1 00:00:02,720 --> 00:00:16,360 Speaker 1: Bloomberg Audio Studios, Podcasts, radio News. 2 00:00:18,640 --> 00:00:21,560 Speaker 2: Hello and welcome to another episode of the All Thoughts podcast. 3 00:00:21,680 --> 00:00:23,000 Speaker 2: I'm Tracy Alloway. 4 00:00:22,720 --> 00:00:24,400 Speaker 3: And I'm Joe. Why isn't thal Joe? 5 00:00:24,640 --> 00:00:27,320 Speaker 2: What do you eat more of eggs or beef? 6 00:00:28,080 --> 00:00:28,280 Speaker 4: You know? 7 00:00:28,360 --> 00:00:30,560 Speaker 3: I was just thinking I want to eat more beef 8 00:00:30,600 --> 00:00:33,960 Speaker 3: in my life. I probably you eat more eggs ultimately, 9 00:00:34,680 --> 00:00:37,559 Speaker 3: but like, beef is just so good. Beef is the 10 00:00:37,600 --> 00:00:39,960 Speaker 3: best food there is in the entire world. I truly 11 00:00:40,360 --> 00:00:44,120 Speaker 3: believe that. And every time I eat beef, I think about, 12 00:00:44,200 --> 00:00:46,320 Speaker 3: why don't I eat this all the time. It's so good, 13 00:00:46,320 --> 00:00:48,960 Speaker 3: It's so satisfying and all these nutrients. I don't have 14 00:00:49,040 --> 00:00:52,080 Speaker 3: this impulse to snack and eat garbage afterwards. I want 15 00:00:52,120 --> 00:00:53,000 Speaker 3: to eat more beef. 16 00:00:53,360 --> 00:00:55,560 Speaker 2: I'm pretty sure I eat more beef than eggs at 17 00:00:55,560 --> 00:00:58,000 Speaker 2: this point. I will have the occasional omelet and I 18 00:00:58,120 --> 00:01:01,080 Speaker 2: mix a lot of eggs into like Asian noodle dishes 19 00:01:01,080 --> 00:01:02,960 Speaker 2: and things like that, but not. 20 00:01:03,040 --> 00:01:05,679 Speaker 3: That I aspire to live. They to have the Tracy 21 00:01:05,680 --> 00:01:06,400 Speaker 3: Alloy diet. 22 00:01:06,800 --> 00:01:11,160 Speaker 2: Okay, Well, speaking of beef except expensive these Yes, this 23 00:01:11,400 --> 00:01:14,480 Speaker 2: is exactly it. So I'm sure everyone listening to this 24 00:01:14,520 --> 00:01:17,720 Speaker 2: podcast at this point has heard about rising beef prices 25 00:01:18,000 --> 00:01:20,720 Speaker 2: in the US. There are a lot of headlines flying 26 00:01:20,920 --> 00:01:24,679 Speaker 2: around constantly in recent days about this. So, for instance, 27 00:01:25,080 --> 00:01:29,160 Speaker 2: we're recording this on October thirtieth, and earlier this week, 28 00:01:29,480 --> 00:01:32,760 Speaker 2: President Trump was tweeting about how he wants beef prices 29 00:01:32,800 --> 00:01:36,399 Speaker 2: to be lower. He's also been talking about buying beef 30 00:01:36,800 --> 00:01:40,440 Speaker 2: from Argentina. It is very much in the news. There's 31 00:01:40,440 --> 00:01:43,080 Speaker 2: also the whole soybean drama with China. 32 00:01:43,200 --> 00:01:45,360 Speaker 3: Yeah, there is a I think it's funny because in 33 00:01:45,400 --> 00:01:49,320 Speaker 3: that Trump post he said cattle rancher should appreciate how 34 00:01:49,320 --> 00:01:52,559 Speaker 3: good things are going because high beef prices, but bring 35 00:01:52,600 --> 00:01:55,600 Speaker 3: them down. There's just a lot, and I've said this 36 00:01:55,760 --> 00:01:59,320 Speaker 3: before on the show, which is that I think the 37 00:01:59,440 --> 00:02:02,680 Speaker 3: ultimate marker of civilization is the amount of beef or 38 00:02:02,720 --> 00:02:05,040 Speaker 3: protein that you can buy with an hour's work, that 39 00:02:05,080 --> 00:02:07,320 Speaker 3: the median person or the average person can buy with 40 00:02:07,360 --> 00:02:10,000 Speaker 3: an hour's work. And I think when it's going backwards, 41 00:02:10,000 --> 00:02:13,680 Speaker 3: we should be very disturbed. So setting aside, I'm very fortunate. 42 00:02:13,720 --> 00:02:15,400 Speaker 3: I could probably afford to these as much beef as 43 00:02:15,400 --> 00:02:17,520 Speaker 3: I want. But the price of ground beef, I'm looking 44 00:02:17,520 --> 00:02:19,839 Speaker 3: it up on the terminal now it's like tripled since 45 00:02:20,200 --> 00:02:23,360 Speaker 3: ten that there's like four dollars around the pandemic. Now 46 00:02:23,360 --> 00:02:26,240 Speaker 3: it's of over six dollars. I think these are extremely 47 00:02:26,360 --> 00:02:27,160 Speaker 3: serious issues. 48 00:02:27,440 --> 00:02:28,880 Speaker 2: I will say I don't think we need to be 49 00:02:29,040 --> 00:02:32,880 Speaker 2: quite as obsessed with protein Americans especially, we already eat 50 00:02:32,919 --> 00:02:34,880 Speaker 2: a lot of protein. Say eat more fiber. 51 00:02:35,160 --> 00:02:37,239 Speaker 3: I'm not saying we need to be obsessed. Actually, I 52 00:02:37,280 --> 00:02:39,120 Speaker 3: do think the protein craze may be a little out 53 00:02:39,120 --> 00:02:41,000 Speaker 3: of hand. I just think this is like a very 54 00:02:41,040 --> 00:02:44,359 Speaker 3: good measure of the advance of sort of a wealthy 55 00:02:44,480 --> 00:02:47,200 Speaker 3: society that protein gets more affordable. 56 00:02:47,560 --> 00:02:49,680 Speaker 2: I'm going to get you a cow share for Christmas. 57 00:02:49,840 --> 00:02:50,160 Speaker 4: Thank you? 58 00:02:50,400 --> 00:02:52,480 Speaker 2: All right, Well, I am happy to say we do, 59 00:02:52,560 --> 00:02:54,440 Speaker 2: in fact have the perfect guest. We're going to be 60 00:02:54,440 --> 00:02:57,160 Speaker 2: speaking with Bill Bullard. He is the CEO of our 61 00:02:57,280 --> 00:03:00,200 Speaker 2: calf USA. So Bill, thank you so much, Thanks for 62 00:03:00,200 --> 00:03:00,640 Speaker 2: coming on. 63 00:03:00,520 --> 00:03:02,480 Speaker 4: All thoughts, glad to be here. Thank you. 64 00:03:03,160 --> 00:03:05,960 Speaker 2: Thank you also for actually looking the part of a 65 00:03:06,000 --> 00:03:07,560 Speaker 2: cattle rancher. We really appreciate it. 66 00:03:07,639 --> 00:03:10,120 Speaker 3: No one can deny that we're talking to the perfect guest. 67 00:03:10,400 --> 00:03:13,560 Speaker 2: All right, So why don't we start really simple? What 68 00:03:13,720 --> 00:03:17,680 Speaker 2: have you observed about beef prices just in the past 69 00:03:18,000 --> 00:03:18,760 Speaker 2: few months or so. 70 00:03:19,639 --> 00:03:23,799 Speaker 4: Well, we've seen beef prices increasing as you've indicated, and 71 00:03:23,880 --> 00:03:28,320 Speaker 4: we see cattle pricing also increasing as you indicated. So 72 00:03:28,400 --> 00:03:31,600 Speaker 4: we now have a positive relationship between the price of 73 00:03:31,639 --> 00:03:33,880 Speaker 4: beef and the price of cattle, and we are a 74 00:03:33,919 --> 00:03:37,720 Speaker 4: competitive industry. We do not rely on government price supports. 75 00:03:37,800 --> 00:03:41,440 Speaker 4: Were the single largest segment of American agriculture. That cattle 76 00:03:41,520 --> 00:03:44,720 Speaker 4: industy generates about one hundred billion dollars a year in 77 00:03:44,760 --> 00:03:50,600 Speaker 4: cash receipts, so it's it's larger than any other commodity corn, wheat, cotton, dairy, 78 00:03:51,200 --> 00:03:54,720 Speaker 4: and we rely on competitive market forces. But we have 79 00:03:54,880 --> 00:03:59,480 Speaker 4: not had competitive market forces until very recently. And that's 80 00:03:59,680 --> 00:04:01,880 Speaker 4: where we need to get into the history of why 81 00:04:01,920 --> 00:04:03,000 Speaker 4: beef prices are high. 82 00:04:03,360 --> 00:04:05,360 Speaker 2: Can I ask very quickly, you said there's now a 83 00:04:05,400 --> 00:04:08,880 Speaker 2: positive relationship between cattle prices and beef prices. Is that 84 00:04:09,040 --> 00:04:10,280 Speaker 2: not always the case? 85 00:04:10,840 --> 00:04:14,760 Speaker 4: That certainly has not been the case, especially since twenty fifteen. 86 00:04:15,320 --> 00:04:19,480 Speaker 4: We saw an inverse relationship. We saw beef prices heading 87 00:04:19,560 --> 00:04:24,000 Speaker 4: skyward beginning in twenty and seventeen, and while beef prices 88 00:04:24,000 --> 00:04:27,880 Speaker 4: were increasing, cattle prices were falling. And this is really 89 00:04:27,920 --> 00:04:31,960 Speaker 4: odd in an industry where the only ingredient in beef 90 00:04:32,120 --> 00:04:35,680 Speaker 4: is cattle, so you would expect there to be a harmonious, 91 00:04:35,680 --> 00:04:40,719 Speaker 4: synchronous relationship, a positive relationship between beef prices and cattle prices. 92 00:04:41,160 --> 00:04:43,160 Speaker 3: One of the things I discovered on the terminal back 93 00:04:43,240 --> 00:04:45,560 Speaker 3: during the pandemic, I learned all these things. We actually 94 00:04:45,560 --> 00:04:49,599 Speaker 3: have an index on the terminal, the Hedger's edge beef 95 00:04:49,880 --> 00:04:54,719 Speaker 3: packer margin, which I imagine to some extent reflects that spread, 96 00:04:55,040 --> 00:04:58,560 Speaker 3: and we do see it rise generally up really through 97 00:04:58,600 --> 00:05:01,880 Speaker 3: twenty twenty one, actually started to compress quite a bit. 98 00:05:01,960 --> 00:05:05,360 Speaker 3: But just actually why is that? Like, what explains why 99 00:05:05,400 --> 00:05:07,960 Speaker 3: these things can move in different directions? What is the 100 00:05:08,040 --> 00:05:11,400 Speaker 3: added factor in the price of beef that is not 101 00:05:11,520 --> 00:05:12,360 Speaker 3: the price of cattle. 