WEBVTT - The Mega Corporations That Control What Americans Eat 0:00:03.120 --> 0:00:18.760 Bloomberg Audio Studios, Podcasts, Radio News. 0:00:20.360 --> 0:00:23.599 Hello and welcome to another episode of the All Thoughts Podcast. 0:00:23.680 --> 0:00:26.520 I'm Tracy Alloway and I'm Joe. Wasn't thal Joe? You 0:00:26.520 --> 0:00:27.680 know what I'm excited about. 0:00:29.200 --> 0:00:31.240 This could go anywhere, so I'm not gonna guess, just 0:00:31.280 --> 0:00:31.560 tell me. 0:00:32.000 --> 0:00:35.279 So we're recording this on March nineteenth. It is the 0:00:35.320 --> 0:00:38.519 first official day of spring. Oh, and that means that 0:00:38.720 --> 0:00:41.880 soon it will be berry time, specifically strawberries. 0:00:42.680 --> 0:00:45.559 I think many parents are talking about these days. But 0:00:45.800 --> 0:00:48.680 the berry budget that parents. 0:00:48.720 --> 0:00:51.159 When you said that, I was like smart, people are 0:00:51.200 --> 0:00:53.240 talking about strawberry. 0:00:52.640 --> 0:00:55.920 Oh, seriously, Like many this is like a persistent gripe 0:00:56.040 --> 0:00:58.840 among parents, like how much we have to pay for 0:00:59.000 --> 0:01:05.520 our kids freshberry habit. Strawberries, blueberries, blackberries, raspberries. They're really 0:01:05.520 --> 0:01:07.440 expensive and kids just devour them. 0:01:07.680 --> 0:01:10.560 And kids these days are spoiled. When I was growing up, 0:01:10.680 --> 0:01:12.679 I had fruit roll ups, which I don't even think 0:01:12.720 --> 0:01:16.039 you could classify as a fruit product. And all these 0:01:16.080 --> 0:01:18.800 kids have organic, freshly grown blueberries. 0:01:19.600 --> 0:01:20.000 Crazy. 0:01:20.120 --> 0:01:21.520 So when I was a kid, like, yeah, we had 0:01:21.560 --> 0:01:24.760 like apples and in this summer we had stone fruits, 0:01:24.760 --> 0:01:27.480 you know, peaches and stuff and then like grapefruit, and 0:01:27.520 --> 0:01:28.000 that was it. 0:01:28.520 --> 0:01:32.000 So where do you buy your strawberries from or other berries? 0:01:32.360 --> 0:01:35.040 Actually, before I answer that question, I want to say 0:01:35.040 --> 0:01:38.480 one other thing about my childhood no that I may 0:01:38.520 --> 0:01:42.600 be relevant to this conversation, which is that my grandmother 0:01:43.160 --> 0:01:48.080 in Michigan, her husband, her second husband, she lived when 0:01:48.120 --> 0:01:50.840 I was growing up on a farm in Elegant, Michigan. 0:01:50.920 --> 0:01:53.320 It had dairy, it had cows and stuff, but I 0:01:53.400 --> 0:01:57.480 also had like all these orchards and stuff. They're peaches 0:01:57.680 --> 0:02:01.080 and cherries and apple and it was just like wonderful 0:02:01.080 --> 0:02:02.560 and we had a great time as kids, and we'd 0:02:02.560 --> 0:02:04.160 gone to the orchard, so I did actually have a 0:02:04.200 --> 0:02:06.160 lot of fresh fruit. And I haven't been there in 0:02:06.200 --> 0:02:09.480 many years. But my understanding, I believe that farm is 0:02:09.520 --> 0:02:13.440 gone and now it's just entirely like soy or some brand, 0:02:13.520 --> 0:02:15.920 like all of those orchards are gone and it's just 0:02:15.960 --> 0:02:18.840 like one sort of like efficient unicrop farm these days. 0:02:19.040 --> 0:02:23.920 It's a microcosm of America's agricultural evolution. All right, Wait, 0:02:23.960 --> 0:02:25.919 but you didn't answer the question where do you get 0:02:25.960 --> 0:02:28.160 your strawberries and blueberries and things from? 0:02:28.760 --> 0:02:32.799 I don't know, probably Trader Joe's usually I think, I 0:02:32.840 --> 0:02:35.320 don't know, Maybe I don't know, Yeah, probably usual, probably 0:02:35.360 --> 0:02:36.240 usually Trader Joe's. 0:02:36.280 --> 0:02:37.400 Can you remember the brand? 0:02:38.400 --> 0:02:41.079 It's that one. I don't remember the name, but it's 0:02:41.120 --> 0:02:42.200 that one very brand. 0:02:42.360 --> 0:02:45.600 It's almost one hundred percent certain to be DRIs Calls. 