 2: outsourced labor.

797
00:38:54,880 --> 00:38:57,680
Speaker 4: Right outsourced labor, Well, you have the cost of housing

798
00:38:57,719 --> 00:39:01,319
Speaker 4: increasing in California. That's a very short growing window on

799
00:39:01,360 --> 00:39:03,520
Speaker 4: the coast. Historically it would move up that I cannot

800
00:39:03,520 --> 00:39:04,920
Speaker 4: remember if it moves up or down the coast, but

801
00:39:04,920 --> 00:39:07,120
Speaker 4: it would. The production region was shifted from city to

802
00:39:07,160 --> 00:39:10,759
Speaker 4: city for the berries. Well, they started moving production to

803
00:39:10,880 --> 00:39:14,680
Speaker 4: like Morocco, to Baja California, to the point now where

804
00:39:14,719 --> 00:39:18,640
Speaker 4: Driscoals grows berries on every single continent except Antarctica. But

805
00:39:18,680 --> 00:39:21,359
Speaker 4: part of it is by moving off short there's less

806
00:39:21,400 --> 00:39:24,960
Speaker 4: labor standards, there's less environmental standards. I spent a lot

807
00:39:25,000 --> 00:39:26,359
Speaker 4: of time in the book talking about how a lot

808
00:39:26,360 --> 00:39:28,840
Speaker 4: of berry production is in Baja California, in a region

809
00:39:28,920 --> 00:39:31,640
Speaker 4: that is just as dry as Death Valley. They drained

810
00:39:31,640 --> 00:39:34,399
Speaker 4: the aquifers, they and then they build a decalization plan

811
00:39:34,440 --> 00:39:37,040
Speaker 4: on the ocean. A lot of these are indigenous workers,

812
00:39:37,920 --> 00:39:40,880
Speaker 4: and no one really knows what goes on in these places.

813
00:39:40,880 --> 00:39:42,960
Speaker 4: I mean, there's these you see stories here and there

814
00:39:43,560 --> 00:39:45,480
Speaker 4: enough where it's like the tip of an iceberg where

815
00:39:45,480 --> 00:39:47,160
Speaker 4: you see like I mean, there's a story in Reuters

816
00:39:47,160 --> 00:39:49,560
Speaker 4: a few years ago how the gangs in Mexico gone

817
00:39:49,560 --> 00:39:52,200
Speaker 4: to avocados. You just don't know what's going on when

818
00:39:52,200 --> 00:39:53,399
Speaker 4: these supply chains get that long.

819
00:39:53,719 --> 00:39:58,400
Speaker 2: This is part of the bitcoin avocado correlation conspiracy that

820
00:39:58,600 --> 00:40:02,120
Speaker 2: the reason that correlation exist or used to exist because

821
00:40:02,120 --> 00:40:06,520
Speaker 2: it's broken down, has something to do with financing Mexican mafia.

822
00:40:06,719 --> 00:40:09,799
Speaker 3: I just have one last question. But since you brought

823
00:40:09,880 --> 00:40:13,120
Speaker 3: up Walmart, and of course for years and even still,

824
00:40:13,200 --> 00:40:15,960
Speaker 3: but for years, the sort of grocery store system in

825
00:40:16,000 --> 00:40:18,759
Speaker 3: the US was famously fragmented. There really weren't any sort

826
00:40:18,800 --> 00:40:23,919
Speaker 3: of dominant national chains. There were, you know, regional chains obviously,

827
00:40:24,360 --> 00:40:27,839
Speaker 3: just sort of big picture like, what is the existence

828
00:40:27,880 --> 00:40:33,640
Speaker 3: of this dominant nationwide grocery store, biggest grocery store company

829
00:40:33,680 --> 00:40:36,560
Speaker 3: in America? What are the ripple effects in terms of

830
00:40:37,120 --> 00:40:39,680
Speaker 3: you know, you mentioned berries, but in terms of creating

831
00:40:39,760 --> 00:40:43,439
Speaker 3: concentration of power elsewhere across the food supply chain from

832
00:40:43,440 --> 00:40:45,720
Speaker 3: the existence of this one powerful and seller.