102 00:05:12,680 --> 00:05:15,120 Speaker 4: So let's go back to just over a generation. We'll 103 00:05:15,160 --> 00:05:17,599 Speaker 4: go back to nineteen eighty. Great at the time, we 104 00:05:17,640 --> 00:05:21,320 Speaker 4: had one point three million beef cattle farmers and ranchers 105 00:05:21,360 --> 00:05:24,240 Speaker 4: in the United States. We got about thirty seven million 106 00:05:24,360 --> 00:05:28,000 Speaker 4: cows in our mother cow herd. Beef Prices that consumers 107 00:05:28,040 --> 00:05:30,760 Speaker 4: paid were about two dollars and forty cents per pound. 108 00:05:31,320 --> 00:05:34,000 Speaker 4: At that time, we had the four largest packers in 109 00:05:34,040 --> 00:05:38,000 Speaker 4: the industry, controlling thirty six percent of the industry. So 110 00:05:38,360 --> 00:05:41,440 Speaker 4: if we think about how the beef industry works, it's 111 00:05:41,480 --> 00:05:45,120 Speaker 4: the consumer beef dollar that has to be allocated along 112 00:05:45,200 --> 00:05:48,720 Speaker 4: the entire supply chain. So back in nineteen eighty, every 113 00:05:48,720 --> 00:05:52,599 Speaker 4: time a consumer spent a dollar on beef, that dollar 114 00:05:52,760 --> 00:05:57,120 Speaker 4: was allocated by competitive market forces, and over sixty cents 115 00:05:57,120 --> 00:06:00,000 Speaker 4: of that dollar went back to the live cattle producer, 116 00:06:00,360 --> 00:06:03,719 Speaker 4: the farmer and rancher and the cattle feeder, and less 117 00:06:03,720 --> 00:06:06,800 Speaker 4: than forty cents went back to the processing part of 118 00:06:06,839 --> 00:06:10,200 Speaker 4: the beef industry, and that's to the retailer and the packer. 119 00:06:10,560 --> 00:06:14,320 Speaker 4: So the producer was receiving the majority shared which made 120 00:06:14,360 --> 00:06:18,040 Speaker 4: sense because they kept that animal for fifteen to eighteen 121 00:06:18,080 --> 00:06:21,120 Speaker 4: months before it was slaughtered and converted to beef, and 122 00:06:21,160 --> 00:06:23,720 Speaker 4: the beef packer only kept the animal for about seven 123 00:06:23,800 --> 00:06:26,760 Speaker 4: days and the retailer kept it for the shortest amount 124 00:06:26,760 --> 00:06:29,480 Speaker 4: of period possible. So but the point was is that 125 00:06:29,520 --> 00:06:32,120 Speaker 4: when consumers were paying two dollars and forty cents per 126 00:06:32,160 --> 00:06:35,320 Speaker 4: pound for beef, sixty cents of that dollar was going 127 00:06:35,360 --> 00:06:39,359 Speaker 4: back to the producer and only less than forty cents 128 00:06:39,400 --> 00:06:42,200 Speaker 4: was going back to the processor and the retailer. Now 129 00:06:42,360 --> 00:06:45,320 Speaker 4: jump ahead. Today, we've wiped out over half of all 130 00:06:45,400 --> 00:06:49,360 Speaker 4: the beef cattle operations in business. Just over a generation ago, 131 00:06:49,480 --> 00:06:52,520 Speaker 4: we've lost fifty two percent of them. We've wiped out 132 00:06:52,560 --> 00:06:56,080 Speaker 4: twenty five percent of our Mother Kyle beef herd, and 133 00:06:56,120 --> 00:07:00,760 Speaker 4: the four largest packers controlled today about eighty percent of 134 00:07:00,800 --> 00:07:05,080 Speaker 4: the marketplace. And consumers in twenty twenty four paid about 135 00:07:05,160 --> 00:07:07,839 Speaker 4: eight dollars in twenty three cents per pound for beef, 136 00:07:08,200 --> 00:07:10,800 Speaker 4: and now in twenty twenty one, just a couple of 137 00:07:10,840 --> 00:07:15,240 Speaker 4: years ago, the allocation that the competitive market was making 138 00:07:15,280 --> 00:07:18,400 Speaker 4: in the marketplace was completely tipped on its head. In 139 00:07:18,400 --> 00:07:22,320 Speaker 4: twenty twenty one, the packer and the retailer received over 140 00:07:22,480 --> 00:07:25,760 Speaker 4: sixty cents of every consumer beef dollar, and the producer 141 00:07:25,880 --> 00:07:30,400 Speaker 4: received less than forty cents. So here's the question, how 142 00:07:30,400 --> 00:07:33,840 Speaker 4: would a competitive market could that have happened? How could 143 00:07:33,840 --> 00:07:39,360 Speaker 4: a competitive forces in the marketplace completely reversed the competitive 144 00:07:39,360 --> 00:07:43,040 Speaker 4: allocation of the consumer beef dollar within the entire beef 145 00:07:43,080 --> 00:07:46,040 Speaker 4: supply chain. The answer to that question is it can't. 146 00:07:46,680 --> 00:07:50,280 Speaker 4: If our market was competitive, that could never have happened. 147 00:07:50,680 --> 00:07:54,480 Speaker 4: That raises the concerns that we've been struggling with for 148 00:07:54,520 --> 00:07:56,880 Speaker 4: the past several decades. Our industry is in a state 149 00:07:56,920 --> 00:07:59,960 Speaker 4: of crisis and it has been and what has happened 150 00:08:00,200 --> 00:08:05,280 Speaker 4: is is because of industry concentration and consolidation, the ability 151 00:08:05,320 --> 00:08:09,480 Speaker 4: of the multinational meat packers and retailers to exert buying 152 00:08:09,680 --> 00:08:13,080 Speaker 4: power upstream in the supply chain, and the fact that 153 00:08:13,120 --> 00:08:15,960 Speaker 4: we've entered free trade agreements that have allowed the meat 154 00:08:15,960 --> 00:08:20,000 Speaker 4: packers and retailers to access beef from around the world 155 00:08:20,440 --> 00:08:24,640 Speaker 4: and displace domestic production. Because the beef that we import 156 00:08:24,960 --> 00:08:30,800 Speaker 4: from Argentina, Brazil, Uruguay, Nicaragua, Costa Rica, Australia, New Zealand, 157 00:08:30,920 --> 00:08:34,720 Speaker 4: Canada and Mexico, it's a perfect substitute for domestic product. 158 00:08:35,120 --> 00:08:38,520 Speaker 4: So the more we import, the less we have the 159 00:08:38,559 --> 00:08:43,559 Speaker 4: ability and capacity to maintain domestic production of this very 160 00:08:43,559 --> 00:08:47,160 Speaker 4: important protein source, which is beef. And so what we 161 00:08:47,240 --> 00:08:51,440 Speaker 4: see today is a dysfunctional marketplace. As I described before, 162 00:08:51,800 --> 00:08:55,199 Speaker 4: since twenty seventeen, we saw beef prices going up that 163 00:08:55,320 --> 00:08:58,120 Speaker 4: consumers were paying in the retail store. We saw cattle 164 00:08:58,120 --> 00:09:01,920 Speaker 4: prices going down. SENSU shows that just in the five 165 00:09:02,000 --> 00:09:05,760 Speaker 4: year period from twenty seventeen to twenty twenty two, we 166 00:09:05,840 --> 00:09:09,880 Speaker 4: lost one hundred and six thousand beef cattle operations, farmers 167 00:09:09,880 --> 00:09:12,920 Speaker 4: and ranchers exited the industry during that period. And the 168 00:09:13,000 --> 00:09:16,160 Speaker 4: reason that that's happened is because they've suffered long term 169 00:09:16,320 --> 00:09:20,480 Speaker 4: lack of profitability. It's because their market is dysfunctional. It's 170 00:09:20,520 --> 00:09:25,040 Speaker 4: because imports have displaced our domestic production and our opportunity 171 00:09:25,120 --> 00:09:29,480 Speaker 4: to expand. And now we've hit a huge market shock, 172 00:09:29,520 --> 00:09:32,000 Speaker 4: an economic shock to the market, and that was the 173 00:09:32,120 --> 00:09:35,560 Speaker 4: latest drought that occurred in the latter part of twenty twenty. 174 00:09:35,720 --> 00:09:37,520 Speaker 2: This is what I was going to ask, so just 175 00:09:37,559 --> 00:09:40,960 Speaker 2: to we're going to talk more about industry consolidation, for sure, 176 00:09:41,080 --> 00:09:44,200 Speaker 2: and you know, I'm looking, for instance, at a headline 177 00:09:44,240 --> 00:09:47,480 Speaker 2: right now about Walmart tightening its grip on the beef 178 00:09:47,520 --> 00:09:50,560 Speaker 2: market by setting up a new plant. But just to 179 00:09:50,559 --> 00:09:53,840 Speaker 2: play devil's advocate for a second, how much of this 180 00:09:53,920 --> 00:09:58,400 Speaker 2: is just down to pure input costs like grain going up, 181 00:09:58,640 --> 00:10:01,679 Speaker 2: or you know, the drought that you just mentioned, or labor. 182 00:10:01,360 --> 00:10:03,679 Speaker 3: Costs at least, especially the move that we've seen over 183 00:10:03,720 --> 00:10:07,000 Speaker 3: the last year, which I'm sure which cannot obviously be 184 00:10:07,080 --> 00:10:10,000 Speaker 3: explained by multi decade trends. 185 00:10:10,440 --> 00:10:13,199 Speaker 4: So what we've seen is our cattle supplies that tightened 186 00:10:13,200 --> 00:10:15,920 Speaker 4: to the lowest levels than seventy five years. So we 187 00:10:15,960 --> 00:10:20,200 Speaker 4: have extremely tight supply situation, but we have incredibly strong 188 00:10:20,320 --> 00:10:24,480 Speaker 4: beef demand. Consumers willingness to pay for beef appears unbounded 189 00:10:24,800 --> 00:10:28,240 Speaker 4: as prices of increase, consumers that still cleared the grocery 190 00:10:28,240 --> 00:10:32,440 Speaker 4: store shelves with the product. And so the latest drought 191 00:10:32,480 --> 00:10:38,160 Speaker 4: that occurred had accelerated the ongoing liquidation of our US 192 00:10:38,280 --> 00:10:41,880 Speaker 4: beef cattle inventory. And that's why our supplies are so tight. 