0:02:45.720 --> 0:02:49.679 Yeah, that's right, and I specifically associate them with strawberries. 0:02:49.720 --> 0:02:52.600 But yes, so I think if you go into almost 0:02:52.639 --> 0:02:55.799 any grocery store in America, you are likely to find 0:02:56.000 --> 0:02:59.480 DRIs Skulls berries of one sort or another. And the 0:02:59.600 --> 0:03:02.919 crazy thing about Driscolls is, for me, they're pretty much 0:03:02.960 --> 0:03:06.720 synonymous with berries. I think berries, you think Driscolls. There's 0:03:06.720 --> 0:03:10.000 a brand there. However, they don't actually grow any of 0:03:10.000 --> 0:03:10.760 their own berries. 0:03:11.360 --> 0:03:13.640 I did not know that. That's really interesting, and it 0:03:13.760 --> 0:03:17.000 really is weird that there's like a brand that's the 0:03:17.040 --> 0:03:19.760 berry brand. You say that, and it hadn't really clicked 0:03:19.760 --> 0:03:22.079 to me that there is like the berry company in America. 0:03:22.120 --> 0:03:24.400 But yeah, there's the berry company in America's Driscolls. 0:03:24.760 --> 0:03:28.200 All right, So, as excited as I am about berries 0:03:28.560 --> 0:03:32.560 this year, and in the interests of equalizing corporate America, 0:03:32.600 --> 0:03:35.640 I am growing my own berries supply in Connecticut. So 0:03:35.760 --> 0:03:39.920 I will achieve berries interests. That's right, But I think 0:03:39.920 --> 0:03:43.920 it's sort of emblematic of a few themes that have 0:03:44.040 --> 0:03:46.440 come up on the show in one way or another. 0:03:46.760 --> 0:03:51.720 Number one is the decisions that have gone into creating 0:03:51.880 --> 0:03:55.760 America's agricultural landscape as it exists today. So you just 0:03:55.880 --> 0:03:59.640 mentioned the farm in Michigan, Your old family farm used 0:03:59.640 --> 0:04:02.120 to have fruit orchard, used to grow a variety of 0:04:02.160 --> 0:04:06.480 different things, and now grows a single unicrop, probably soy 0:04:06.720 --> 0:04:10.080 or something like that. We've spoken about this at various 0:04:10.080 --> 0:04:13.360 times on the podcast, so it keeps coming up. The 0:04:13.480 --> 0:04:18.320 other big theme has to be antitrust and the concentration 0:04:18.640 --> 0:04:21.760 of power in a few specific areas. So how did 0:04:21.800 --> 0:04:26.920 it come to be that Driscolls dominates the berry market? 0:04:27.160 --> 0:04:28.480 We have to ask these questions. 0:04:28.880 --> 0:04:30.880 I can't wait to find out the answer because I 0:04:30.920 --> 0:04:33.680 really like up. Like I said, up until you sort 0:04:33.680 --> 0:04:36.839 of said that, it just had never occurred to me that, oh, yeah, 0:04:36.839 --> 0:04:39.719 there's just this one company that I associate with berries. 0:04:40.000 --> 0:04:42.839 You will never be able to escape Driscolls ever. Again. 0:04:43.000 --> 0:04:45.080 It will be in your mind every time you see 0:04:45.080 --> 0:04:47.240 a little plastic package of blueberries. 0:04:47.279 --> 0:04:49.039 Every time we go to the grocery, store and my 0:04:49.120 --> 0:04:50.919 kids want twenty dollars worth a freshberries. 0:04:51.000 --> 0:04:53.120 Actually, I should just say we do, in fact have 0:04:53.160 --> 0:04:56.080 the perfect guests to discuss all this today, and after 0:04:56.279 --> 0:05:00.560 reading their book, I have come away with a completely 0:05:00.839 --> 0:05:05.360 different idea of agriculture that I cannot unsee in many ways. 0:05:05.680 --> 0:05:07.800 And it's kind of depressing because I do walk into 0:05:07.800 --> 0:05:10.520 grocery stores now and I start muttering to myself about 0:05:10.560 --> 0:05:14.080 the illusion of choice and dairy Chekhov's and things like that. 0:05:14.200 --> 0:05:16.200 So I'm going to try to make everyone else more 0:05:16.279 --> 0:05:18.359 like me. You can't escape it. We're going to be 0:05:18.360 --> 0:05:21.200 speaking with Austin Frerick. He's the author of a new 0:05:21.200 --> 0:05:24.479 book it's coming out this month, Barns Money, Power and 0:05:24.520 --> 0:05:27.680 the Corruption of America's food industry. He's also an all 0:05:27.760 --> 0:05:31.960 round agricultural and antitrust expert and a fellow of the 0:05:31.960 --> 0:05:35.800 Thurman Arnold Project over at Yale University. So, Austin, thank 0:05:35.839 --> 0:05:37.640 you so much for coming on all thoughts. 