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THE CORPORATE INVASION OF AMERICAN AGRICULTURE

To continue with another metaphor, we should not wait until the horse is stolen before we try to lock the barn door. What we need to examine are the forces at work... the tax breaks that city farmers are getting, the interference and manipulation of the market that is occurring as a result of integration of production and processing and retailing. Then we need to ask ourselves: What trend is suggested by these forces? And is this the direction we want American agriculture to go?

Evidence is available now to show what the results of this corporate invasion of agriculture will be. Indeed, the results are already occurring. They are:

1. Consumers are being put at the mercy of a depersonalized monopoly. 2. A further concentration of political power is being created that is causing other problems in the society.

3. Our natural resources of land and water are moving into hands that are abusing them and will ultimately destroy them.

4. A social and economic reservoir that can never be replaced is being destroyed as our rural communities are being erased.

CHAPTER II

THEY INTERFERE WITH OUR MARKETS

There is grandeur about Denver at dawn. The light descends among the towers of the city. Westward, looming close, the great mountains stand, their jagged snow-covered peaks scratching at the belly of the stone-colored clouds. A cab driver sleeps in front of the Denver Hilton and jumps awake when you tap on the glass.

The city is already beginning to move, its energy stirring, as you drive along the streets. People are on their way to open doors and valves and switches so that the full flow of commerce can fill the arteries of the city.

But in the northern part of the city a strange silence hangs over the Denver Union Stock Yards. Parking areas around the brick cube of the building are empty. Few trucks are visible; there is none of the growl and hum and scrape, nor even the heavy smell, once so characteristic of stockyards throughout the Nation.

Three men stand in the large echoing lobby of the stockyards office building, talking desultorily. They turn and look disinterestedly as you enter; then continue talking. It is ten minutes until seven and the door of the office of the Denver Union Stock Yards Company is locked and dark.

Somewhere a door slams or something is dropped. The sound rattles emptily in the caverns of the building. Where is everybody?

There is a feeling that a disaster has befallen the world, the kind that is written about in the science fiction stories . . . a man goes into the streets of a great city and finds nobody, because a plague or other catastrophe has depopulated the earth.

And, indeed, the feeling is well founded. A disaster has occurred... in this decade, in this setting, in Denver, Colorado.

It is a commercial disaster of proportions that have not yet been assessed. An invader has struck, leaving behind the ruins of one of America's great commercial institutions. To be sure, the buildings still stand--but they have been gutted of their purpose. This was a market, a competitive market, an institution that was a foundation stone of the livestock industry.

Waiting for, John O'Dea, the President of the stockyards to arrive, you

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THE CORPORATE INVASION OF AMERICAN AGRICULTURE

talk to Dana Malchow, engineer for the company, who has arrived early. The story emerges. You have seen part of it written on the large blackboard in the lobby.

200 cattle? 800 hogs? Malchow said, "That's right.”

The Denver livestock market has been destroyed. How could it happen? You wait for O'Dea. What kind of man presides over the dissolution of such a vast enterprise? It is 124 acres of land, a tremendous value in real estate alone, served by six railroads and two interstate highways. It adjoins the great National Western Livestock Show Ground. What kind of man? . . . an old man who (as they accuse the farmer) is unable to change with the times, an impractical man, a fool?

The thoughts disappear when O'Dea arrives. He is a tall, well-built, surprisingly young, man. There is vitality about him, and intelligence.

What happened?

He does not speak for a moment, searching for the right words. How do you tell such a story? "Let's eat breakfast," he says. You go into the restaurant. A dozen men are there, four or five sitting around a table in one corner, two in a booth, another four or five at another table. There is no feeling in the room of rush to end breakfast.

"To answer your question," says O'Dea, "I know you have heard the story before. The big feedlots in this area are feeding the cattle. We believe that 25 feedlots are feeding 90 percent of the supply of cattle, and they deal directly with the packing houses... There's more to the story, of course. We saw it coming. We told the entire story in 'Low Man on the Totem Pole' back in 1962." And indeed they did tell the story--O'Dea and W. C. Crew, now Chairman of the Stock Yards board.