193 00:10:42,320 --> 00:10:45,840 Speaker 4: And yet you've got incredible consumer demand for beef, and 194 00:10:45,960 --> 00:10:49,240 Speaker 4: so we have seen a spike in prices because of 195 00:10:49,280 --> 00:10:52,559 Speaker 4: that strong demand. Consumers continue to be willing to pay 196 00:10:52,960 --> 00:10:56,080 Speaker 4: more for beef. But that is not how our market 197 00:10:56,120 --> 00:10:58,480 Speaker 4: has been functioning for the past decade. 198 00:10:58,760 --> 00:11:01,760 Speaker 3: Let's say the rain code, there's no drought, et cetera. 199 00:11:02,040 --> 00:11:05,040 Speaker 3: What are we talking about for a timeline again, setting 200 00:11:05,040 --> 00:11:07,720 Speaker 3: aside the structural things, what do we talk about for 201 00:11:07,920 --> 00:11:12,439 Speaker 3: a realistic timeline for getting back to where we think like, oh, 202 00:11:12,480 --> 00:11:15,320 Speaker 3: we are comfortable with the level of cattle stock that 203 00:11:15,360 --> 00:11:18,120 Speaker 3: we are happy with the level of cattle stock that 204 00:11:18,160 --> 00:11:19,079 Speaker 3: we have in this country. 205 00:11:19,640 --> 00:11:24,240 Speaker 4: Right, so we currently produce about three billion pounds less 206 00:11:24,480 --> 00:11:28,400 Speaker 4: beef than what is consumed in America. So large segment 207 00:11:28,440 --> 00:11:32,880 Speaker 4: of American agriculture actually underproduces for the domestic market. And 208 00:11:33,160 --> 00:11:37,000 Speaker 4: because of the long biological cycle of cattle, it takes 209 00:11:37,080 --> 00:11:40,640 Speaker 4: about three years to decide to hold back cattle to 210 00:11:40,720 --> 00:11:42,760 Speaker 4: breed and then to have a calf, and then to 211 00:11:42,840 --> 00:11:45,840 Speaker 4: raise that calf to slaughter weight over a period of 212 00:11:45,880 --> 00:11:48,760 Speaker 4: fifteen to eighteen months. And so in order for our 213 00:11:48,800 --> 00:11:53,000 Speaker 4: industry to begin an expansion phase, we would need a 214 00:11:53,120 --> 00:11:57,120 Speaker 4: price point that incentivizes producers to make the investment to 215 00:11:57,160 --> 00:12:01,800 Speaker 4: build a herd, and unfortunately that price point occurred back 216 00:12:01,840 --> 00:12:05,440 Speaker 4: around twenty twenty three. We should be in an aggressive 217 00:12:05,520 --> 00:12:10,959 Speaker 4: expansion phase now, except that instead of domestic consumers relying 218 00:12:11,040 --> 00:12:15,800 Speaker 4: on US producers, we've increased the volume of beef imports 219 00:12:15,840 --> 00:12:19,679 Speaker 4: to record volumes in twenty twenty four. That's displacing our 220 00:12:19,679 --> 00:12:24,480 Speaker 4: domestic production. And that increase of imports is not distinguished 221 00:12:24,480 --> 00:12:27,560 Speaker 4: in the marketplace. Consumers can't tell if the beef they're 222 00:12:27,559 --> 00:12:30,360 Speaker 4: buying is four and beef for domestic beef, and so 223 00:12:30,520 --> 00:12:32,680 Speaker 4: that puts the power and control in the hands of 224 00:12:32,720 --> 00:12:35,640 Speaker 4: the packers and the importers the retailers and not in 225 00:12:35,640 --> 00:12:38,760 Speaker 4: the hands of producers. So your question was how much 226 00:12:38,760 --> 00:12:41,520 Speaker 4: of this had to do with increase in input costs. Well, 227 00:12:41,559 --> 00:12:46,080 Speaker 4: the increase in input costs reduces the margin that US 228 00:12:46,160 --> 00:12:49,640 Speaker 4: cattle producers receive at any given price point, and we've 229 00:12:49,640 --> 00:12:53,320 Speaker 4: seen increased production costs certainly. But the point is is 230 00:12:53,360 --> 00:12:56,280 Speaker 4: that cattle producers do not set the price of beef. 231 00:12:56,679 --> 00:12:59,120 Speaker 4: The price of beef is set by the packers and 232 00:12:59,160 --> 00:13:02,720 Speaker 4: the retailers who sell to the consumer. The producer is 233 00:13:02,760 --> 00:13:05,960 Speaker 4: a price taker in this market and has been for decades. 234 00:13:06,400 --> 00:13:09,600 Speaker 4: They have cattle, they offer them for sale, they accept 235 00:13:09,640 --> 00:13:12,720 Speaker 4: or reject a bid by the packer, and they're producing 236 00:13:12,760 --> 00:13:16,120 Speaker 4: a perishable product. So when an animal is ready for slaughter, 237 00:13:16,240 --> 00:13:19,480 Speaker 4: ready to be fabricated into a beef product, the producer 238 00:13:19,480 --> 00:13:22,320 Speaker 4: who fed that cattle has a two to three week 239 00:13:22,440 --> 00:13:25,920 Speaker 4: window in which to market the animal. Otherwise it degrades 240 00:13:25,960 --> 00:13:29,320 Speaker 4: in quality, it adds fat instead of muscle, and as 241 00:13:29,320 --> 00:13:33,720 Speaker 4: a result, the producer has very limited bargaining power and 242 00:13:33,800 --> 00:13:36,760 Speaker 4: a highly concentrated market as we have now, And when 243 00:13:36,760 --> 00:13:39,880 Speaker 4: they're selling into a market that's controlled where four packers 244 00:13:39,920 --> 00:13:43,440 Speaker 4: control eighty percent of the market, they are victims of 245 00:13:43,600 --> 00:13:47,480 Speaker 4: the abuse of market power that emanates inherently from such 246 00:13:47,520 --> 00:13:52,160 Speaker 4: a highly concentrated marketing structure. So the increase production costs 247 00:13:52,520 --> 00:13:56,400 Speaker 4: reduce the profitability of producers, but it doesn't affect the 248 00:13:56,440 --> 00:13:59,600 Speaker 4: producer's ability to market cattle. That would be the demand 249 00:13:59,640 --> 00:14:02,760 Speaker 4: for life cattle, and the demand from my live cattle 250 00:14:02,920 --> 00:14:06,880 Speaker 4: is offset and undercut by increased volumes of import. 251 00:14:23,160 --> 00:14:28,600 Speaker 2: What's the relationship between beef availability and the dairy industry? 252 00:14:28,680 --> 00:14:31,520 Speaker 2: Dairy cows? So the reason I bring it up, Joe's 253 00:14:31,560 --> 00:14:33,560 Speaker 2: going to get sick of me mentioning this, But I've 254 00:14:33,560 --> 00:14:37,080 Speaker 2: been reading this like seventy year old book on small 255 00:14:37,080 --> 00:14:37,840 Speaker 2: scale farming. 256 00:14:38,000 --> 00:14:40,040 Speaker 3: I hate when people are always bringing up books that 257 00:14:40,080 --> 00:14:40,840 Speaker 3: they I know it. 258 00:14:42,480 --> 00:14:45,880 Speaker 2: Bringing up and you know, there's a chapter in it 259 00:14:45,960 --> 00:14:48,440 Speaker 2: about whether or not you want to go into cattle 260 00:14:48,520 --> 00:14:51,920 Speaker 2: ranching for beef or if you want to raise dairy cows. 261 00:14:52,400 --> 00:14:54,640 Speaker 2: And one of the things that you learn from this 262 00:14:54,880 --> 00:14:58,560 Speaker 2: is that every dairy cow usually becomes a beef cow 263 00:14:58,760 --> 00:15:03,080 Speaker 2: at some point once it's milk production starts to dry up, 264 00:15:03,360 --> 00:15:06,960 Speaker 2: it usually gets sold for slaughter. So what's the relationship 265 00:15:07,040 --> 00:15:09,000 Speaker 2: or the interaction like there. 266 00:15:09,520 --> 00:15:13,720 Speaker 4: Well, historically, what you described is true. As the dairy 267 00:15:13,760 --> 00:15:19,160 Speaker 4: animals have exceeded their production lifespan, they are marketed as 268 00:15:19,280 --> 00:15:23,520 Speaker 4: call animals into the beef supply chain. And it's a 269 00:15:23,640 --> 00:15:26,760 Speaker 4: very lean meat product that is mixed with the higher 270 00:15:26,880 --> 00:15:30,400 Speaker 4: quality trim that we obtain over our grain fed animals 271 00:15:30,400 --> 00:15:33,080 Speaker 4: that are fed in feed lots or is exclusively for beef. 272 00:15:33,520 --> 00:15:36,960 Speaker 4: So there wasn't much competition between the beef industry and 273 00:15:37,400 --> 00:15:41,160 Speaker 4: the dairy industry. But here recently, as we've increased our 274 00:15:41,200 --> 00:15:46,480 Speaker 4: technology and genetic abilities, we have begun to raise more 275 00:15:46,760 --> 00:15:50,840 Speaker 4: male dairy animals and are bringing them into feed lots 276 00:15:50,960 --> 00:15:54,120 Speaker 4: and feeding those animals, and they are now beginning to 277 00:15:54,280 --> 00:15:57,760 Speaker 4: compete with the beef cattle farmer and rancher in the marketplace. 278 00:15:57,800 --> 00:16:01,320 Speaker 4: And this is a relatively recent phenomena that's been occurring 279 00:16:01,360 --> 00:16:02,080 Speaker 4: in our industry. 280 00:16:02,240 --> 00:16:03,320 Speaker 2: Wait, why is that happening? 281 00:16:03,520 --> 00:16:07,680 Speaker 4: Yes, well, it's happening because there's the profit opportunity to 282 00:16:07,800 --> 00:16:11,200 Speaker 4: sell dairy cattles into the beef supply chain, and of 283 00:16:11,200 --> 00:16:14,440 Speaker 4: course that will compete directly with our America's farmers and 284 00:16:14,560 --> 00:16:17,560 Speaker 4: ranchers who not only will have to now compete with 285 00:16:17,680 --> 00:16:22,560 Speaker 4: this increase in the dairy beef sector. But they're already 286 00:16:22,680 --> 00:16:27,840 Speaker 4: dealing with this undifferentiated, cheaper, important flood that has been 287 00:16:27,920 --> 00:16:31,160 Speaker 4: negatively affecting their profitability in this industry. 