0:05:37.360 --> 0:05:38.919 Thank you for having me on. This is such a 0:05:38.960 --> 0:05:41.200 professional hunter. My husband and I are big fans. We've 0:05:41.200 --> 0:05:43.000 been big fans since September episode. 0:05:43.160 --> 0:05:46.000 Oh, thank you. I appreciate that. Let me just say, 0:05:46.080 --> 0:05:48.760 to begin with now you've been so positive, I'm just 0:05:48.800 --> 0:05:52.799 going to reiterate what a depressing read this was. Why 0:05:52.800 --> 0:05:55.040 did you decide to write a book on this topic? 0:05:55.400 --> 0:05:57.719 Honestly, this whole book started in a bar conversation in 0:05:57.720 --> 0:06:00.880 De Moine, Iowa. It was twenty eighteen, and it was 0:06:00.920 --> 0:06:03.120 a big governor's race in the state of Iowa. And 0:06:03.360 --> 0:06:06.440 Iowa doesn't have campaign contributional limits for state level races, 0:06:06.839 --> 0:06:09.920 and this political operative over a cheap draft Beers was 0:06:09.960 --> 0:06:13.039 telling me how this hog farmer donate is the largest 0:06:13.080 --> 0:06:15.680 donor in Iowa, donated three hundred thousand dollars to the 0:06:15.720 --> 0:06:18.600 governor's reelection campaign. And he was also telling me how 0:06:18.600 --> 0:06:20.719 they have a private jet. They fly back and forth 0:06:20.760 --> 0:06:24.640 between the only gated community in suburban Des Moines to Naples, Florida, 0:06:24.839 --> 0:06:27.080 and supposedly on this jet where their words and pigs fly, 0:06:28.240 --> 0:06:30.120 which to me, in my head part of it was, oh, 0:06:30.120 --> 0:06:32.760 this is good copy. But also this is such a 0:06:32.760 --> 0:06:35.000 powerful symbol of what happened to Iowa. What is going 0:06:35.040 --> 0:06:37.240 on when the most politically powerful person in the state 0:06:37.360 --> 0:06:39.800 is hog Baron. So I originally wrote an article for 0:06:39.920 --> 0:06:43.080 Vox with my buddy Charlie and then after we published 0:06:43.080 --> 0:06:45.719 the articles telling this bigger story of how did power 0:06:45.720 --> 0:06:49.680 consolidate in the hog industry in my lifetime, I realized, oh, 0:06:49.680 --> 0:06:51.640 this story can be repeated through the food system. This 0:06:51.720 --> 0:06:55.480 isn't unique to hogs. And then also this Robert Baron framework, 0:06:55.520 --> 0:06:57.720 to me, is a fun narrative device to tell these bigger, 0:06:57.960 --> 0:06:59.160 structural type stories. 0:07:00.080 --> 0:07:02.479 So I mentioned in the intro that I had this 0:07:02.640 --> 0:07:07.160 idyllic childhood of like running through the farm that my 0:07:07.160 --> 0:07:11.640 grandmother was living on and picking cherries and eating them 0:07:11.720 --> 0:07:14.640 right off the tree. And there were tart cherries and 0:07:14.760 --> 0:07:18.560 red cherries and the golden ones that are multicolored that 0:07:18.640 --> 0:07:22.000 were my favorite. And now that farm is gone and 0:07:22.040 --> 0:07:24.080 it's just probably like one crop as far as the 0:07:24.080 --> 0:07:26.720 eye could see. I take it that it was not 0:07:26.880 --> 0:07:29.320 just my grandmother's farm. No, I mean, this is the 0:07:29.360 --> 0:07:31.760 story of the American agricultural system. And what's to me 0:07:31.800 --> 0:07:33.480 the whole time, what I was thinking in my head 0:07:33.480 --> 0:07:35.360 when you're telling that story was I kept thinking of 0:07:35.400 --> 0:07:38.640 a retirement portfolio. M your grandma had a diversified portfolio, 0:07:38.760 --> 0:07:41.360 different crops going on at once. And what happens now 0:07:41.400 --> 0:07:43.600 is the system's incredibly fragile because most farms are only 0:07:43.640 --> 0:07:46.080 one or two crops. Can I just say something, Tracy 