833
00:40:46,520 --> 00:40:49,919
Speaker 4: Oh, the Walmart chapter, that might be my favorite chapter

834
00:40:49,960 --> 00:40:51,960
Speaker 4: of the book. It's twice as long as any other chapter.

835
00:40:52,040 --> 00:40:53,640
Speaker 4: I mean, I also just love grocery stores. Let me

836
00:40:53,680 --> 00:40:56,320
Speaker 4: start there, okay, but I also never thought of Walmart

837
00:40:56,320 --> 00:40:58,520
Speaker 4: as a grocery store when I started this book, even

838
00:40:58,560 --> 00:41:01,239
Speaker 4: though sixty percent of its sales grocery. I love this

839
00:41:01,239 --> 00:41:04,200
Speaker 4: little anecdote where Sam Walng got the idea from Walmart

840
00:41:04,200 --> 00:41:06,000
Speaker 4: from a French company car for if it have been

841
00:41:06,040 --> 00:41:08,120
Speaker 4: to Europe, you see these car wars everywhere he saw

842
00:41:08,160 --> 00:41:10,640
Speaker 4: on vacations, like I'm gonna copy that because it gets

843
00:41:10,640 --> 00:41:12,279
Speaker 4: you in the story. You need grocery to every few

844
00:41:12,360 --> 00:41:16,560
Speaker 4: days Walmart. At the same time Walmart's starting to rise,

845
00:41:16,920 --> 00:41:20,120
Speaker 4: you see this whole framework Robertson Patman at collapse, These

846
00:41:20,280 --> 00:41:24,720
Speaker 4: basically competition protections in the system between suppliers and vendors

847
00:41:24,719 --> 00:41:28,560
Speaker 4: like Walmart. And so as Walmart's market power gets bigger,

848
00:41:28,960 --> 00:41:31,200
Speaker 4: it's able to basically squeeze its supplier more and more.

849
00:41:31,400 --> 00:41:35,640
Speaker 4: And to me, this little nugget I found. I love

850
00:41:35,719 --> 00:41:38,840
Speaker 4: reading trade press and like these little regional business publications.

851
00:41:38,880 --> 00:41:41,520
Speaker 4: You find the best nuggets. In Northwest Arkansas, there's a

852
00:41:41,520 --> 00:41:43,759
Speaker 4: business publication I spend a lot of time with and

853
00:41:43,800 --> 00:41:46,840
Speaker 4: they report how Walmart has a rule with its vendors

854
00:41:47,080 --> 00:41:49,480
Speaker 4: then you cannot get more than thirty percent of your

855
00:41:49,520 --> 00:41:52,239
Speaker 4: sales from Walmart, which I didn't understand at first. I

856
00:41:52,239 --> 00:41:54,280
Speaker 4: had to ask around to the people in the grocery industry,

857
00:41:54,280 --> 00:41:56,840
Speaker 4: why do they have that rule? And that's a supply

858
00:41:56,920 --> 00:41:59,960
Speaker 4: chain risk management rule. Walmart knows is such a vult

859
00:42:00,120 --> 00:42:02,680
Speaker 4: sure that it puts it more than thirty percent of

860
00:42:02,719 --> 00:42:04,920
Speaker 4: your market. You know, sales come from Walmart. You're putting

861
00:42:04,920 --> 00:42:07,240
Speaker 4: the company in the you know, into a fragile space

862
00:42:08,000 --> 00:42:10,200
Speaker 4: at the same time too, So that really puts a

863
00:42:10,239 --> 00:42:12,360
Speaker 4: lot of power in Walmart's hands. I kind of compare

864
00:42:12,360 --> 00:42:15,279
Speaker 4: it to like supply and command. My husband rejected this idea,

865
00:42:15,320 --> 00:42:16,720
Speaker 4: but I really want to kind of frame this around

866
00:42:16,719 --> 00:42:18,120
Speaker 4: like the closest thing we've ever had to like an

867
00:42:18,120 --> 00:42:20,640
Speaker 4: American Paula Burero, He's gonna laugh when he hears that.