288 00:16:31,360 --> 00:16:34,200 Speaker 3: Say a little bit more about Okay, kettle prices have 289 00:16:34,360 --> 00:16:38,320 Speaker 3: gone up, and so in theory that, as you said, 290 00:16:38,360 --> 00:16:42,600 Speaker 3: in theory, that should incent more investment, et cetera. By this, 291 00:16:43,040 --> 00:16:45,280 Speaker 3: talk a little bit more about some of the input 292 00:16:45,360 --> 00:16:49,080 Speaker 3: costs that a cattle rancher faces. I've been making these 293 00:16:49,120 --> 00:16:51,360 Speaker 3: decisions to expand their stock. 294 00:16:51,920 --> 00:16:54,840 Speaker 4: So one of the first factors is the availability of 295 00:16:54,880 --> 00:16:58,320 Speaker 4: sufficient land to raise the animal, because in the beef 296 00:16:58,400 --> 00:17:02,520 Speaker 4: cattle industry, the animal is primarily raised on grass. After 297 00:17:02,560 --> 00:17:06,080 Speaker 4: a calf is born and it suckles the mother for 298 00:17:06,119 --> 00:17:09,800 Speaker 4: about four to six months on grass and before it 299 00:17:09,880 --> 00:17:12,919 Speaker 4: is moved downstream in the supply chain to become a 300 00:17:13,000 --> 00:17:16,200 Speaker 4: yearly in animal and ultimately delivered to a feed lot 301 00:17:16,240 --> 00:17:19,320 Speaker 4: where it's fed until it's slaughter weight. And so the 302 00:17:19,359 --> 00:17:23,920 Speaker 4: input costs include the fuel with which to run an operation. 303 00:17:24,160 --> 00:17:27,720 Speaker 4: It includes the veterinary expenses for keeping your animals healthy. 304 00:17:27,760 --> 00:17:32,639 Speaker 4: It includes the land costs of maintaining sufficient forage supplies 305 00:17:32,680 --> 00:17:36,000 Speaker 4: with the animal. It includes the cost of equipment to 306 00:17:36,119 --> 00:17:39,840 Speaker 4: put up hay and grain with which to feed those cattle, 307 00:17:40,359 --> 00:17:44,159 Speaker 4: and in many instances it includes labor. However, most of 308 00:17:44,200 --> 00:17:46,880 Speaker 4: the family farm and ranches here in the United States 309 00:17:46,920 --> 00:17:50,639 Speaker 4: are just that their family farms and ranches attempting to 310 00:17:50,720 --> 00:17:55,560 Speaker 4: raise cattle, and there's experiencing increase input costs. You know, 311 00:17:55,600 --> 00:17:59,080 Speaker 4: we could talk about fertilizer costs too as well, but 312 00:17:59,320 --> 00:18:03,119 Speaker 4: ultimately the costs have increased due to inflation, and that 313 00:18:03,359 --> 00:18:06,760 Speaker 4: squeezes the margin that they receive at whatever price point 314 00:18:06,800 --> 00:18:08,919 Speaker 4: that they're experiencing in the marketplace. 315 00:18:09,240 --> 00:18:12,879 Speaker 2: In terms of industry consolidation, the fact that there are basically, 316 00:18:13,080 --> 00:18:17,600 Speaker 2: you know, four gatekeepers to beef processing in the US. 317 00:18:17,720 --> 00:18:19,520 Speaker 2: How did we actually get here? 318 00:18:20,040 --> 00:18:23,280 Speaker 4: Well, we got here because we were lax in enforcing 319 00:18:23,400 --> 00:18:27,240 Speaker 4: our US anti trust laws, the Sherman Act of eighteen ninety, 320 00:18:27,320 --> 00:18:30,960 Speaker 4: the Clayton Act, I think of about nineteen fourteen. 321 00:18:30,720 --> 00:18:34,480 Speaker 2: Sherman Act, Clayton Act, those acts. Sorry, the last time 322 00:18:34,520 --> 00:18:37,679 Speaker 2: we spoke about eggs in a big series about chicken, 323 00:18:38,080 --> 00:18:40,440 Speaker 2: we talked a lot about antitrust, right. 324 00:18:40,720 --> 00:18:43,359 Speaker 4: Well, and that's a huge problem. In fact, it's no 325 00:18:43,520 --> 00:18:47,760 Speaker 4: coincidence that as beef prices are increasing, we just saw 326 00:18:47,800 --> 00:18:51,320 Speaker 4: a settlement in a national class action suit in which 327 00:18:51,359 --> 00:18:55,359 Speaker 4: two of the largest packers, Tyson and Cargill, have purportedly 328 00:18:55,560 --> 00:18:59,960 Speaker 4: agreed to settle the consumer's complaints about beef price fixed 329 00:19:00,560 --> 00:19:02,320 Speaker 4: to the tune of about eighty seven and a half 330 00:19:02,440 --> 00:19:06,159 Speaker 4: million dollars. So what we have in our industry is 331 00:19:06,200 --> 00:19:10,880 Speaker 4: a decades long lack of enforcement of antitrust laws that 332 00:19:10,960 --> 00:19:14,199 Speaker 4: allowed the meat packers back in the nineteen eighties to 333 00:19:14,359 --> 00:19:17,439 Speaker 4: engage in what was called merger Mania. We saw an 334 00:19:17,480 --> 00:19:22,680 Speaker 4: unprecedented amount of mergers and acquisitions in the beef cattle industry, 335 00:19:23,160 --> 00:19:25,919 Speaker 4: and it was through that process and no enforcement of 336 00:19:25,920 --> 00:19:28,719 Speaker 4: anti trust laws, that the meat packers were able to 337 00:19:28,960 --> 00:19:33,320 Speaker 4: achieve this extremely high level of concentration. And in addition 338 00:19:33,359 --> 00:19:37,160 Speaker 4: to that, Congress realized over one hundred years ago that 339 00:19:37,320 --> 00:19:42,919 Speaker 4: independent livestock producers were really vulnerable to the monopsony power, 340 00:19:43,080 --> 00:19:46,520 Speaker 4: the buying power of the concentrated meat packers. So they 341 00:19:46,560 --> 00:19:49,159 Speaker 4: passed what was called the Packers and Stockyards Act in 342 00:19:49,240 --> 00:19:52,760 Speaker 4: nineteen twenty one, and this was to ensure that the 343 00:19:52,760 --> 00:19:57,119 Speaker 4: meat packers not only could they not engage in antitrust 344 00:19:57,200 --> 00:20:01,920 Speaker 4: activities such as monopolization and price fixing. But this Act 345 00:20:02,040 --> 00:20:06,320 Speaker 4: also said they couldn't engage in practices of procuring livestock 346 00:20:06,359 --> 00:20:11,119 Speaker 4: from producers that was pactly unfair. And so this important 347 00:20:11,160 --> 00:20:15,919 Speaker 4: act actually helped to bolster the United States' ability to 348 00:20:16,040 --> 00:20:20,199 Speaker 4: ensure antitrust violations were not incurring in the marketplace, and 349 00:20:20,200 --> 00:20:23,800 Speaker 4: it gave the independent producer recourse in the event that 350 00:20:23,840 --> 00:20:27,840 Speaker 4: they were treated unfairly or deceptively by the concentrated market. 351 00:20:28,080 --> 00:20:31,080 Speaker 4: The problem is just like our anti trust laws that 352 00:20:31,520 --> 00:20:34,360 Speaker 4: collected dust on the shelf, so to to the Packers 353 00:20:34,359 --> 00:20:37,600 Speaker 4: and Stockyards Act, and yet today the US Department of 354 00:20:37,640 --> 00:20:42,040 Speaker 4: Agriculture has not propagated the rules necessary in order to 355 00:20:42,119 --> 00:20:45,960 Speaker 4: implement and enforce this over one hundred year old Packers 356 00:20:45,960 --> 00:20:49,960 Speaker 4: and Stockyards Act that was intended to protect independent livestock 357 00:20:50,040 --> 00:20:53,480 Speaker 4: producers from the abuse of market power of the dominant 358 00:20:53,480 --> 00:20:54,160 Speaker 4: beef packers. 359 00:20:54,640 --> 00:20:57,639 Speaker 3: Do the children of ranchers want to become ranchers? There 360 00:20:57,680 --> 00:20:59,800 Speaker 3: was a popular country song that came out in twenty 361 00:20:59,840 --> 00:21:02,840 Speaker 3: two three by Cody Johnson called Dirt Cheap, and the 362 00:21:03,000 --> 00:21:05,880 Speaker 3: entire premise of the song is about this dad. There's 363 00:21:05,920 --> 00:21:08,840 Speaker 3: real estate developer offers them all this land and he's 364 00:21:08,880 --> 00:21:10,680 Speaker 3: about to take the money and then he gets sad 365 00:21:10,720 --> 00:21:12,919 Speaker 3: thinking about his kids will never be running around on 366 00:21:12,960 --> 00:21:15,040 Speaker 3: this And when I hear the song, I got a 367 00:21:15,080 --> 00:21:16,960 Speaker 3: little cynical. I was like, yeah, but that daughter is 368 00:21:17,000 --> 00:21:19,040 Speaker 3: going to sell the land when she gets older, so 369 00:21:19,080 --> 00:21:21,440 Speaker 3: it's this like she's going to move to a big city. 370 00:21:21,560 --> 00:21:24,360 Speaker 3: But are there issues in your industry of like the 371 00:21:24,400 --> 00:21:27,120 Speaker 3: next generation of ranchers, Like, no, I want to sell 372 00:21:27,160 --> 00:21:28,920 Speaker 3: this land to a data center. I want to sell 373 00:21:28,960 --> 00:21:31,960 Speaker 3: this land to a housing subdivision so that I can 374 00:21:32,000 --> 00:21:33,919 Speaker 3: like go work in finance in New York City. 375 00:21:34,800 --> 00:21:38,439 Speaker 4: When you have an industry like ours that has lost 376 00:21:38,600 --> 00:21:42,280 Speaker 4: over half its participants in the course of just over 377 00:21:42,320 --> 00:21:46,600 Speaker 4: a generation. Yeah, it's not unsurprising that the average age 378 00:21:46,640 --> 00:21:49,520 Speaker 4: of