0:07:46.320 --> 0:07:51.720 is a personal regret. So my grandmother's husband, Jack, farmer Jack, 0:07:52.040 --> 0:07:55.200 if you were alive today, I would be so excited 0:07:55.320 --> 0:07:57.400 to talk to him, and I just think about, you know, 0:07:57.440 --> 0:08:00.600 ask him a million questions about like how does dairy work? 0:08:00.680 --> 0:08:03.240 And how do you get an agreement to get your 0:08:03.560 --> 0:08:05.160 He also made cider, how do you get your sight 0:08:05.240 --> 0:08:07.520 or on the shelves. It makes me very sad that, 0:08:07.600 --> 0:08:10.800 like when I was, you know, eleven, I didn't know 0:08:10.880 --> 0:08:12.520 that I would be interested in all these topics. I 0:08:12.640 --> 0:08:13.600 never really talked to him about. 0:08:13.760 --> 0:08:17.160 This is a very good reminder listeners to ask your 0:08:17.200 --> 0:08:19.840 relatives all the information that you want to hear about 0:08:19.920 --> 0:08:23.560 before it's too late. My aunt was quite senior at Countrywide, 0:08:24.240 --> 0:08:27.280 and she always promised to give me the inside scoop 0:08:27.360 --> 0:08:29.440 on what was going on pre two thousand and eight, 0:08:29.520 --> 0:08:33.520 and then she very sadly died early on of cancer. 0:08:33.640 --> 0:08:37.440 So yes, okay, we all have those regrets. Back to agriculture, 0:08:37.640 --> 0:08:42.880 that was a slight diversion. How concentrated is the US 0:08:42.960 --> 0:08:46.000 agricultural or food product landscape? 0:08:46.080 --> 0:08:46.240 Oh? 0:08:46.400 --> 0:08:48.719 To me it's one of the most concentrated spaces. It's 0:08:48.720 --> 0:08:50.720 a combination of a few things. I mean, you can't 0:08:50.720 --> 0:08:52.240 look at a hog market the same way with like 0:08:52.240 --> 0:08:53.920 a search engine, because you're not going to take a 0:08:53.920 --> 0:08:55.880 hog from Iowa and go butcher in North Carolina because 0:08:55.880 --> 0:08:58.600 of shipping cost. But you also have this whole dynamic 0:08:58.640 --> 0:09:01.120 of delusion of choice, like you mentioned earlier. I mentioned 0:09:01.160 --> 0:09:02.839 this briefly in my book, But there's like a peanut 0:09:02.880 --> 0:09:07.200 butter monopoly. Essentially one company has like roughly a fifty 0:09:07.360 --> 0:09:10.120 to sixty percent market share. But first of all, most 0:09:10.120 --> 0:09:12.720 consumers don't see that because they own different price points, 0:09:12.760 --> 0:09:14.880 because that rich consumer wants to think they're getting different 0:09:14.880 --> 0:09:17.440 peanut butter than the low income consumer. But on top 0:09:17.440 --> 0:09:19.440 of it, they tended to most store brands and you 0:09:19.520 --> 0:09:21.280 only find that out usually through recalls. 0:09:22.600 --> 0:09:27.760 So yes, okay, there's a highly concentrated food supply in America, 0:09:27.800 --> 0:09:30.920 and many aspects of the food industry in America are 0:09:31.160 --> 0:09:34.840 highly concentrated with a few dominant companies. And we'll get 0:09:34.840 --> 0:09:37.280 into like what some of these companies are and the 0:09:37.320 --> 0:09:40.600 distribution and the growing or the slaughtering, whether we're talking 0:09:40.600 --> 0:09:44.319 about meat on the other hand, outside of the inflation 0:09:44.480 --> 0:09:46.800 that's hit a lot of categories in the world over 0:09:46.840 --> 0:09:49.600 the last few years, we also live in a world 0:09:49.679 --> 0:09:52.800 of caloric abundance, and that seems pretty good and in 0:09:52.840 --> 0:09:55.680 the grand scheme of history, like meat is very cheap, 0:09:55.679 --> 0:09:58.079 and many people can afford burgers, and many people can 0:09:58.120 --> 0:10:02.959 afford steak, and many people can afford fresh berries, which 0:10:03.160 --> 0:10:05.840 really we never had as a kid at all, or 0:10:05.920 --> 0:10:08.360 very rarely, like I don't remember my parents even, you know, 0:10:08.520 --> 0:10:11.200 buying berries. So could you make an argument It certainly 0:10:11.200 --> 0:10:13.640 seems to me like maybe there are some cost and 0:10:13.640 --> 0:10:15.840 concentration of power issues, but we're in an era of 0:10:15.840 --> 0:10:16.679 food abundance. 