Now, jump ahead today. We've wiped out over half of all the beef cattle operations in business just over a generation ago. We've lost 52% of them. We've wiped out 25% of our mother cow beef herd. And the four largest packers controlled today about 80% of the marketplace. And consumers in 2024 paid about $823 per pound for beef. In 2021, the packer and the retailer received over 60% or 60 cents of every consumer beef dollar and the producer received less than 40 cents. So here's this here's the question. How in a competitive market could that have happened? How could a competitive forces in the marketplace completely reversed the competitive allocation of the consumer beef dollar within the entire beef supply chain? The answer to that question is it can't.

Hello and [music] welcome to another episode of the All Thoughts podcast. I'm Tracy Aloway

and I'm Joe Weisenthal.

Joe, what do you eat more of? Eggs or [music] beef?

You know, I was just thinking um I want to eat more beef in my my life. I probably do eat more eggs ultimately, but like beef is just so good. Beef is the best food there is in the entire world. I truly believe that. And every time I eat beef, I think about why don't I eat this all the time? It's so good. It's so satisfying. All these nutrients. I don't have this impulse to snack and eat garbage afterwards.

I want to eat more beef.

I'm pretty sure I eat more beef than eggs at this point. Like I will have the occasional omelette and I mix a lot of eggs into like Asian noodle dishes and things like that, but not that. I aspire to live the Tracy to have the Tracy Aloay diet.

Okay. Well, speaking of beef,

except it's really expensive these days.

Yes, this is exactly it. So, I'm sure everyone listening to this podcast at this point has heard about rising beef prices in the US. There are a lot of headlines flying around constantly in recent days about this. So, for instance, we're recording this on October 30th, and earlier this week, President Trump was tweeting about how he wants beef prices to be lower. He's also been talking about buying beef from Argentina. Yeah,

it is very much in the news. There's also the whole soybean drama with China.

I think it's funny because in that Trump post, she said, uh, cattle ranchers should appreciate how good things are going because high beef prices, but bring them down. Um there is just a lot and I've said this before on the show which is that I think the ultimate marker of civilization is the amount of beef or protein that you can buy with an hour's work that the median person or the average person can buy with an hour's work. And I think when it's going backwards, we should be very disturbed. So setting aside, you know, I'm very fortunate. I could probably afford to eat as much beef as I want. But the price of ground beef, I'm looking it up on the uh terminal now. It's like tripled since 2010. that there's like $4 around the pandemic. Now it's over $6. I think these are extremely serious issues.

I will say I don't think we need to be quite as obsessed with protein. Americans especially, we already eat a lot of protein. Okay. Eat more fiber.

I'm not saying we need to be obsessed. Actually, I do think the protein craze may be a little out of hand. I just think this is like a very good measure of the advance of sort of a wealthy society that protein gets more affordable.

I'm going to get you a cow share for Christmas. Thank you.

All right. Uh, well, I am happy to say we do in fact have the perfect guest. We're going to be speaking with Bill Bullard. He is the CEO of Arafe USA. So, Bill, thank you so much for coming on Odd Thoughts.

Glad to be here. Thank you.

Thank you also for actually looking the part of a cattle rancher. We really appreciate that.

No one can deny that we're talking to the perfect guest.

All right. So, why don't we start really simple? What have you observed about beef prices just you know in the past few months or so?

Well, we've seen beef prices increasing as you've indicated and we see cattle pricing also increasing as you indicated. So, we now have a positive relationship between the price of beef and the price of cattle and we are a competitive ind industry. We do not rely on government price supports. We're the single largest segment of American agriculture. The cattle industry gener generates about a hundred billion dollars a year in cash receipts. So it's it's larger than any other commodity. Corn, wheat, cotton, dairy. Um and and we rely on competitive market forces, but we have not had competitive market forces until very recently. And that's where we need to get into the history of why beef prices are high.

Can I ask very quickly? You said there's now a positive relationship between cattle prices and beef prices. Is that not always the case?

That certainly has not been the case, especially since uh 2015. We saw an inverse relationship. We saw beef prices heading skyward beginning in [clears throat] 2017. And while beef prices were increasing, cattle prices were falling. And this is really odd in an industry where the only ingredient in beef is cattle. So you would expect there to be a harmonious synchronous relationship, a positive relationship between beef prices and cattle prices.