the US farm and rancher is now somewheres north 379 00:21:49,600 --> 00:21:53,040 Speaker 4: of fifty eight years of age. And we hear anecdotal 380 00:21:53,080 --> 00:21:56,600 Speaker 4: information all the time about ranch families who have struggled 381 00:21:57,080 --> 00:22:00,639 Speaker 4: under an economic cost price squeeze for decades their children 382 00:22:00,720 --> 00:22:04,280 Speaker 4: have watched, They've encouraged their children to do something else 383 00:22:04,400 --> 00:22:07,040 Speaker 4: other than to ranch. And that's a huge problem that 384 00:22:07,080 --> 00:22:10,720 Speaker 4: we have because part of this expansion phase will require 385 00:22:10,880 --> 00:22:14,600 Speaker 4: us to attract new interests to attract aspiring cattle farmers 386 00:22:14,600 --> 00:22:18,040 Speaker 4: and ranchers into the industry. That's not happening. And even 387 00:22:18,080 --> 00:22:20,520 Speaker 4: though I said that the price point was sufficient to 388 00:22:20,680 --> 00:22:24,840 Speaker 4: incentivize the expansion over a year ago, we're not expanding 389 00:22:25,000 --> 00:22:29,000 Speaker 4: and we're not expanding because our cattle producers has recently 390 00:22:29,080 --> 00:22:33,040 Speaker 4: witnessed a complete collapse in cattle prices. When we were 391 00:22:33,160 --> 00:22:35,560 Speaker 4: about where we're at today, and that was just as 392 00:22:35,600 --> 00:22:39,000 Speaker 4: recently as twenty fourteen and fifteen. At that time, we 393 00:22:39,040 --> 00:22:42,080 Speaker 4: had the highest nominal cattle prices in the history of 394 00:22:42,080 --> 00:22:45,600 Speaker 4: our industry, and beef consumers were then paying the highest 395 00:22:45,640 --> 00:22:50,359 Speaker 4: nominal beef prices in history. And every analyst, government and 396 00:22:50,440 --> 00:22:53,119 Speaker 4: private alike, said, the cattle producer is going to receive 397 00:22:53,160 --> 00:22:56,240 Speaker 4: another three years of very strong prices because of that 398 00:22:56,359 --> 00:22:58,359 Speaker 4: long biological cycle of cattle. 399 00:22:58,560 --> 00:23:02,000 Speaker 3: This is this strange me as a very important data point, 400 00:23:02,359 --> 00:23:07,159 Speaker 3: the fact that the rancher has been trained essentially to 401 00:23:07,359 --> 00:23:10,880 Speaker 3: expect that high prices won't necessarily sustain themselves. 402 00:23:10,960 --> 00:23:11,120 Speaker 4: Right. 403 00:23:11,480 --> 00:23:13,800 Speaker 3: You could see the boom bust, Ye yah, the boom bust. 404 00:23:14,080 --> 00:23:16,560 Speaker 3: And we talked about this across industries. It's like, great 405 00:23:16,600 --> 00:23:18,879 Speaker 3: that the price is there, but is the price going 406 00:23:18,960 --> 00:23:21,359 Speaker 3: to be there in three years when that cow is 407 00:23:21,440 --> 00:23:24,000 Speaker 3: ready to be sold for meat. It's not enough to 408 00:23:24,119 --> 00:23:25,640 Speaker 3: just have temporarily high prices. 409 00:23:26,640 --> 00:23:29,360 Speaker 4: Well, that's right, and that's exactly what happened at the 410 00:23:29,480 --> 00:23:33,160 Speaker 4: end of twenty fourteen. In twenty fifteen, when everyone believed 411 00:23:33,160 --> 00:23:37,320 Speaker 4: that our cattle prices would stay strong, they inexplicably collapsed, 412 00:23:37,320 --> 00:23:40,199 Speaker 4: and they collapsed further and faster than any time in history. 413 00:23:40,560 --> 00:23:43,359 Speaker 4: And they collapsed until we hit that point in twenty 414 00:23:43,520 --> 00:23:47,760 Speaker 4: seventeen when suddenly consumer demand was driving beat prices higher 415 00:23:48,000 --> 00:23:50,359 Speaker 4: and the meat packers were paying less and less for 416 00:23:50,440 --> 00:23:54,399 Speaker 4: cattle prices, and so we had this in verse, completely 417 00:23:54,480 --> 00:23:58,840 Speaker 4: dysfunctional situation in the marketplace, and producers were hurting. That's 418 00:23:58,880 --> 00:24:01,760 Speaker 4: the period we lost a hundred six thousand producers from 419 00:24:01,800 --> 00:24:05,960 Speaker 4: twenty seventeen to twenty twenty two. And only now, after 420 00:24:06,040 --> 00:24:08,919 Speaker 4: this latest drought that we shrunk the herd size to 421 00:24:08,920 --> 00:24:12,439 Speaker 4: such an ultra low level, have we seen the cattle 422 00:24:12,480 --> 00:24:16,800 Speaker 4: prices begin to once again respond favorably to the latent 423 00:24:16,880 --> 00:24:20,720 Speaker 4: forces of competition in the industry. They began to chase 424 00:24:20,840 --> 00:24:24,360 Speaker 4: beef prices upward, and we've seen that more acutely here 425 00:24:24,400 --> 00:24:27,680 Speaker 4: in the last couple few months as beef prices of increase. 426 00:24:28,200 --> 00:24:30,879 Speaker 4: But the fact is is that we have not enforced 427 00:24:30,920 --> 00:24:33,879 Speaker 4: antitrust laws and what we need to do now is 428 00:24:33,960 --> 00:24:38,640 Speaker 4: determined to what extent are today's beef prices caused by 429 00:24:39,200 --> 00:24:42,560 Speaker 4: antitrust behavior in the marketplace, not from the cattle producer, 430 00:24:42,600 --> 00:24:45,399 Speaker 4: who's the price taker in the marketplace, but by the 431 00:24:45,520 --> 00:24:50,119 Speaker 4: multinational beef packers and retailers that are actually controlling the 432 00:24:50,160 --> 00:24:51,880 Speaker 4: beef market here in the United States. 433 00:24:52,040 --> 00:24:54,960 Speaker 2: Well, speaking of that end expansion, one thing we have 434 00:24:55,160 --> 00:24:59,560 Speaker 2: seen is new entrants, new corporate entrants moving into the 435 00:24:59,560 --> 00:25:03,679 Speaker 2: beef and history and I mentioned Walmart earlier, what's the 436 00:25:03,760 --> 00:25:07,680 Speaker 2: thinking behind that? Is it just a vertical integration play 437 00:25:07,800 --> 00:25:10,720 Speaker 2: or what's the additive for a company like Walmart to 438 00:25:10,760 --> 00:25:11,440 Speaker 2: get into beef. 439 00:25:11,840 --> 00:25:14,560 Speaker 4: Well, you think about all of our livestock sectors. So 440 00:25:14,600 --> 00:25:18,040 Speaker 4: we'll start with the poultry sector. That sector was vertically 441 00:25:18,080 --> 00:25:21,440 Speaker 4: integrated in the sixties and seventies from egg to play. 442 00:25:21,760 --> 00:25:25,640 Speaker 4: It's the corporations, what we call the integrators, were controlling 443 00:25:25,680 --> 00:25:29,240 Speaker 4: the production. The farmers owned their farms and ranchers they 444 00:25:29,280 --> 00:25:33,280 Speaker 4: invested in the capitol, but the integrators dictated how the 445 00:25:33,320 --> 00:25:37,080 Speaker 4: farmers would raise those chickens. In fact, the integrator owned 446 00:25:37,119 --> 00:25:41,320 Speaker 4: the chickens and essentially hired the farmer to raise them 447 00:25:41,440 --> 00:25:45,000 Speaker 4: for the integrator. That model was then applied in the 448 00:25:45,080 --> 00:25:48,920 Speaker 4: eighties and nineties to our hog sector. Back in nineteen eighty, 449 00:25:48,960 --> 00:25:51,560 Speaker 4: when we had one point three million cattle producers, we 450 00:25:51,600 --> 00:25:54,560 Speaker 4: also had six hundred and sixty seven thousand hog producers 451 00:25:54,560 --> 00:25:58,160 Speaker 4: scattered all across the United States raising hogs. But today 452 00:25:58,280 --> 00:26:01,560 Speaker 4: we're down to sixty five thousand, ninety percent of our 453 00:26:01,560 --> 00:26:05,800 Speaker 4: hog producers because that industry, the corporations involved in that 454 00:26:05,880 --> 00:26:09,320 Speaker 4: industry began to follow the chicken model, and so we 455 00:26:09,440 --> 00:26:13,200 Speaker 4: reduced the number of participants and they began to raise 456 00:26:13,280 --> 00:26:17,320 Speaker 4: hogs under a highly concentrated situation, and it's completely vertically 457 00:26:17,359 --> 00:26:20,159 Speaker 4: integrated from birth to play. The cattle industry is the 458 00:26:20,240 --> 00:26:24,120 Speaker 4: last frontier for these major global need packers, and it's 459 00:26:24,160 --> 00:26:27,560 Speaker 4: because of the forage requirements and the long biological cycle 460 00:26:27,600 --> 00:26:31,159 Speaker 4: of cattle that has prevented them from engaging in the 461 00:26:31,240 --> 00:26:35,080 Speaker 4: vertical integration model, which we call chickenization. And we're trying 462 00:26:35,119 --> 00:26:38,359 Speaker 4: to prevent the chickenization of our cattle industry. But the 463 00:26:38,440 --> 00:26:41,879 Speaker 4: reason Walmart's getting into it is because it's profitable. So 464 00:26:42,080 --> 00:26:45,600 Speaker 4: Walmart has decided it's going to vertically integrate the beef 465 00:26:45,640 --> 00:26:50,280 Speaker 4: cattle industry. It's going to direct what genetics of farmer 466 00:26:50,359 --> 00:26:53,520 Speaker 4: rancher has to use in order to raise the animal. 467 00:26:53,720 --> 00:26:57,240 Speaker 4: Walmart will dictate the production practices and feeding, and then 468 00:26:57,280 --> 00:27:00,879 Speaker 4: Walmart will provide the marketing outlet for the ucers, and 469 00:27:00,920 --> 00:27:04,560 Speaker 4: then Walmart will sell that resulted beef product to the consumer. 