0:10:17.320 --> 0:10:20.240 So just a few things on that. The first is, actually, 0:10:20.280 --> 0:10:24.480 per capita, Americans spend more food than Italians, so we 0:10:24.520 --> 0:10:26.719 actually we pain more and more for our food. This 0:10:26.760 --> 0:10:29.640 is even before the inflation stuffy according to USDA data. 0:10:30.240 --> 0:10:32.319 But that's also come at the expensive workers. I mean, 0:10:32.360 --> 0:10:35.360 that is like the hidden undercurrent. Sure of you can 0:10:35.360 --> 0:10:37.320 get cheap berries year around, because you have twelve year 0:10:37.320 --> 0:10:39.920 olds picking berries for other twelve year olds in developing countries. 0:10:39.960 --> 0:10:43.640 I mean, there's been reporting how basically any produce that's 0:10:43.720 --> 0:10:46.280 labor intensive with these trade agreements in America has moved 0:10:46.320 --> 0:10:49.080 offshore and kind of like a T shirt, it's so 0:10:49.160 --> 0:10:51.600 hard for journalists, especially the state of American media, to 0:10:51.679 --> 0:10:54.760 go investigate that the plant these farms are basically modern 0:10:54.840 --> 0:10:58.079 day plantations. And I would also last point on that 0:10:58.200 --> 0:11:01.880 is the obesity crisis in America. That undercurrent is We've 0:11:01.880 --> 0:11:04.280 never in the history of mankind had the lower classes 0:11:04.320 --> 0:11:07.280 be the overweight classes. And that to me is because 0:11:07.320 --> 0:11:09.280 the way the food system is designed, and I really 0:11:09.280 --> 0:11:11.200 get at this, my grain baron is you have to 0:11:11.200 --> 0:11:14.080 have money to beat healthy in America now because the 0:11:14.080 --> 0:11:16.839 food system picks favorites right now will be heavily subsidized 0:11:17.080 --> 0:11:17.840 processed foods. 0:11:18.320 --> 0:11:20.679 Yeah, I can't remember. You actually had a stat in 0:11:20.720 --> 0:11:23.360 your book specifically about this, and it was the price 0:11:23.640 --> 0:11:26.920 of fresh fruits and vegetables has gone up a certain 0:11:26.960 --> 0:11:30.560 amount since I think it was from nineteen eighty, whereas 0:11:30.840 --> 0:11:34.720 the price of processed foods has gone down quite a lot. 0:11:34.840 --> 0:11:37.240 So each baron's really built around an idea. And to me, 0:11:37.360 --> 0:11:39.920 my grain baron, which is Cargill, is about the farm bill. 0:11:40.360 --> 0:11:42.600 And to me, what I realize is, oh, this whole 0:11:42.600 --> 0:11:45.600 structure is designed to overproduce grains at the expense of 0:11:45.600 --> 0:11:48.880 everything else, and so in the constants it's crowding out everything. 0:11:48.960 --> 0:11:51.640 So like your family farm is, it's cheaper for people 0:11:51.640 --> 0:11:54.200 to plow up the orchards and put in corn than 0:11:54.240 --> 0:11:55.360 it does actually grow produce. 0:11:55.640 --> 0:11:57.640 What do you walk us through this specific You hear 0:11:57.679 --> 0:12:00.840 people vilify the farm bill a lot. What do you 0:12:00.880 --> 0:12:03.360 walker through some of the specifics of like what are 0:12:03.480 --> 0:12:06.480 the sort of policy underpinnings of the farm bill and 0:12:06.520 --> 0:12:06.920 what it does? 0:12:07.000 --> 0:12:09.480 Oh man, Joe, this honestly, this reminds me of the 0:12:09.520 --> 0:12:12.640 tax code. The farm bill has all these interlocking parts. Okay, 0:12:12.679 --> 0:12:14.520 that took me a while. They really get my head around. 0:12:14.880 --> 0:12:16.640 So to start off with, the farm bill comes from 0:12:16.679 --> 0:12:18.720 the New Deal, and that's from the dust bowl. These 0:12:18.760 --> 0:12:23.160 markets are over supplied and you had massive environmental damage 0:12:23.160 --> 0:12:26.520 because of people are pushing their land, engaging really destructive practices. 