868
00:42:20,880 --> 00:42:23,839
Speaker 4: But the Walmart family, their power is just I mean,

869
00:42:24,000 --> 00:42:27,600
Speaker 4: they're the richest family in the world. And this whole

870
00:42:27,680 --> 00:42:30,080
Speaker 4: chapter's framed around Walmart and Amazon had been in this

871
00:42:30,160 --> 00:42:32,799
Speaker 4: epic battle centered in grocery the last few years, and

872
00:42:32,840 --> 00:42:35,279
Speaker 4: I kind of came away thinking Walmart's winning, and think

873
00:42:35,320 --> 00:42:37,280
Speaker 4: about the Walmart To keep in mind is Jeff Bezos

874
00:42:37,320 --> 00:42:40,240
Speaker 4: only owns like ten percent of Amazon. The Walmart family

875
00:42:40,280 --> 00:42:42,520
Speaker 4: owns majority of Walmart. I mean, they've been selling some

876
00:42:42,520 --> 00:42:44,880
Speaker 4: shares lately. I think it dipped finally below fifty percent.

877
00:42:45,280 --> 00:42:49,160
Speaker 4: But Walmart's goal is like, when Walmart comes to town,

878
00:42:49,160 --> 00:42:51,080
Speaker 4: you don't buy more milk, you just shift your production.

879
00:42:51,239 --> 00:42:53,960
Speaker 4: So Walmart has this gold basically capture every dollar of

880
00:42:54,000 --> 00:42:56,680
Speaker 4: America is under class. You know, they're putting these banks

881
00:42:56,680 --> 00:42:59,840
Speaker 4: inside Walmart's, They're putting these healthcare clinics inside Walmart's. But

882
00:43:00,000 --> 00:43:03,000
Speaker 4: they're also making vertical plays into the food system. They

883
00:43:03,080 --> 00:43:04,839
Speaker 4: just announced two weeks ago that they're building their third

884
00:43:04,880 --> 00:43:08,160
Speaker 4: dairy plant in Texas. They're making a big beef operation

885
00:43:08,520 --> 00:43:11,840
Speaker 4: in the plains. And from my conversations with people is

886
00:43:12,560 --> 00:43:15,480
Speaker 4: Walmart was so kind of fed up with being gouged

887
00:43:15,480 --> 00:43:19,120
Speaker 4: by the other barons that it made these is making

888
00:43:19,120 --> 00:43:20,680
Speaker 4: these vertical plays, so it has an insight in the

889
00:43:20,680 --> 00:43:23,320
Speaker 4: cough structure. So that way when it bargains with companies

890
00:43:23,360 --> 00:43:26,440
Speaker 4: and knows like no, no, no, don't don't toy us around.

891
00:43:27,200 --> 00:43:30,360
Speaker 2: Yeah, tired of barons, so it became a baron and

892
00:43:30,680 --> 00:43:34,319
Speaker 2: baron Joe, you and I went to Bentonville in Arkansas,

893
00:43:34,520 --> 00:43:38,400
Speaker 2: and you definitely get a sense of Walmart's power in

894
00:43:38,440 --> 00:43:43,279
Speaker 2: that particular town. Austin, that was so interesting and fascinating.

895
00:43:43,400 --> 00:43:46,000
Speaker 2: Thank you so much for coming on all lots and

896
00:43:46,200 --> 00:43:51,680
Speaker 2: listing your barons behind America's agricultural concentration. Thank you so much,

897
00:43:51,920 --> 00:43:52,919
Speaker 2: Thank you for having me on.

898
00:44:05,440 --> 00:44:05,600
Speaker 4: Jo.

899
00:44:05,920 --> 00:44:07,880
Speaker 2: I want to ask if you enjoyed that conversation, but

900
00:44:07,920 --> 00:44:11,160
Speaker 2: that doesn't seem like the right question. Let me ask,

901
00:44:11,280 --> 00:44:13,319
Speaker 2: are you as are you going to be walking into

902
00:44:13,320 --> 00:44:17,640
Speaker 2: grocery stores muttering about antitrust and concentration and the illusion

903
00:44:17,640 --> 00:44:19,040
Speaker 2: of choice like I am Now.

904
00:44:19,520 --> 00:44:22,239
Speaker 3: Maybe I think probably to some extent, I'm definitely going

905
00:44:22,320 --> 00:44:22,840
Speaker 3: to pay more.