Knowing what was happening was simply not enough. It is true of the farmer, as it was true here. What the farmer faces--and what the Denver stock market faced--is a force over which there is no effective control. It is a corporate force, whose productive assets developed, as Andrew Hacker said, "new interests" and "new demands" to be fulfilled.

THEY INTERFERE WITH OUR MARKETS

What was the strategic significance of this successful assault?

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A terminal livestock market is the only competitive arena in which the farmer's livestock can be sold. This was recognized at least a thousand years ago, when a law was in effect in Constantinople, designed to preserve for the farmers the fullest competition on this market. The regulation said:

"The butchers shall not go out to meet the drovers who bring their flocks for sale, in order that they may buy the meat more cheaply, and that due profit fall to those who slaughter the sheep and not to the drovers. All who are caught disobeying these ordinaces shall be beaten and banished."

In England they called such direct buying "forestalling the market" and made it an offense punishable by law. Whatever the term used, it simply meant evading competition in the market place.

In Denver, Crew and O'Dea set out the case in their detailed and perceptive study. The exchange of cattle is between the big feedlot operator and the packer. The seat of the power is in the supermarket. And the supermarkets are making enormous profits on meat.

Here's what Crew and O'Dea said (in 1962) while they were still in business, marketing 787,000 cattle and calves that year (they marketed 1,034,000 in 1956).

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... The meat industry is now threatened with integration into a vast food distribution system controlled and administered by large corporate and cooperative chains capable of administering prices throughout their entire spectrum. By such integration, the decisions and rewards that were once properly the prerogatives of countless ranches, feeders, packers and processors, and myriads of retailers, would be delegated to a handful of corporate individuals who evince little, if any, concern for, or responsibility to the meat industry; or to the overall agricultural economy which makes their prosperity possible."

All that they predicted has now come true, for them. And it is spreading like a malignancy to other markets.

The supermarkets developed "new interests... new demands."

The biggest gun in the supermarket assault is at the meat counter. Red meat. This is the item housewives spend most of their money for. It is a fast turnover item. In no department of the food industry is the axiom more

accurate:

The supermarket is dealing with a producer who must sell, and a consumer who must buy.

Remember this, because we will return to it again.

It is no accident that the corporate invasion would select the food industry

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THE CORPORATE INVASION OF AMERICAN AGRICULTURE

itself; and then, probing for the weakest sector, that it would choose the meat counter.

The fifth column on which the supermarket relies is the consumer, of whom the food chain spokesmen speak patronizingly as "Madam Queen.” They refer to her as the omnipotent and infallible ruler of supermarket destinies. In reality, she is their slave. She spends more than $72 billion a year for food, most of it in food chain supermarkets.

By her allegedly informed and unerring purchase of food items on a "best value" basis, the supermarkets flatteringly say she effectively sets the price of everything she buys.

But Crew and O'Dea said:

"Colorful and romantic as this concept might be, it is patently false. In reality, the American housewife (for it is she who is the physical embodiment of the glorified consumer) is a somewhat confused and captive 'purchasing agent.' Food is the largest single item in her family budget and red meats are the largest single item of the food budget. But the prices she pays are ‘administered' by the food chains, and her choices largely are pre-determined by their calculated merchandising tactics."

Although Crew and O'Dea said it sooner, they were joined in their position by the National Commission on Food Marketing in 1966. In what may be the dullest and most restrained prose in the history of a subject noted for dullness and restraint, the Commission noted with suprising animation:

"Consumers are powerfully influenced by advertising and persistently pay premium prices for much-advertised brands when products of similar quality --sometimes the identical product--are available at lower prices. Impulse buying is common. For some, novelty is an end in itself. Children make a number of purchasing decisions."

The Commission noted that some advertising is misleading or downright deceptive; some package sizes and designs exaggerate the contents; essential information that should be contained in labels is often hard to find, illegible, or even missing; package contents may be in odd or non-standard amounts for no tehcnical reason, making price comparisons difficult; consumer grades are confusing; etc.

Far from being "unerring," Madam Queen needs help, the Commission said. The situation is so grave that the Commission recommended:

1. Consumer grades should be developed and required to appear on all foods for which such grades are feasible, that are sold in substantial volume to consumers, and that belong to a recognized product category.

2. The Food and Drug Administration should establish standards of

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