0:12:26.880 --> 0:12:30.080 So this New Deal farmwork was really centered in supply management, 0:12:30.160 --> 0:12:33.240 is what they call it. Sure, you can get subsidies, 0:12:33.320 --> 0:12:35.880 but you have to take land out of production. Most 0:12:35.920 --> 0:12:38.880 famously created all these reserves, grain reserves, cheese reserves, what 0:12:38.920 --> 0:12:40.599 have you. The government is trying to figure out the 0:12:40.600 --> 0:12:44.280 sweet spot for agriculture for production. What you slowly see happen, 0:12:44.440 --> 0:12:47.320 especially in the nineteen a's on is that framework kind 0:12:47.360 --> 0:12:51.760 of collapses to you're heavily subsidizing overproducing things. And it's 0:12:51.840 --> 0:12:53.480 kind of done three different ways. Think of it like 0:12:53.480 --> 0:12:56.720 a three legged stool. It's crop insurance, which like sixty 0:12:56.760 --> 0:12:59.000 percent of the premiums on crop insurance is subsidized by 0:12:59.000 --> 0:13:02.240 the government. You have the commodity programs, which it used 0:13:02.240 --> 0:13:04.040 to be to get a check like a subsidy check. 0:13:04.240 --> 0:13:06.079 Now it's kind of done through like a loan forgiveness. 0:13:06.400 --> 0:13:09.120 And then you also have the conservation programs. To me, 0:13:09.240 --> 0:13:10.880 like the grains are the big ones here, and then 0:13:10.880 --> 0:13:12.880 also like the caps have been raised, and also like 0:13:12.920 --> 0:13:14.800 even in crop insurance there's no cap and how much 0:13:14.800 --> 0:13:17.240 crop insurance you can get. So it's really pushing you 0:13:17.320 --> 0:13:18.959 to do this kind of model up production. 0:13:19.559 --> 0:13:22.680 So talk about how that model of production, in those 0:13:22.720 --> 0:13:25.800 decisions that were made through things like the Farm Bill, 0:13:26.240 --> 0:13:30.640 how that led to dominance in particular in the grain industry. 0:13:30.679 --> 0:13:32.880 And I think your example in the book was Cargil. 0:13:33.000 --> 0:13:36.760 Yeah, Cargil to me is a fascinating company. I did 0:13:36.800 --> 0:13:39.240 not originally include this when I started mapping out this book. 0:13:39.720 --> 0:13:41.880 It's the largest private company in America. They're bigger than 0:13:41.920 --> 0:13:42.560 the Koch brothers. 0:13:42.640 --> 0:13:43.240 It's amazing. 0:13:43.520 --> 0:13:45.280 Yeah, they do, like a think in my I think 0:13:45.280 --> 0:13:48.160 I one fourth of the world's grade trade. They're the 0:13:48.160 --> 0:13:50.200 middleman though, like I compare them my book to the 0:13:50.240 --> 0:13:52.960 closest thing we have in modern to modern day standard oil. 0:13:53.600 --> 0:13:55.520 But even at the end of that chapter, to me, 0:13:55.520 --> 0:13:57.800 they're more like the nineteenth century British Empire because the 0:13:57.840 --> 0:14:01.280 sun never sets on the grain Empire. So the original 0:14:01.320 --> 0:14:03.400 farm Bill actually to pay for it was a tax 0:14:03.440 --> 0:14:06.280 on processors companies like Cargill. So the family hated the 0:14:06.280 --> 0:14:08.600 original farm Bill. They fought it. They didn't like FDR 0:14:09.200 --> 0:14:11.319 because what the farm bill is doing the original one 0:14:11.360 --> 0:14:14.600 is limiting production. To me, it's politically brilliant to study 0:14:15.120 --> 0:14:17.800 because they use middleman. They don't usually engage in their 0:14:17.840 --> 0:14:20.480 political lobbying straight up. They give money to other groups 0:14:20.480 --> 0:14:23.280 to do their bidding. But you kind of uncovering the 0:14:23.320 --> 0:14:26.520 research is, Oh, they want to remove this because they 0:14:26.560 --> 0:14:28.120 just want to keep They just want tons of grain. 0:14:28.600 --> 0:14:31.480 And so what Cargill does has been doing slowly is 0:14:32.000 --> 0:14:35.200 buying up different parts of the supply chain, so you 0:14:35.200 --> 0:14:37.040 know they'll do like animal feed was a big part 0:14:37.080 --> 0:14:39.440 of Cargil, and then they got into meatpacking and then 0:14:39.520 --> 0:14:41.720 now that's just kind of their logic. 