906
00:44:22,840 --> 00:44:25,360
Speaker 2: You're gonna be dancing down the aisles going this steak

907
00:44:25,440 --> 00:44:26,120
Speaker 2: is on sale.

908
00:44:26,280 --> 00:44:30,680
Speaker 3: Well, so my takeaway from this conversation is that a

909
00:44:30,719 --> 00:44:34,680
Speaker 3: lot of it is really about values. We can have

910
00:44:34,719 --> 00:44:40,959
Speaker 3: a calorically abundant, hyper efficient food supply chain where maybe

911
00:44:40,960 --> 00:44:42,880
Speaker 3: it's not the best tasting meat, but a lot of

912
00:44:42,920 --> 00:44:46,560
Speaker 3: people can afford steak and hamburger meat and even fresh

913
00:44:46,600 --> 00:44:48,360
Speaker 3: berries on a way that may not have been the

914
00:44:48,400 --> 00:44:52,120
Speaker 3: case twenty thirty or forty years ago. But there are

915
00:44:52,200 --> 00:44:55,520
Speaker 3: clearly environmental externalities. Someone is going to pay the cost,

916
00:44:55,800 --> 00:44:59,239
Speaker 3: and there are big structural changes to society in the

917
00:44:59,280 --> 00:45:02,040
Speaker 3: sense that do we want a handful of companies, say

918
00:45:02,120 --> 00:45:06,000
Speaker 3: owning a huge swath of the land in Iowa or

919
00:45:06,040 --> 00:45:10,840
Speaker 3: Michigan or elsewhere, Like, these are pretty legitimate debates to

920
00:45:10,920 --> 00:45:14,239
Speaker 3: be having, and what is the optimal trade off and

921
00:45:14,719 --> 00:45:18,040
Speaker 3: what is the optimal mix. So I do think there

922
00:45:18,080 --> 00:45:20,600
Speaker 3: is a lot of fertile ground for figuring out, like, well,

923
00:45:20,600 --> 00:45:22,319
Speaker 3: where do we want to like calibrate that dial.

924
00:45:22,560 --> 00:45:25,880
Speaker 2: I think that's a totally fair way of putting it. Absolutely,

925
00:45:25,880 --> 00:45:28,560
Speaker 2: it's a value judgment about what kind of system you

926
00:45:28,760 --> 00:45:31,239
Speaker 2: want to see. I do think there is a tendency,

927
00:45:31,520 --> 00:45:33,879
Speaker 2: not just with agriculture, but we talk about this all

928
00:45:33,920 --> 00:45:36,400
Speaker 2: the time in finance, this idea that you kind of

929
00:45:36,440 --> 00:45:40,240
Speaker 2: think certain things are inevitable, like the existence of money

930
00:45:40,239 --> 00:45:43,160
Speaker 2: markets or euro dollars, that those kind of just happened,

931
00:45:43,160 --> 00:45:46,239
Speaker 2: but of course they were the product of conscious decisions

932
00:45:46,280 --> 00:45:49,840
Speaker 2: and there were reasons to do them. Same thing with agriculture.

933
00:45:49,960 --> 00:45:52,799
Speaker 2: Something like the farm bill might have made sense when

934
00:45:52,880 --> 00:45:55,480
Speaker 2: it was first proposed, maybe it doesn't make as much

935
00:45:55,480 --> 00:45:58,279
Speaker 2: sense now. One thing I think about now, though, is

936
00:45:58,480 --> 00:46:01,480
Speaker 2: I guess the experience of the past few years of inflation,

937
00:46:01,760 --> 00:46:05,480
Speaker 2: so much of which was in food prices, and I

938
00:46:05,520 --> 00:46:07,720
Speaker 2: can kind of see, on the one hand, okay, maybe

939
00:46:07,760 --> 00:46:12,160
Speaker 2: that leads us to reevaluate things like antitrust, So maybe

940
00:46:12,160 --> 00:46:14,680
Speaker 2: people start to wake up to the idea that, oh, well,

941
00:46:14,960 --> 00:46:18,480
Speaker 2: companies are pushing through price increases because there's not as