One of the things I discovered on the terminal back during the pandemic. I learned all these things. We actually have an in uh index on the um terminal the hedgers have the hedgers edge beef packer margin which I imagine to some extent reflects that spread and um we do see it rise generally up really through 2021 uh it's actually started to compress quite a bit but just actually uh why is that like what what explain uh what explains why these things can move in different directions what is the added factor in the price of beef that is not the price of cattle.

Right? So let's go back to just over a generation. We'll go back to 1980. Great. At the time we had 1.3 million beef cattle farmers and ranchers in the United States. We had about 37 million cows in our mother cow herd. Beef prices that consumers paid were about $2.40 per pound. And we at that time we had the four largest packers in the industry controlling 36% of the industry. So if we think about how the beef industry works, it's the consumer beef dollar that has to be allocated along the entire supply chain. So back in 1980, every time a consumer spent a dollar on on beef, that dollar was allocated by competitive market forces and over 60 cents of that dollar went back to the live cattle producer, the farmer and rancher and the cattle feeder. And less than 40 cents went back to the processing part of the beef industry, and that's to the retailer and the packer. So the producer was receiving the majority share which made sense because they kept that animal and uh for 15 to 18 months before it was slaughtered and converted to beef and the beef packer only kept the animal for about seven days and the retailer kept it for the shortest amount of period possible. So but the point was is that when consumers were paying $2.40 40 cents per pound for beef. 60 cents of that dollar was going back to the producer and only less than 40 40 cents was going back to the processor and the retailer.

Now jump ahead today. We've wiped out over half of all the beef cattle operations in business just over a generation ago. We've lost 52% of them. We've wiped out 25% of our mother cow beef herd. And the four largest packers control today about 80% of the marketplace. And consumers in 2024 paid about $823 cents per pound for beef. And now in 2020 or 2021, just a couple years ago, the allocation that the competitive market was making in the marketplace was completely tipped on its head. In 2021, the packer and the retailer received over 60% or 60 cents of every consumer beef dollar and the producer received less than 40 cents. So here's this here's the question. How in a competitive market could that have happened? How could a competitive forces in the marketplace completely reversed the competitive allocation of the consumer beef dollar within the entire beef supply chain? The answer to that question is it can't. If our market was competitive, that could never have happened. That raises the concerns that we've been uh struggling with for the past several decades. Our industry is in a state of crisis, and it has been.

And what has happened is is because of industry concentration and consolidation, the ability of the multinational meatackers and retailers to exert buying power upstream in the supply chain, and the fact that we've entered free trade agreements that have allowed the meat packers and retailers to access beef from around the world and displace domestic production because the beef that we import from Argentina, Brazil, Uruguay, Nicaragua, Costa Costa Rica, Australia, New Zealand, Canada, and Mexico. It's a perfect substitute for domestic product. So the more we import, the less we have the ability and capacity to maintain domestic production of this very important protein source, which is beef. And so what we see today is a dysfunctional marketplace. As I described before, since 2017, we saw beef prices going up that consumers were paying in the retail store. We saw cattle prices going down. The latest census shows that just in the 5-year period from 2017 to 2022, we lost 106,000 beef cattle operations. Farmers and ranchers exited the industry during that period. And the reason that that's happened is because they've suffered long-term lack of profitability. It's because their market is dysfunctional. It's because imports have displaced our domestic production and our opportunity to expand. And now we've hit a a huge market shock, an economic shock to the market. And that was the latest drought that occurred in the latter part of 20120.

This is what I was going to ask. So just to we're going to talk more about industry consolidation for sure. And um you know, I'm looking for instance at a headline right now about Walmart tightening its grip on the beef market by setting up a new plant. But just to play devil's advocate for a second, h how much of this is just down to pure input costs like grain going up or you know the drought that you just mentioned or labor costs

at least especially the move that we've seen over the last year which I'm sure which cannot obviously be explained by multi-deade trends

By multi-de a multi-deade trend I believe that is real etc. But let's talk about some of these things that have happened in the last year specifically or the last whatever 18 months.

So what we've seen is our cattle supplies have tightened to the lowest levels in 75 years. We have extremely tight supply situation but we have incredibly strong beef demand. Consumers willingness to pay for beef appears unbounded. As prices have increased, consumers have still cleared the grocery store shelves with the product. And so the latest the latest drought that occurred had accelerated the ongoing liquidation of our US beef cattle or beef cattle inventory. And and that's why our supplies are so tight. Uh and yet you've got incredible consumer demand for beef. And so we have seen a spike in prices because of that strong demand. Consumers continue to be willing to pay more for beef. And but that is not how our market has been functioning for the past decade.