0:14:42.720 --> 0:14:46.560 So how does that actually feed into the antitrust discussion 0:14:46.800 --> 0:14:51.120 Because on the one hand, if a huge company like 0:14:51.360 --> 0:14:55.640 Cargill is buying up other businesses, you would expect regulators 0:14:55.680 --> 0:14:57.560 to be looking at that. But on the other hand, 0:14:57.560 --> 0:15:01.040 if Cargil is saying, well, we're not necessarily getting more 0:15:01.160 --> 0:15:05.160 grain producers, we're getting something that's adjacent to producing grain. 0:15:05.200 --> 0:15:08.440 We're doing grain transportation or storage or something like that, 0:15:08.720 --> 0:15:11.960 and there are synergies involved, and the American consumer is 0:15:12.000 --> 0:15:15.640 going to benefit through lower prices. How do those conversations 0:15:15.720 --> 0:15:16.840 or debates play out. 0:15:17.080 --> 0:15:19.840 Yeah, So, I mean I start with two fundamental notions 0:15:19.920 --> 0:15:23.320 of no company buys another company for pro competitive reasons. 0:15:23.480 --> 0:15:25.640 The goal of a corporate executive, and it's such a 0:15:25.640 --> 0:15:28.200 simple thing that I realized a few years ago, is monopoly. 0:15:28.960 --> 0:15:32.160 So you have that fundamental tension in markets where markets 0:15:32.240 --> 0:15:35.160 competitive markets are roofless, it's hard. Your goal is monopoly. 0:15:35.200 --> 0:15:37.920 So you're trying to get to a monopoly status. And 0:15:38.000 --> 0:15:40.120 so what you see with Cargill is they made a 0:15:40.160 --> 0:15:42.880 lot of these purchases thirty forty years ago before the 0:15:42.960 --> 0:15:45.120 Robert Bork anti trust framework took hold, that WO had 0:15:45.160 --> 0:15:47.440 not probably been approved. I can't remember off tom I head, 0:15:47.440 --> 0:15:49.320 but there's quite a few. I mentioned the book of 0:15:49.760 --> 0:15:51.080 large Acquisitions they made. 0:15:51.440 --> 0:15:54.120 You mentioned the magic word just then, which is Robert 0:15:54.200 --> 0:15:58.720 Bork and full disclosure. I had not realized what a 0:15:58.960 --> 0:16:02.480 influential figure Bork was in the world of anti trust. 0:16:02.600 --> 0:16:06.440 And I find it so interesting reading that chapter to 0:16:06.600 --> 0:16:11.200 compare and contrast the sort of Bork interpretation of anti 0:16:11.240 --> 0:16:15.880 trust versus what we think about today. And I'm trying 0:16:15.880 --> 0:16:19.200 to do this without mentioning hipster antitrust, but there is 0:16:19.320 --> 0:16:21.880 more of a I guess, a throwback today to the 0:16:21.920 --> 0:16:26.480 idea of, well, is this particular corporate action good for 0:16:26.800 --> 0:16:30.960 Americans in the sense of labor, not just prices? Whereas 0:16:31.000 --> 0:16:36.480 Bork basically argued that regulators and the courts should ignore 0:16:36.640 --> 0:16:41.480 harm to workers and focus purely on consumer prices. So 0:16:41.560 --> 0:16:47.440 the consumer welfare standard, which seems kind of nuts in retrospect. 0:16:47.360 --> 0:16:50.080 Yeah, I mean, what's so funny about that? Is number 0:16:50.080 --> 0:16:53.280 one kind of the undercurrent of this era are so 0:16:53.400 --> 0:16:55.400 much of the language it's designed to keep people out. 0:16:55.480 --> 0:16:58.400 These words don't really mean anything. So consumer Welfare Standard 0:16:58.840 --> 0:17:01.560 has like thirty different ductions by different people. Those words 0:17:01.600 --> 0:17:05.320 are really hollow, but they sound smart. Two, it tries 0:17:05.320 --> 0:17:07.600 to reduce this stuff to simple math equations when really 0:17:07.640 --> 0:17:09.640 like this is about power and who has it. These 0:17:09.640 --> 0:17:12.199 are moral questions that we're trying to mask with pseudo science. 