942
00:46:18,560 --> 00:46:21,680
Speaker 2: much competition as there used to be. On the other hand,

943
00:46:22,160 --> 00:46:24,319
Speaker 2: if we want to get really cynical about it, it

944
00:46:24,360 --> 00:46:28,520
Speaker 2: seems like people just really hate high food price, yes,

945
00:46:28,719 --> 00:46:31,000
Speaker 2: and so you could also see people going like, well,

946
00:46:31,120 --> 00:46:33,880
Speaker 2: we want to make those prices even lower, So let's

947
00:46:33,880 --> 00:46:39,000
Speaker 2: have more efficiencies, let's have bigger supermarkets, let's do less

948
00:46:39,120 --> 00:46:43,160
Speaker 2: environmental protection because that's expensive. So it feels like it

949
00:46:43,160 --> 00:46:44,800
Speaker 2: could go either way totally.

950
00:46:44,840 --> 00:46:47,920
Speaker 3: And you know, you mentioned, you know, or in the

951
00:46:48,000 --> 00:46:51,359
Speaker 3: early part of the conversation, this gap between you know,

952
00:46:51,480 --> 00:46:55,560
Speaker 3: fresh foods and fresh vegetables versus processed foods, and you know,

953
00:46:55,719 --> 00:46:58,640
Speaker 3: on some level, it's not surprising, right Historically, I mean,

954
00:46:58,680 --> 00:47:01,279
Speaker 3: if you went back a long time, there were like

955
00:47:01,440 --> 00:47:04,560
Speaker 3: mass famines and food would cost infinite amount because the

956
00:47:04,600 --> 00:47:07,560
Speaker 3: food did not exist. And so to some extent, we've

957
00:47:08,000 --> 00:47:12,759
Speaker 3: reduced that volatility in the price of food by essentially

958
00:47:12,800 --> 00:47:17,120
Speaker 3: reducing the amount that the end product is actually directly

959
00:47:17,160 --> 00:47:19,960
Speaker 3: related to a food commodity at all. And so, you know,

960
00:47:20,040 --> 00:47:22,600
Speaker 3: if you think about a Fredo there's some amount of

961
00:47:22,600 --> 00:47:24,880
Speaker 3: corn in there, but mostly it's the process of an

962
00:47:24,920 --> 00:47:27,480
Speaker 3: industrial process. But you don't have these big, you know,

963
00:47:27,600 --> 00:47:29,680
Speaker 3: swings in the price of Freedo's the way you're going

964
00:47:29,760 --> 00:47:32,480
Speaker 3: to have in swings in the price of corn, because

965
00:47:32,520 --> 00:47:35,800
Speaker 3: it's the end product is only partially related to the commodity.

966
00:47:36,200 --> 00:47:38,279
Speaker 3: There are some nice things about that, right Like, that is.

967
00:47:38,239 --> 00:47:42,520
Speaker 2: The most impassioned defense of Freedo's I've ever heard. It

968
00:47:42,560 --> 00:47:44,040
Speaker 2: actually makes a lot of sense.

969
00:47:44,120 --> 00:47:46,879
Speaker 3: Right Like, it's like it's sort of like built in

970
00:47:46,920 --> 00:47:49,359
Speaker 3: a built in price. But I do think a lot

971
00:47:49,400 --> 00:47:51,279
Speaker 3: of these things, like I didn't want to, you know,

972
00:47:51,520 --> 00:47:53,960
Speaker 3: stay in the Midwest. I was never really like there

973
00:47:54,000 --> 00:47:56,640
Speaker 3: was no prospect of me ever, I don't think working

974
00:47:56,800 --> 00:47:59,719
Speaker 3: on my grandmother's farm. But I think a lot of

975
00:47:59,719 --> 00:48:03,360
Speaker 3: these like strike about like deep questions about our value,

976
00:48:03,400 --> 00:48:05,640
Speaker 3: the values at a society. And I do think it's

977
00:48:05,680 --> 00:48:08,840
Speaker 3: interesting that there is this sort of change, maybe a

978
00:48:08,840 --> 00:48:11,880
Speaker 3: foot in the politics of food that is sort of

979
00:48:11,920 --> 00:48:14,560
Speaker 3: maybe bipartisan or trampeological.