Let's say the rain come back, there's no drought, etc. What are we talking about for a timeline? Again, setting aside the structural things, what do we talk about for a realistic timeline for getting back to where we think like, oh, we are comfortable with the level of cattle stock that we we are happy with the level of cattle stock that we have in this country,

right? So we currently produce about three billion pounds less beef than what is consumed in America. So the largest segment of American agriculture actually underproduces for the domestic market. And because of the long biological cycle of cattle, it takes about three years to decide to hold back cattle to breed and then to have a calf and then to raise that calf to slaughter weight over a period of 15 to 18 months. And so in order for our industry to begin an expansion phase, uh we would need a price point that incentivizes producers to make the investment to build the herd. And unfortunately that that price point occurred back around 2023. We should be in an aggressive expansion phase now except that instead of uh domestic consumers relying on US producers, we've increased the volume of beef imports to record volumes in 2024. That's displacing our domestic production. And that increase of of imports is not distinguished in the marketplace. Consumers can't tell if the beef they're buying is foreign beef or domestic beef. H

that puts the power and control in the hands of the packers and the importers and retailers. So your question was how much of this had to do with increase in input costs? Well, the increase in input costs reduces the the margin that US cattle producers receive at at any given price point and we've seen increased production costs certainly. But the point is is that cattle producers do not set the price of beef. This the price of beef is set by the packers and the retailers who sell to the consumer. The producer is a price taker in this market and has been for decades. They have cattle, they offer them for sale, they accept or reject a bid by the packer and they're producing a perishable product. So when an animal is ready for slaughter, ready to be fabricated into a beef product, the producer who fed that cattle has a week or a two to three week window in which to market the animal. Otherwise, it degrades in quality. Uh it adds fat instead of muscle. And as a result, the producer has um very limited bargaining power in a highly concentrated market as we have now. And when they're selling into a market that's controlled where forked packers control 80% of the market, uh they they are uh victims of the abuse of market power that emanates uh inherently from such a highly concentrated marketing structure. So the so the increase production costs reduce the profitability of producers but it doesn't it doesn't affect the producers's ability to market cattle. uh that would be the demand for live cattle and the demand for live cattle is offset and undercut by increased volumes of imports.

What's the relationship between beef availability and dair the dairy industry dairy cows? So one of the reason I bring it up you look confused but the reason I bring it up is because again Joe's going to get sick of me mentioning this but I've been reading this like 70year-old book on small-cale farming. I hate when people are always bringing up books that they've read.

I know. It's crazy.

Re was bring it up one. No, that's a joke.

And you know, there's a chapter in it about whether or not you want to go into cattle farming. So, or cattle ranching for beef or if you want to raise dairy cows. And one of the things that you learn from this is that every dairy cow usually becomes a beef cow at some point. once it reaches you know once its milk production starts to dry up it usually gets sold for slaughter. So what's what's the relationship or the interaction like there?

Well historically what you described is true as the dairy animals uh have exceeded their production lifespan. They are marketed as call animals into the beef supply chain. And uh it's a very lean meat product that is mixed with the higher quality trim that we obtain over our grainfed animals that are fed in feed lots produced exclusively for beef. So there wasn't much competition between the beef industry and and the dairy industry. But here recently as we've increased our technology and genetic cap abilities uh we have begun to raise uh more male beh dairy animals and are bringing them into feed lots and feeding those animals and they are now beginning to compete with the beef cattle farmer and rancher in the marketplace and this is a relatively recent phenomena uh that's been occurring in our industry.

Wait, why is that happening?

Yeah, say more. Well,

it's happening because there's there's a profit opportunity uh to sell dairy cles into the beef supply chain and uh and of course that will compete directly with our America's farmers and ranchers who not only will have to now compete with this increase in the the dairy beef sector, but they're already dealing with this undifferentiated cheaper import flood uh that has been negatively affecting their p profitability in this industry.

say a little bit more about okay cattle prices have gone up and so in theory that as you said in theory that should uh incentve investment etc but talk a little bit more about some of the input costs that a cattle rancher faces making these decisions to expand this their stock.