0:17:12.760 --> 0:17:15.439 And for me personally, it was a coffee I had 0:17:15.440 --> 0:17:17.880 with Commissioner con back in twenty fifteen that really got 0:17:17.920 --> 0:17:20.159 me going on this. I was at the time a 0:17:20.200 --> 0:17:22.600 Treasury tax economist and I had written a paper on 0:17:22.640 --> 0:17:25.280 the growth of super rents, which is just like econ 0:17:25.359 --> 0:17:28.680 speak for monopoly level of profits into tax code. And 0:17:28.720 --> 0:17:30.199 I was like, huh, what's going on here? Why am 0:17:30.200 --> 0:17:32.440 I seeing a lot in agriculture, you know, anyone should 0:17:32.440 --> 0:17:35.440 able to make pop our chips. And read an article 0:17:35.480 --> 0:17:37.800 she wrote in like twenty twelve on like chicken monopolies. 0:17:38.000 --> 0:17:42.359 She was a journalist before she became a lawyer, and 0:17:42.520 --> 0:17:44.200 I was like, oh, this really explains what I see 0:17:44.240 --> 0:17:46.399 going on. Back in Iowa met with her and she 0:17:46.920 --> 0:17:48.480 kind of is the one who showed me, oh, there's 0:17:48.520 --> 0:17:51.800 this whole There's been this fierce intellectual debate in America 0:17:51.840 --> 0:17:54.639 over how we conceptualize power and kind of tell me 0:17:54.680 --> 0:17:57.840 that Bork history, And to me is, I mean, there's 0:17:57.880 --> 0:17:59.359 a lot of talk on big tech, but to me, 0:17:59.760 --> 0:18:04.480 the my book is really to like overlay that framework 0:18:04.520 --> 0:18:06.359 to agriculture in the food system. 0:18:07.200 --> 0:18:12.199 So I take your point about, Okay, a handful of 0:18:12.400 --> 0:18:15.920 extremely powerful companies have like come to have this dominant 0:18:15.920 --> 0:18:19.680 position within the agricultural system. On the other hand, it 0:18:19.800 --> 0:18:24.240 seems like this is a partly and you're applied, not 0:18:24.440 --> 0:18:27.280 unique to agriculture, which is just that we have seen 0:18:27.320 --> 0:18:29.960 the rise across many industries of like you know, megga 0:18:30.520 --> 0:18:33.360 behemoth global we used to call them like in the nineties, 0:18:33.359 --> 0:18:38.240 like multinational corporations. They're also like economies of scale are 0:18:38.440 --> 0:18:41.600 a real thing. I believe, you know, like how much 0:18:41.640 --> 0:18:44.400 of this is like a policy decision versus a sort 0:18:44.400 --> 0:18:48.320 of more like natural evolution of how many businesses have 0:18:48.560 --> 0:18:52.439 evolved of like companies figuring out scale and efficiencies. And 0:18:52.480 --> 0:18:56.359 I have to imagine that setting aside policy that whether 0:18:56.400 --> 0:19:00.360 we're talking about slaughtering hogs or whether we're talking about 0:19:00.600 --> 0:19:04.080 growing corn that you could save money and selled it 0:19:04.080 --> 0:19:06.199 at a cheaper price if you're a big company that 0:19:06.240 --> 0:19:07.800 has access to a lot of capacity. 0:19:08.080 --> 0:19:10.040 To me, it's a combination of both. I mean, the 0:19:10.119 --> 0:19:11.800 undercurrent of this book too is a lot of these 0:19:11.840 --> 0:19:15.200 companies got big not through organic growth, but through acquisitions 0:19:15.600 --> 0:19:17.720 that probably would not have been approved before. To me, 0:19:17.760 --> 0:19:20.560 the undercurrent two of this book is the whole negative 0:19:20.560 --> 0:19:23.760 externalities of this market power is just I mean, I 0:19:23.760 --> 0:19:26.480 think to me, as an Iowan, how I fell a 0:19:26.520 --> 0:19:28.840 part in my lifetime. It's the best farmland in the world. 0:19:28.920 --> 0:19:31.399 It should be the Italy of North America. Yet Iowa 0:19:31.400 --> 0:19:34.400 was now is basically an extraction colony. Like sixty seventy 0:19:34.440 --> 0:19:36.000 percent of the waterways highway you can't go into. 0:19:36.440 --> 0:19:40.880 This is because the hog runoff. To put it politely, Yeah, 0:19:41.040 --> 0:19:43.639 so Iowa has about twenty five million hawks. 0:19:44.680 --> 0:19:47.200 Hog defecates like three times more than a human being. 0:19:47.680 --> 0:19:50.119 So we're talking about the manure of the population of 0:19:50.160 --> 0:19:53.679