980
00:48:14,840 --> 00:48:17,360
Speaker 2: Well that's my big question, because you feel like a

981
00:48:17,400 --> 00:48:20,480
Speaker 2: lot of the environmental concerns, like depending on how you

982
00:48:20,600 --> 00:48:24,680
Speaker 2: couch them, could have bipartisan appeal. So you know, there

983
00:48:24,719 --> 00:48:27,880
Speaker 2: are a lot of people in Republican states that enjoy

984
00:48:28,000 --> 00:48:31,480
Speaker 2: going out to the great outdoors and presumably don't want

985
00:48:31,520 --> 00:48:34,440
Speaker 2: to see a manure lagoon when they do that, and

986
00:48:34,480 --> 00:48:37,960
Speaker 2: so you feel like it could have wider appeal, just

987
00:48:38,000 --> 00:48:41,640
Speaker 2: depending on how it's sort of presented. But Joe, you

988
00:48:41,640 --> 00:48:44,200
Speaker 2: should come visit my place in Connecticut. I've got I've

989
00:48:44,560 --> 00:48:45,120
Speaker 2: invited me.

990
00:48:45,680 --> 00:48:46,799
Speaker 3: You probably have I have.

991
00:48:47,080 --> 00:48:50,040
Speaker 2: It's just hard to get out there. I've got fruit trees, okay,

992
00:48:50,120 --> 00:48:53,799
Speaker 2: I've got raspberries great. I've got strawberries which we'll be

993
00:48:53,840 --> 00:48:57,120
Speaker 2: ready in June. And uh, I'm planning blueberries right now.

994
00:48:57,640 --> 00:48:59,400
Speaker 3: Bring some in and I'll give it so I can

995
00:48:59,440 --> 00:49:01,040
Speaker 3: give them to my kids and save some money.

996
00:49:01,040 --> 00:49:03,000
Speaker 2: I brought you tomatoes last year, but I'll bring us

997
00:49:03,040 --> 00:49:05,560
Speaker 2: stropperlicious here. All right? Shall we leave it there?

998
00:49:05,640 --> 00:49:06,440
Speaker 4: Let's leave it there.

999
00:49:06,680 --> 00:49:09,719
Speaker 2: This has been another episode of the Odlots podcast. I'm

1000
00:49:09,719 --> 00:49:12,760
Speaker 2: Tracy Alloway. You can follow me at Tracy Alloway.

1001
00:49:12,480 --> 00:49:15,120
Speaker 3: And I'm Jill Wisenthal. You can follow me at the Stalwart.

1002
00:49:15,440 --> 00:49:19,200
Speaker 3: Follow our guest Austin Ferrik. He's at Austin Frerek. Follow

1003
00:49:19,239 --> 00:49:22,560
Speaker 3: our producers Carmen Rodriguez at Carman Arman dash El Bennett

1004
00:49:22,600 --> 00:49:25,680
Speaker 3: at Dashbot and Kelbrooks at Kelbrooks. Thank you to our

1005
00:49:25,719 --> 00:49:29,160
Speaker 3: producer Moses Ondem. For more Oddlogs content, go to Bloomberg

1006
00:49:29,200 --> 00:49:31,920
Speaker 3: dot com slash odlots where we have transcripts of blog

1007
00:49:31,960 --> 00:49:34,319
Speaker 3: and a newsletter and you can chat about all of

1008
00:49:34,360 --> 00:49:36,920
Speaker 3: these topics in the discord twenty four to seven with

1009
00:49:37,000 --> 00:49:40,880
Speaker 3: fellow listeners Discord dot gg slash od loots.

1010
00:49:41,760 --> 00:49:44,279
Speaker 2: And if you enjoy odlots, if you like it when

1011
00:49:44,320 --> 00:49:47,520
Speaker 2: we do deep dives into agriculture, then please leave us

1012
00:49:47,560 --> 00:49:51,120
Speaker 2: a positive review on your favorite platform. And remember, if

1013
00:49:51,120 --> 00:49:53,719
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1014
00:49:53,760 --> 00:49:56,800
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1015
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1016
00:50:00,239 --> 00:50:01,040
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