470 00:27:04,680 --> 00:27:08,480 Speaker 2: Hey, it really is chickenization. It's the tournament system basically. 471 00:27:08,320 --> 00:27:10,439 Speaker 4: And it will lead to that. So the tournament system 472 00:27:10,520 --> 00:27:14,199 Speaker 4: is a pricing mechanism that greatly benefits the integrator and 473 00:27:14,240 --> 00:27:17,080 Speaker 4: allows them to buy the chickens from the farmer and 474 00:27:17,160 --> 00:27:20,040 Speaker 4: pay less for their managerial skills and raising the chicken 475 00:27:20,080 --> 00:27:22,359 Speaker 4: for them. And that's a concern we have with the 476 00:27:22,359 --> 00:27:26,399 Speaker 4: Walmart model. Walmart wants to lock up this segment of 477 00:27:26,400 --> 00:27:30,280 Speaker 4: the beef industry and they want to eliminate all these 478 00:27:30,480 --> 00:27:34,120 Speaker 4: cattle producers just have been eliminated. Hog producers were eliminated 479 00:27:34,119 --> 00:27:37,080 Speaker 4: in the hog industry, and poultry producers were eliminated. And 480 00:27:37,119 --> 00:27:40,000 Speaker 4: the first step in the process is you do away 481 00:27:40,080 --> 00:27:44,320 Speaker 4: with you eliminate the competitive cash market that's what allows 482 00:27:44,359 --> 00:27:47,439 Speaker 4: them to vertically integrate an industry, and we're seeing in 483 00:27:47,480 --> 00:27:49,960 Speaker 4: that in the cattle industry, our cash market has been 484 00:27:50,000 --> 00:27:53,760 Speaker 4: shrinking at an alarming rate, and as we allow this 485 00:27:53,880 --> 00:27:57,160 Speaker 4: to continue, we will soon see even more vertical integration. 486 00:27:57,280 --> 00:27:59,360 Speaker 4: What this means is we're going to hollow out rural 487 00:27:59,440 --> 00:28:02,280 Speaker 4: communities all across America, just as we have been doing 488 00:28:02,320 --> 00:28:04,960 Speaker 4: for the past four decades. And that's because we will 489 00:28:05,040 --> 00:28:09,399 Speaker 4: eliminate profitable opportunities for our independent, family scale farmers and 490 00:28:09,480 --> 00:28:14,480 Speaker 4: ranchers by eliminating the cash market, by dismantling the competitive infrastructure, 491 00:28:14,720 --> 00:28:18,120 Speaker 4: and simply handing the industry over to a highly centralized, 492 00:28:18,160 --> 00:28:24,640 Speaker 4: highly concentrated be packing and retailing industry. 493 00:28:36,520 --> 00:28:41,320 Speaker 3: I'm going to veer into some sensitive territory here. I 494 00:28:41,320 --> 00:28:44,120 Speaker 3: don't know, I think about how you lean politically. I 495 00:28:44,120 --> 00:28:47,760 Speaker 3: also don't particularly care is fine. All that being said, 496 00:28:48,680 --> 00:28:52,000 Speaker 3: I think that I have stereotypes, and I think I 497 00:28:52,000 --> 00:28:55,840 Speaker 3: imagine what the typical cattle rancher, how they are politically, 498 00:28:56,160 --> 00:28:59,320 Speaker 3: guy wearing a cowboy hat, speaking with a country accent. 499 00:28:59,360 --> 00:29:02,640 Speaker 3: I would we have a presumption about how they might vote. Again, 500 00:29:02,720 --> 00:29:04,960 Speaker 3: not you specifically, Well, you know, I have my stereotypes, 501 00:29:05,000 --> 00:29:08,600 Speaker 3: et cetera, and they're probably true. Has the current administration, 502 00:29:08,920 --> 00:29:11,200 Speaker 3: you know, talking, he's been talking to you guys via 503 00:29:11,280 --> 00:29:14,560 Speaker 3: history social account. You want to to lower prices, but 504 00:29:14,640 --> 00:29:18,520 Speaker 3: also appreciate him for the high prices. A little unclear 505 00:29:19,000 --> 00:29:22,959 Speaker 3: he has this current administration been a friend to the 506 00:29:23,200 --> 00:29:24,360 Speaker 3: independent cattle rancher. 507 00:29:24,880 --> 00:29:28,640 Speaker 4: Well, what independent cattle producers needed is they needed our 508 00:29:28,800 --> 00:29:32,440 Speaker 4: imports to be managed, not to hand to the meat 509 00:29:32,480 --> 00:29:36,240 Speaker 4: packers the ability to source whatever volume of imports they 510 00:29:36,280 --> 00:29:39,640 Speaker 4: want to displace our domestic production, to prevent our domestic 511 00:29:39,680 --> 00:29:42,600 Speaker 4: production from keeping up with growth and population, which is 512 00:29:42,880 --> 00:29:45,920 Speaker 4: what has occurred here. And so what we needed was 513 00:29:46,400 --> 00:29:50,680 Speaker 4: the implementation of tariffs and tariff rate quoters on countries 514 00:29:50,680 --> 00:29:54,800 Speaker 4: that persistently maintain a trade surplus with the United States. 515 00:29:54,960 --> 00:29:58,160 Speaker 4: In other words, countries from which we buy large volumes 516 00:29:58,160 --> 00:30:01,040 Speaker 4: of beef, but we sell to them very little. So 517 00:30:01,080 --> 00:30:04,480 Speaker 4: we have been calling for tariffs and tariff rate quotas, 518 00:30:04,520 --> 00:30:07,120 Speaker 4: and tariff rate quoteras, of course, are limits on the 519 00:30:07,240 --> 00:30:10,040 Speaker 4: volume of beef that any country can export to the 520 00:30:10,120 --> 00:30:13,840 Speaker 4: United States. And so when President Trump took his second term, 521 00:30:14,120 --> 00:30:17,040 Speaker 4: that's the first thing he began doing was imposing tariffs, 522 00:30:17,240 --> 00:30:20,440 Speaker 4: and for an industry that underproduces in the domestic market, 523 00:30:20,840 --> 00:30:24,080 Speaker 4: we need the tariffs to provide our industry the space 524 00:30:24,160 --> 00:30:28,080 Speaker 4: to expand and increased production. So we strongly supported the 525 00:30:28,120 --> 00:30:32,760 Speaker 4: tariffs when we saw Brazilian imports absolutely explode in twenty 526 00:30:33,000 --> 00:30:36,440 Speaker 4: twenty five and even last year, we were thankful that 527 00:30:36,520 --> 00:30:40,680 Speaker 4: the President imposed a fifty percent tariff on Brazilian exports 528 00:30:40,680 --> 00:30:43,840 Speaker 4: of beef because that was going to further keep our 529 00:30:43,880 --> 00:30:47,719 Speaker 4: industry awash in these price depressing imports. But when the 530 00:30:47,720 --> 00:30:52,280 Speaker 4: President announced this idea to lower consumer beef prices by 531 00:30:52,400 --> 00:30:57,960 Speaker 4: increasing Argentina's beef import quota rate, we believe that he 532 00:30:58,160 --> 00:31:02,640 Speaker 4: was misguided. He was misinformed as to how the market 533 00:31:02,680 --> 00:31:05,520 Speaker 4: structure work. I don't think he was aware that our 534 00:31:05,560 --> 00:31:09,840 Speaker 4: industry has just gone through years of depressed prices while 535 00:31:09,880 --> 00:31:13,920 Speaker 4: consumers were experiencing record beef prices. I don't think he 536 00:31:14,040 --> 00:31:18,040 Speaker 4: understood how severe the lack of anti trust enforcement has 537 00:31:18,120 --> 00:31:21,400 Speaker 4: adversely affected our industry and caused our industry to shrink. 538 00:31:21,880 --> 00:31:25,160 Speaker 4: And so producers are very very concerned right now because 539 00:31:25,400 --> 00:31:27,680 Speaker 4: we're at the price point where we should be expanding, 540 00:31:28,040 --> 00:31:31,320 Speaker 4: but we're not expanding as we should be because of 541 00:31:31,360 --> 00:31:34,440 Speaker 4: the concern for the market failure in our industry that 542 00:31:34,520 --> 00:31:38,160 Speaker 4: has not been corrected. It's because we're not certain anymore 543 00:31:38,240 --> 00:31:40,920 Speaker 4: whether the President is in fact going to begin to 544 00:31:41,000 --> 00:31:43,560 Speaker 4: manage these imports or if he was just going to 545 00:31:43,640 --> 00:31:46,760 Speaker 4: let these packers continue to import whatever volume of beef 546 00:31:46,760 --> 00:31:49,680 Speaker 4: and cattle they want to displace our domestic production, and 547 00:31:49,720 --> 00:31:53,000 Speaker 4: they do this without informing consumers where that beef is from. 548 00:31:53,120 --> 00:31:56,120 Speaker 4: There is no country of origin label on the imported 549 00:31:56,160 --> 00:31:59,600 Speaker 4: beef product, so consumers can't choose to support the domestics 550 00:31:59,600 --> 00:32:02,640 Speaker 4: supply chain versus the foreign supply chain. And that's why 551 00:32:02,640 --> 00:32:05,240 Speaker 4: we urge in Congress to pass mandatory country boards and 552 00:32:05,280 --> 00:32:08,160 Speaker 4: labeling immediately. And I think this will help to at 553 00:32:08,240 --> 00:32:12,400 Speaker 4: least mitigate the negative impact that increased imports from Argentina 554 00:32:12,440 --> 00:32:14,520 Speaker 4: will have on our industry, because then we can go 555 00:32:14,600 --> 00:32:17,000 Speaker 4: to the consumer and ask them to choose the higher 556 00:32:17,080 --> 00:32:21,360 Speaker 4: quality USA produce beef and support US cattle farmers and ranchers. 