So, so one of the first factors is the availability of sufficient land to raise the animal because in the beef cattle industry, the animal is primarily raised on grass. uh after an an after a calf is born and it suckles the mother for about four to six months on grass and before it is moved uh downstream in the supply chain to become a yearling animal and ultimately delivered to a feed lot where it's fed until it slaughter weight. And so the input costs include the fuel uh with which to run an operation. It includes the veterary expenses for keeping your animals healthy. It includes the land costs of maintaining sufficient forage supplies for the animal. It includes the cost of equipment to put up hay and grain with which to feed those cattle. Uh and it in many instances it includes labor. However, most of the family farm and ranches here in the United States are just that. their family farms and ranches uh attempting to raise cattle and they they're experiencing increased input costs. You know, we could talk about fertilizer costs too as well,

but uh ultimately the costs have increased due to inflation. Yeah.

And that squeezes the margin that they receive at whatever price point that they're experiencing. In terms of industry consolidation, the fact that there are basically, you know, four gatekeepers to beef processing in the US, how did we actually get here?

Well, we got here because we were lax in enforcing our US antirust laws, uh, the Sherman Act of 1890, the Clayton Act, I think it was about 1914.

Sorry. The last time we spoke about uh eggs in a big series about chicken, uh we talked a lot about antitrust,

And and in addition to that, Congress realized over 100 years ago that independent livestock producers uh were really vulnerable to the monopsin power, the buying power of the concentrated meat packers. So they passed what was called the Packers and Stockyards Act of 1921.

And this this was to ensure that the meatackers not only could they not engage in anti- trust activities such as monopolization uh and price fixing, but this act also said they couldn't engage in practices of procuring livestock from producers that was patently unfair. Um, and so this important act actually helped to uh bolster the United States ability to to ensure antirust violations were not incurring in the marketplace and it gave the independent producer recourse in the event that they were treated unfairly or deceptively by the concentrated market. The problem is just like our antirust laws that collected dust on the shelf, so too did the Packers and Stockyards Act. And yet today, the US Department of Agriculture has not promagated the rules necessary in order to implement and enforce this over 100-year-old Packers and Stockyards Act that was intended to protect independent livestock producers from the abuse of market power of the dominant beef packers.

Do the children of ranchers want to become ranchers? Uh there is a there's a popular country song that came out in 2023 by Cody Johnson called Dirt Cheap. The entire premise of the song is about this dad and he this real estate developer offers him all this land and he's about to take the money and then he gets sad thinking about his kids will never be running around on this and when I hear the song I got a little cynical I was like yeah but that daughter is going to sell the land when she gets older so what's this like she's going to move to a big city but are there issues in your industry of like the next generation of ranchers like no I want to sell this land to a data center or I want to sell this land to a housing subdivision so that I can I go work in finance in New York City.

When you have an industry like ours that has lost over half its participants in the course of just over a generation.

Yeah.

It's not unsurprising that the average age of the US farmer and rancher is now somewhere north of 58 years of age.

Wow.

And one of and we hear anecdotal information all the time about ranch families who have struggled under a economic cost price squeeze for decades. their children have watched. They've encouraged their children to do something else other than to ranch. And that's a huge problem that we have because part of this expansion expansion phase will require us to attract new entrance to attract aspiring cattle farmers and ranchers into the industry. That's not happening. And even though I said that the price point has was sufficient to incentivize the expansion uh over a year ago, we're not expanding. And we're not expanding because our cattle producers have recently witnessed a complete collapse in cattle prices when we were about where we're at today. And that was just as recently as 2014 and 15. At that time, we had the highest nominal cattle prices in the history of our industry. And beef consumers were then paying the highest nominal beef prices in history. And every analyst, government and private alike, said the cattle producer is going to receive another three years of very strong prices because of that long biological cycle.

This is a very, this strikes me as a very important uh data point. The fact that the rancher has been trained essentially to expect that high prices won't necessarily sustain themselves, right? You could

the boom bust.

Yeah, the boom bust. We talk about this across industries. It's like great that the price is there, but are is the price going to be there in three years when uh that when that cow is ready to be sold for meat? It's a very it's it's not enough to just have temporarily high prices.

Well, well, that's right. And that's exactly what happened at the end of 2014. In 2015, when everyone believed that our cattle prices would stay strong, they inexplicably collapsed. And they collapsed further and faster than any time in history. And they collapsed until we hit that point of 2017 when suddenly consumer demand was driving beef prices higher and the meat packers were paying less and less for cattle or cattle prices. And so we had this inverse completely dysfunctional situation in the marketplace and producers were hurting. That's the period we lost 106,000 producers from 2017 to 2022. And only now after this latest drought that we shrunk the herd size to such an ultra- low level have we seen the cattle prices begin to once again respond favorably to the latent forces of competition in the industry. They began to chase beef prices upward and we've seen that uh more acutely here in the last couple few months uh as beef prices have increased. But the the fact is is that we have not enforced antitrust laws. And what we need to do now is determine to what extent are today's beef prices caused by antirust behavior in the marketplace. Not from the cattle producer who's a price taker in the marketplace, but by the multinational beef packers and retailers that are actually controlling the beef market here in the United States.

