Mergers starting 50 years ago marked the beginning of a massive consolidation that resulted in meatpackers with nearly double the power they held 120 years ago. A century after the 1921 Packers and Stockyards Act was implemented to reign in the five firms that made up The Meat Trust – here we are again, with one less packer, wielding significantly more control of the market, with far less government regulation.

Four giant companies – that’s right, FOUR – Tyson, Cargill, and Brazil-based National Beef and JBS, now control 85% of the U.S. beef market. WH Group (Chinese), JBS, Hormel, and Tyson control about 67% of the pork market. Tyson and Pilgrims Pride control about 45% of the chicken market. 

Who exactly are The Big 4? Walk through any grocery store’s meat department and you’ll see choices galore, but the majority of dozens of well-known brands are owned by a handful of giants – half of which aren’t even U.S. based.

Tyson –  the second largest food company in the country, American owned and headquartered in Springdale, AL with $47 billion in sales for 2021. Tyson bought the world’s largest supplier of premium beef and pork products, IBP Inc., in 2001. It’s the second-largest pork and chicken packer in the U.S. and sells products in 90 countries. 

Cargill – headquartered in Wichita, KS with $134 billion in sales for 2021. USA owned Cargill Meat Solutions is one of 75 businesses under Cargill Inc., the largest privately-held corporation in the United States. Cargill runs the biggest flour-milling company in the world, is a leading corn syrup and soybean processor, and has cocoa and chocolate operations on four continents.

JBS – headquartered in Greenly, CO., JBS USA is the American offshoot of Brazilian meat producers JBS S.A., which is the largest beef packer in the world, with 54 processing plants on four continents. $64 billion in sales 2021 for the USA sector.

JBS USA bought Swift (the third-largest packer) in 2007, then bought Smithfield (the fifth-largest packer and largest U.S. feedlot owner) in 2008, then bought Pilgrim’s Pride, the largest chicken processor, in 2009. The company tried to buy National Beef Packing Co. in 2008, but the U.S. Department of Justice opposed the acquisition. The parent company, Brazil-based JBS S.A., is the largest beef packer in the world, with 54 processing plants on four continents. 

Smithfield is no longer owned by JBS. In 2013, Smithfield Foods, the world’s largest pork producer, was acquired by a Chinese firm, ‘Shuanghui International’ (now known as W.H. Group), for nearly $5 billion – 30% more than the company’s market value. Leaving many with concerns that the Chinese government was a hidden player in this deal. A foreign country who is not very fond of the USA, now owns 25% of our pork industry. 

JBS was recently investigated for hiring a food processing company cleaning service employing more than 100 children including some as young as 13 years old. The underage workers worked overnight shifts during which some suffered chemical burns, cleaned extremely dangerous equipment such as razor sharp bone saws, while also being enrolled in school during the day.

JBS has a reputation among ranchers for being the most aggressive of The Big 4. They recently appointed the previous head of the FTC’s Bureau of Competition as their general legal counsel. This took place after JBS avoided a series of antitrust class action lawsuits (all ending with settlements), and created serious questions with regard to antitrust regulation.

In 2020, the Brazilian brothers who run JBS, Joesley and Wesley Batista, were ordered to pay $27 million to resolve charges resulting from an extensive bank bribery scheme that took place over multiple years.

National Beef – Kansas City, MO. $11.7 billion for 2021. Controlled by Brazilian beef producer, Marfrig Global Foods SA. In June 2018, Marfrig acquired 51 percent of National Beef Packing. Then, in November 2020, Marfrig announced it would acquire another 31% of National Beef from New York City-based investment bank Jefferies Financial Group for $970 million. National Beef, the fourth largest beef processor in the country, is now 80% owned by a company controlled by another nation.

The trend toward foreign ownership makes the beef industry very uneasy. Partly due to the assumption that profits will be unevenly distributed overseas to the owners, and the companies will not have the same obligation to the local communities as U.S. based companies might. Many also say, food security is national security. Would most Americans feel secure if they knew how many massive producers are not based on U.S. soil? 

With some antitrust laws still on the books, many are wondering – how could this happen again? The Packers and Stockyards Act prohibits exactly the kind of consolidation and vertical integration that we see happening amongst the modern big meatpackers. 

In the last two decades, a revolving door has swung between the meatpackers’ biggest lobbying firm, the North American Meat Institute (NAMI) and the USDA. For example, NAMI’s Director of Product Marketing worked for the USDA for 37 years before joining the lobbying group. Their Senior Vice President for International Affairs worked for the USDA for 29 years. 

Since the USDA oversees The Packers and Stockyards Act, it seems plausible that these close ties to NAMI are preventing effective regulation. In addition to the many lifelong USDA employees now working for this lobbying firm, NAMI also makes large campaign contributions in exchange for the power to nominate their people to key positions, to ensure only some rules apply to them. Big Meat is all of a sudden starting to resemble Big Pharma…

Part 3 Sources: LPEProject.org, HCN.org, PBS.org, Fortune.com, TheCounter.org, MeatPoultry.com, Prospect.org