557 00:32:21,400 --> 00:32:23,960 Speaker 3: Look, I totally get where you're coming from, but I 558 00:32:24,640 --> 00:32:26,880 Speaker 3: live in New York City and I have children to feed, 559 00:32:26,920 --> 00:32:29,560 Speaker 3: and one of my children loves beef a lot. And 560 00:32:29,640 --> 00:32:34,400 Speaker 3: the vast majority of Americans are not cattle ranchers by 561 00:32:34,440 --> 00:32:38,240 Speaker 3: any strategy. So again, I understand that you have a 562 00:32:38,560 --> 00:32:41,840 Speaker 3: constituency that you represent. You want to make your case. 563 00:32:42,360 --> 00:32:45,160 Speaker 3: Why should the vast majority of the country, which are 564 00:32:45,200 --> 00:32:48,360 Speaker 3: beef consumers get no benefit from higher cattle prices, get 565 00:32:48,440 --> 00:32:52,160 Speaker 3: no benefit from higher beef prices. Why shouldn't we want 566 00:32:52,640 --> 00:32:56,800 Speaker 3: the either imports channel or the Walmart, which frankly has 567 00:32:56,840 --> 00:32:59,240 Speaker 3: a long history of driving prices down in almost any 568 00:32:59,280 --> 00:33:02,440 Speaker 3: category enter. They're sort of famously a low cost seller. 569 00:33:02,680 --> 00:33:04,360 Speaker 3: Why shouldn't we support these trends? 570 00:33:04,760 --> 00:33:07,640 Speaker 4: Well, look at any other sector in the American economy. 571 00:33:08,040 --> 00:33:12,160 Speaker 4: So we do import large volumes of goods from China, 572 00:33:12,200 --> 00:33:14,680 Speaker 4: for example, and a consumer can go to the grocery 573 00:33:14,720 --> 00:33:18,640 Speaker 4: store and see a China priced product labeled as China 574 00:33:18,720 --> 00:33:21,680 Speaker 4: product or China or they could buy a USA product, 575 00:33:21,720 --> 00:33:24,200 Speaker 4: And typically the USA product is going to cost more, 576 00:33:24,480 --> 00:33:27,360 Speaker 4: But consumers have a choice. They can choose to purchase 577 00:33:27,440 --> 00:33:30,000 Speaker 4: the cheaper product if they want to. Now jump to 578 00:33:30,040 --> 00:33:34,520 Speaker 4: the beef industry, consumers have no choice. The product is undifferentiated. 579 00:33:34,560 --> 00:33:38,560 Speaker 4: The meat packers are importing this beef from Australia, New Zealand. 580 00:33:38,560 --> 00:33:41,320 Speaker 4: In these twenty different countries I talked about earlier. They're 581 00:33:41,360 --> 00:33:44,200 Speaker 4: importing them cheaper than what we can produce it here, 582 00:33:44,400 --> 00:33:46,560 Speaker 4: but there's no label on it. What there is on 583 00:33:46,600 --> 00:33:50,160 Speaker 4: it is a US inspection sticker, leading and suspecting consumers 584 00:33:50,200 --> 00:33:52,640 Speaker 4: to believe, well, that must be a domestic product. And 585 00:33:52,720 --> 00:33:56,720 Speaker 4: so because the consumer can't choose between the cheaper foreign 586 00:33:56,800 --> 00:34:01,479 Speaker 4: product and the more expensive USA produc product, there's no 587 00:34:01,560 --> 00:34:04,040 Speaker 4: price saving for the consumer because the packers and the 588 00:34:04,080 --> 00:34:07,200 Speaker 4: retails will price it identical because they don't have to 589 00:34:07,200 --> 00:34:11,360 Speaker 4: distinguish it, so they pocket the increased profitability of buying 590 00:34:11,480 --> 00:34:14,800 Speaker 4: low and selling high. And the most affluent beef consuming 591 00:34:14,840 --> 00:34:17,480 Speaker 4: market in the world, and that's the United States of America. 592 00:34:17,600 --> 00:34:21,319 Speaker 4: That's an example of our dysfunctional market. Consumers have not 593 00:34:21,640 --> 00:34:26,040 Speaker 4: benefited from these increased volumes of imports. Instead, these increased 594 00:34:26,120 --> 00:34:29,360 Speaker 4: volumes of imports have reduced demand for our domestic cattle, 595 00:34:29,719 --> 00:34:32,640 Speaker 4: driving hundreds of thousands of cattle producers out of the 596 00:34:32,719 --> 00:34:34,800 Speaker 4: industry over the past four decades. 597 00:34:35,320 --> 00:34:38,560 Speaker 2: Can I start a beef processing plant? Why can't I 598 00:34:38,640 --> 00:34:41,720 Speaker 2: go into it? It seems like a very profitable business. Certainly, 599 00:34:41,719 --> 00:34:43,839 Speaker 2: if you're a JBS or someone like that, you seem 600 00:34:43,880 --> 00:34:45,880 Speaker 2: to be making a lot of money, why don't we 601 00:34:45,920 --> 00:34:46,760 Speaker 2: have new entrants. 602 00:34:47,360 --> 00:34:50,520 Speaker 4: So you have four packers controlling eighty percent of the 603 00:34:50,520 --> 00:34:54,200 Speaker 4: fed cattle market, meaning they also control about eighty percent 604 00:34:54,239 --> 00:34:56,879 Speaker 4: of the box beef market, meaning they've got long term 605 00:34:56,880 --> 00:35:00,319 Speaker 4: and short term contracts with the major retailers. They have 606 00:35:00,600 --> 00:35:03,320 Speaker 4: shelf space with those retailers. So, if you're a small 607 00:35:03,360 --> 00:35:05,719 Speaker 4: packing plant trying to get started, how are you going 608 00:35:05,760 --> 00:35:08,400 Speaker 4: to market your beef? When you're marketing into such a 609 00:35:08,480 --> 00:35:12,319 Speaker 4: highly concentrated, consolidated market where the retailer has long term 610 00:35:12,320 --> 00:35:16,719 Speaker 4: contracts with the largest dominant global beef packers, how are 611 00:35:16,760 --> 00:35:19,560 Speaker 4: you going to access the marketplace? So we've had lots 612 00:35:19,600 --> 00:35:22,600 Speaker 4: of smaller meat packers try to start up that it 613 00:35:22,680 --> 00:35:26,480 Speaker 4: requires a huge capital outlay to do so. Nevertheless, the 614 00:35:26,520 --> 00:35:29,879 Speaker 4: government actually during the past administration, has been encouraging their 615 00:35:29,960 --> 00:35:33,399 Speaker 4: growth and development. But they're struggling. They're struggling because they 616 00:35:33,440 --> 00:35:37,920 Speaker 4: have difficulty in marketing their product. Even if they're marketing 617 00:35:37,960 --> 00:35:42,759 Speaker 4: a high quality product, they're marketing into a commodity structured 618 00:35:42,840 --> 00:35:46,480 Speaker 4: marketplace and the advantage falls to the meat packers. So 619 00:35:46,680 --> 00:35:50,799 Speaker 4: until and unless we enforce our antitrust laws and our 620 00:35:50,840 --> 00:35:54,839 Speaker 4: fair competition laws, we will continue to see these upstart 621 00:35:55,320 --> 00:36:01,600 Speaker 4: experiencing severe difficulty in finding a profitable marketing outlet for 622 00:36:01,680 --> 00:36:02,200 Speaker 4: their product. 623 00:36:02,560 --> 00:36:05,360 Speaker 3: You know, like I said, I really like beef. Everyone's 624 00:36:05,360 --> 00:36:08,480 Speaker 3: into protein these days. That we talked about this recently 625 00:36:08,520 --> 00:36:12,799 Speaker 3: on another episode. Protein is really hot. Animal protein in 626 00:36:12,840 --> 00:36:15,359 Speaker 3: particular is really hot. There's a lot of influencers when 627 00:36:15,400 --> 00:36:18,200 Speaker 3: people have podcasts and they say things like eat more 628 00:36:18,239 --> 00:36:21,439 Speaker 3: red meat, and our attitudes about red meat of change. 629 00:36:21,480 --> 00:36:24,120 Speaker 3: When I was growing up that was scary of don't 630 00:36:24,160 --> 00:36:26,640 Speaker 3: cut back on your red meat. Now it's like a 631 00:36:26,760 --> 00:36:28,759 Speaker 3: red meat is like the healthiest thing you can eat. 632 00:36:28,800 --> 00:36:30,000 Speaker 3: I don't know if that's true, but a lot of 633 00:36:30,000 --> 00:36:32,799 Speaker 3: people would say that how much of the prices that 634 00:36:32,880 --> 00:36:36,920 Speaker 3: we pay, whether it's for the price of cattle or 635 00:36:37,160 --> 00:36:40,120 Speaker 3: the end price of our ground beef, for whatever steak 636 00:36:40,760 --> 00:36:45,879 Speaker 3: is about the secular trend towards people wanting to have 637 00:36:46,000 --> 00:36:48,400 Speaker 3: more animal protein in their diets. 638 00:36:49,320 --> 00:36:52,160 Speaker 4: Sure, so, I think it's a huge factor. I think 639 00:36:52,200 --> 00:36:55,360 Speaker 4: there are a number of factors contributing to the consumer's 640 00:36:55,520 --> 00:36:58,840 Speaker 4: increased demand and willingness to pay more for beef, and 641 00:36:58,880 --> 00:37:01,400 Speaker 4: I think they're in life. The answer to the problem. 