STOP THE PRICE GOUGING BY MEAT PACKERS BEFORE THEY DRIVE THE FAMILY FARM OUT OF BUSINESS.
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FAMILY CATTLE FARMS IN DANGER!
Monday March 15, 2020
ALL OUR BEEF WILL SOON COME FROM THIRD WORLD COUNTRIES UNLESS CONGRESS INTERVENES QUICKLY.
In light of the revelation during the COVID-19 crisis, that China may supply up to 95% of our antibiotics, congress is considering ways to protect our national security going forward. Congress is also providing assistance to industries directly impacted by the situation.
We want to point out that there is another industry being impacted, that may be of equal if not greater importance and it involves our food. It needs to be addressed before it is too late.
Live cattle prices have dropped 30.47% since the first of the year from levels that were marginally profitable to current levels that are less than cost and producers are guaranteed to lose money. Each year, American farmers produce 39 million cattle that are processed netting thirty billion pounds of beef. This domestic source of protein is in danger of going to foreign markets. A lot of these countries are third world with little or no control over the use of chemicals and the way cattle are treated.
But first let’s look at some comparisons: The latest statistics show that there are 2.2 million farms in the United States today. Since most of those are small family farms where family labor is “free”, if you will, thus not reported to Bureau of Labor and Statistics. Therefore, exact statistics are not available. But it is easy to conservatively estimate they employ at least 4 million people. This compares to 750,000 in the airline Industry, 296,000 in the pharmaceutical and medicine manufacturing and 234,000 in the cruise ship industry. Even the hotel industry that employs approximately 1.5 million is dwarfed in comparison to the farmer.
The number of farmers raising cattle nearly doubles the employees of hotels, airlines, cruise ships and pharmaceutical manufacturing combined. Farmers are known to be independent, fiercely loyal and voracious voters.
The production of cattle is a substantial and a vital industry that is in danger. Currently, 13% of our beef is imported (3.9 billion pounds). This figure is increasing rapidly while the number of farms decreases annually. Let’s assume it’s because the packers can buy it cheaper. As cattle producers quit the business we will just import more and more. Pretty soon we are just as dependent on countries with sweatshop labor, cruel animal treatment and no health standards for our food.
We are not looking for price supports or subsidies. We have always been independent that way. What we want is fair treatment and protection against semi-monopolies. For example, while live cattle prices, the price the farmer is paid for his cattle, was dropping 30% to nearly $0.86 per lb., the Average Fresh Beef Index, the average price of all cuts of beef folks pay in the grocery store, is up slightly to $5.94 per lb.
So, while the farmer’s selling price has fallen below his cost, someone in the food distribution chain is reaping a windfall of 30% or better.
That someone is the packers!
Only FOUR meat packers control over 80% of the 30 billion pounds of beef processed. At least three of these packers are multinational with a great deal of foreign ownership. While it is difficult to prove collusion, they definitely control the prices they pay the farmer.
More than appalling is the price gouging they are doing during America’s time of need. Meat counters are cleaned out within minutes of the grocer filling them while they disguise their gouging by raising their prices just a little, but they increase their profits driving down the price they pay the farmer.
They don’t care if they destroy the family farm, however. They know they can replace the beef from foreign markets, but look where that got us on surgical masks, ventilators and medicine.
Let’s not wake up in a year or two and find ourselves in another China situation. The time to fix it is now, while it is relatively easy to handle.
We are asking President Trump and congress to have the Justice Department investigate the big four packers under antitrust laws already on the books.
No new laws have to be enacted which we all know takes forever and even longer now that congress is dealing with COVI - 19. It is my opinion that this is the fastest way to get relief.
In the United States, antitrust law is a collection of federal and state government laws that regulates the conduct and organization of business corporations, generally to promote competition for the benefit of consumers. The main statutes are the Sherman Act of 1890, the Clayton Act of 1914 and the Federal Trade Commission Act of 1914. These Acts serve three major functions. First, Section 1 of the Sherman Act prohibits price-fixing and the operation of cartels, and prohibits other collusive practices that unreasonably restrain trade. Second, Section 7 of the Clayton Act restricts the mergers and acquisitions of organizations that would likely substantially lessen competition. Third, Section 2 of the Sherman Act prohibits the abuse of monopoly power.
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