642 00:37:01,800 --> 00:37:04,440 Speaker 4: If we enforce our antitrust laws and let the market 643 00:37:04,560 --> 00:37:07,560 Speaker 4: signals flow in our industry, we will begin to expand 644 00:37:07,920 --> 00:37:11,360 Speaker 4: and our production will soon hit an equilibrium with the 645 00:37:11,360 --> 00:37:15,000 Speaker 4: consumer demand, and we would see prices subside. In fact, 646 00:37:15,080 --> 00:37:18,800 Speaker 4: if consumers are unwilling to pay current prices for beef, 647 00:37:19,000 --> 00:37:23,240 Speaker 4: they would shift to other protein sources like lamb, chicken, 648 00:37:23,280 --> 00:37:26,160 Speaker 4: and pork, and you would see the price point from 649 00:37:26,160 --> 00:37:29,440 Speaker 4: the retailers begin to fall, and you would see the 650 00:37:29,760 --> 00:37:33,760 Speaker 4: high beef prices subside. Actually, but if the government causes 651 00:37:33,840 --> 00:37:37,640 Speaker 4: us to happen, if the government interferes and forces the 652 00:37:37,680 --> 00:37:41,440 Speaker 4: demand for live cattle to decline, we're not going to 653 00:37:41,480 --> 00:37:44,719 Speaker 4: increase the size of our US cattle herd, and America 654 00:37:44,760 --> 00:37:49,120 Speaker 4: will become increasingly dependent on foreign sources for the beef. 655 00:37:49,560 --> 00:37:52,840 Speaker 4: Right now, at twenty twenty four, about twenty two percent 656 00:37:52,880 --> 00:37:55,600 Speaker 4: of all the beef available in the US market was 657 00:37:55,760 --> 00:37:58,680 Speaker 4: imported product. And if we look at our sister industry, 658 00:37:58,680 --> 00:38:01,120 Speaker 4: the sheep industry, would who is the direction our cattle 659 00:38:01,120 --> 00:38:04,840 Speaker 4: industry is going. In twenty twenty four, seventy three percent 660 00:38:04,880 --> 00:38:07,920 Speaker 4: of all the lamb consumed in America came from Australia, 661 00:38:08,000 --> 00:38:12,799 Speaker 4: New Zealand. We've decimated our domestic sheep industry. Now we're 662 00:38:13,360 --> 00:38:16,359 Speaker 4: now government has its sights on the cattle industry, and 663 00:38:16,480 --> 00:38:20,960 Speaker 4: the increasing imports without any product differentiation in the marketplace 664 00:38:21,280 --> 00:38:26,360 Speaker 4: will simply exacerbate the ongoing shrinking of our cattle producer 665 00:38:26,440 --> 00:38:29,360 Speaker 4: in terms of the number of participants, number of cattle, 666 00:38:29,560 --> 00:38:30,920 Speaker 4: and the number of marketing outlets. 667 00:38:31,560 --> 00:38:33,279 Speaker 2: All right, we're going to have to leave it there, 668 00:38:33,800 --> 00:38:39,840 Speaker 2: Bill Bullard, I just realized Bullard nominative determinism. Right, you 669 00:38:39,920 --> 00:38:42,680 Speaker 2: had to go into cattle. Thank you so much for 670 00:38:42,680 --> 00:38:43,880 Speaker 2: coming on offline. 671 00:38:44,040 --> 00:38:58,720 Speaker 4: My pleasure. Thank you very much. Joe. 672 00:38:58,920 --> 00:39:03,240 Speaker 2: That's really interesting. I'm definitely closely related to the Chicken 673 00:39:03,320 --> 00:39:05,840 Speaker 2: series that I did, and again it seems to be 674 00:39:05,960 --> 00:39:09,680 Speaker 2: that chickenization the running through agriculture. I hadn't realized that 675 00:39:10,360 --> 00:39:15,880 Speaker 2: cows cattle ranching were basically like the last frontier agriculture either. 676 00:39:15,880 --> 00:39:18,040 Speaker 3: And I, to be honest, I would have already assumed 677 00:39:18,080 --> 00:39:20,920 Speaker 3: it had been more or less on that. I actually 678 00:39:21,000 --> 00:39:27,040 Speaker 3: think the Walmart thing is very interesting because on the 679 00:39:27,080 --> 00:39:30,759 Speaker 3: one hand, people look at an entity like Walmart and 680 00:39:30,760 --> 00:39:34,080 Speaker 3: it's like, here's this monopsity player. It's gonna drive so 681 00:39:34,160 --> 00:39:36,480 Speaker 3: much power. On the other hand, you say, here's a 682 00:39:36,520 --> 00:39:39,200 Speaker 3: new market entrant. This is is like here is it? 683 00:39:39,320 --> 00:39:42,239 Speaker 3: The market has just gotten more competitive. I think it's 684 00:39:42,239 --> 00:39:44,960 Speaker 3: an interesting gut check for people who want to think 685 00:39:45,000 --> 00:39:48,120 Speaker 3: about like market competition that when you read the headline 686 00:39:48,600 --> 00:39:52,440 Speaker 3: Walmart is going to get into beef processing, do you 687 00:39:52,520 --> 00:39:55,840 Speaker 3: read that as like bad or good? Because you asked, 688 00:39:56,040 --> 00:39:58,120 Speaker 3: why aren't there more interest? Well, here's a new entrant 689 00:39:58,120 --> 00:39:59,359 Speaker 3: coming in. I have to say. 690 00:39:59,360 --> 00:40:01,839 Speaker 2: I shop at on I buy beef. I buy those 691 00:40:01,880 --> 00:40:04,839 Speaker 2: big Have you ever seen the big, like long packages 692 00:40:04,880 --> 00:40:05,680 Speaker 2: of ground beef. 693 00:40:05,880 --> 00:40:06,000 Speaker 1: Oh? 694 00:40:06,440 --> 00:40:10,320 Speaker 2: Yeah, they're pretty good. Actually, I am kind of floored 695 00:40:10,360 --> 00:40:12,920 Speaker 2: that there's no country of origin label on these. I 696 00:40:12,960 --> 00:40:13,839 Speaker 2: never thought about that. 697 00:40:14,080 --> 00:40:18,600 Speaker 3: I am a little skeptical would change much like might 698 00:40:18,680 --> 00:40:23,759 Speaker 3: not like, would you spend meaningfully more or less on 699 00:40:23,920 --> 00:40:27,520 Speaker 3: beef presuming you expect that it was like healthier or whatever, 700 00:40:27,560 --> 00:40:30,360 Speaker 3: that it was safely arrived. 701 00:40:30,560 --> 00:40:33,200 Speaker 2: Yeah, Well, what I would say is I do shop 702 00:40:33,239 --> 00:40:37,240 Speaker 2: at Walmart, but I shop at Walmart generally for bulk beef, 703 00:40:37,440 --> 00:40:40,319 Speaker 2: and if I'm looking for the really good stuff, I 704 00:40:40,360 --> 00:40:44,120 Speaker 2: will go to an independent farmer, of which there are 705 00:40:44,120 --> 00:40:47,080 Speaker 2: many in Connecticut. And I realized, like not everyone has 706 00:40:47,120 --> 00:40:49,760 Speaker 2: that luxury, and I will try to get the good beef. 707 00:40:49,880 --> 00:40:51,239 Speaker 3: I might try to get the good beef too. It 708 00:40:51,320 --> 00:40:53,640 Speaker 3: might come from Japan. Don't they like treat their cows 709 00:40:53,640 --> 00:40:56,600 Speaker 3: really well, like they like give their cows like beer 710 00:40:56,760 --> 00:40:59,759 Speaker 3: and all that stuff massages. Yeah, No, I think I 711 00:40:59,760 --> 00:41:02,960 Speaker 3: love talking about animal industry economics. There's a lot of tension. 712 00:41:03,040 --> 00:41:04,680 Speaker 3: I will say one other thing, which is, you know, 713 00:41:04,719 --> 00:41:07,040 Speaker 3: I asked that question about like, well, why should we 714 00:41:07,040 --> 00:41:08,960 Speaker 3: care the beef consuming part of the world, which is 715 00:41:09,000 --> 00:41:11,120 Speaker 3: the of the country, which is the vast majority of 716 00:41:11,160 --> 00:41:14,680 Speaker 3: the country. The US used to run a very big 717 00:41:14,800 --> 00:41:18,560 Speaker 3: trade surplus and food stuff. Only very recently, in the 718 00:41:18,640 --> 00:41:21,960 Speaker 3: last couple of years, has that turned into deficit. It's 719 00:41:22,080 --> 00:41:26,000 Speaker 3: probably a source of some concern to me that like 720 00:41:26,080 --> 00:41:31,280 Speaker 3: we no longer can domestically satisfy all of our food needs. 721 00:41:32,200 --> 00:41:36,320 Speaker 2: If you're worried about domestic semiconduct, then you probably should 722 00:41:36,320 --> 00:41:37,480 Speaker 2: be worried about food capacity. 723 00:41:37,520 --> 00:41:40,600 Speaker 3: I think there are some some overlap issues. 724 00:41:40,640 --> 00:41:43,520 Speaker 2: You can't eat the chips, Joe, oh, except. 725 00:41:43,280 --> 00:41:46,680 Speaker 3: For except the other chips that we can eat. I know, 726 00:41:46,680 --> 00:41:48,080 Speaker 3: I think there are some I think there are some 727 00:41:48,120 --> 00:41:52,120 Speaker 3: things to worry about or think about with food that 728 00:41:52,200 --> 00:41:54,360 Speaker 3: are a little different, a little similar, that maybe we 729 00:41:54,360 --> 00:41:55,239 Speaker 3: should talk about more. 730 00:41:55,160 --> 00:41:55,600 Speaker 4: At some point. 731 00:41:55,719 --> 00:41:58,440 Speaker 2: Absolutely, all right, shall we leave it there for This 732 00:41:58,520 --> 00:42:01,840 Speaker 2: has been another episode of the All Podcast. I'm Tracy Alloway. 733 00:42:01,920 --> 00:42:04,000 Speaker 2: You can follow me at Tracy Alloway. 734 00:42:03,800 --> 00:42:06,719 Speaker 3: And I'm Jill Wisenthal. You can follow me at the Stalwart. 735 00:42:07,000 --> 00:42:11,759 Speaker 3: Follow urcaf USA. It's at arcaf USA. Follow our producers 736 00:42:11,800 --> 00:42:15,000 Speaker 3: Kerman Rodriguez at Kerman armand dash Ol Bennett at dashbod 737 00:42:15,280 --> 00:42:18,080 Speaker 3: and kill Brooks at Kilbrooks. From our Odd Lots content, 738 00:42:18,160 --> 00:42:20,360 Speaker 3: go to Bloomberg dot com slash odd Lots with the 739 00:42:20,480 --> 00:42:23,080 Speaker 3: daily newsletter and all of our episodes, and you can 740 00:42:23,200 --> 00:42:25,200 Speaker 3: chat about all of these topics twenty four to seven 741 00:42:25,320 --> 00:42:28,640 Speaker 3: in our discord discord do gg slash. 742 00:42:28,280 --> 00:42:31,040 Speaker 2: Odlocks And if you enjoy odd Lots, if you like 743 00:42:31,080 --> 00:42:34,040 Speaker 2: it when we do these agricultural episodes, then please leave 744 00:42:34,120 --> 00:42:37,800 Speaker 2: us a positive review on your favorite podcast platform. And remember, 745 00:42:37,880 --> 00:42:40,239 Speaker 2: if you are a Bloomberg subscriber, you can listen to 746 00:42:40,360 --> 00:42:43,399 Speaker 2: all of our episodes absolutely ad free. All you need 747 00:42:43,440 --> 00:42:46,360 Speaker 2: to do is find the Bloomberg channel on Apple Podcasts 748 00:42:46,360 --> 00:43:05,800 Speaker 2: and follow the instructions there. Thanks for listening in