Well, speaking of that and expansion, one thing we have seen is new entrance, new corporate entrance moving into the beef industry. And I mentioned Walmart earlier. What's the thinking behind that? Is it just a vertical integration play or what's the additive for a company like Walmart to get into beef?

Well, you think about our all of our livestock sector. So, we'll start with the poultry sector. That sector was vertically integrated in the 60s and 70s from egg to plate. It's the corporations, what we call the integrators were controlling the production. The farmers own their farms and ranchers. They invested in the capital, but the integrators dictated how the farmers would raise those chickens. In fact, the integrator owned the chickens and essentially hired the uh farmer to raise them for for the integrator. That model was then applied in the 80s and 90s to our hog sector. Back in 1980 when we had 1.3 million cattle producers, we also had 667,000 hog producers scattered all across the United States raising hogs. Uh but today we're down to 65,000. We wiped out 90% of our hog producers because that industry, the corporations involved in that industry began to follow the chicken model. And so we reduced the number of participants and they began to raise hogs under a highly concentrated situation and it's completely vertical vertically integrated from birth to plate. The cattle industry is the last frontier frontier for these major global meatackers. Uh and it's because of the forage requirements and the long biological cycle of cattle that has has prevented them from engaging in the vertical integration model which we call chickenization. and we're trying to prevent the chickenization of our cattle industry. Uh but the reason Walmart's getting into it is because it's profitable. So Walmart has decided it's going to vertically integrate the beef cattle industry. It's going to direct what genetics a farmer rancher has to uh use in order to raise the animal. Walmart will dictate the production practices and feeding and then Walmart will provide the marketing outlet for the producers and then Walmart will sell that resulted beef product to the consumer.

It really is chickenization. It's the tournament system basically.

Well, and it will lead to that. So, the tournament system is a pricing mechanism that greatly benefits the integrator and allows them to buy the chickens from the farmer and pay less for their managerial skills in raising the chicken for them. Um, and that's that's a concern we have with the Walmart model. Walmart wants to lock up uh this segment of the beef industry and they want to eliminate u all these cattle producers just have been eliminated. Hog producers were eliminated in the hog industry and poultry producers were eliminated. And the first step in the process is you do away with you eliminate the competitive cash market. That's what allows them to vertically integrate an industry. And we're seeing in that in the cattle industry. Our cash market has been shrinking at an alarming rate. And as we allow this to continue, we will soon see even more vertical integration. What this means is we're going to hollow out rural communities all across America just as we have been doing for the past four decades. And that's because we will eliminate profitable opportunities for our independent familycale farmers and ranchers uh by eliminating their cash market by dismantling the competitive infrastructure and simply handing the industry over to a highly sens centralized highly concentrated beef packing and retailing industry.

Uh I'm going to ve veer into some sensitive territory here. I don't know anything about how you lean politically. I also don't particularly care. It's fine. All that being said, I think that, you know, I have stereotypes and I think if I imagine what the typical uh cattle rancher, how they are politically, guy wearing a cowboy hat, speaking with a a country accent, I would have a presumption about how they might vote in a typical again, not you specifically, but you know, I have my stereotypes, etc. And they're probably true. Has the current administration, you know, talking he's been talking to you guys via his truth social account. He wants to to lower prices but also appreciate him for the high prices. A little unclear. He was this current administration uh been a friend to the uh to the independent cattle rancher. Well, what independent cattle producers needed is they needed our imports to be managed, not to hand to the meat packers the ability to source whatever volume of imports they want to displace our domestic production to prevent our domestic production from keeping up with growth growth in population, which is what has occurred here. And so what we needed was uh the implementation of tariffs and tariff rate quotas on countries that persistently maintain a trade surplus with with the United States. In other words, countries from which we buy large volumes of beef, but we sell to them very little. So we have been calling for tariffs and tariff rate quotas and tariff rate quotas of course are limits on the volume of beef that any country can um export to the United States.

And so when President Trump uh took his second term, that's the first thing he began doing was imposing tariffs. And for an industry that underproduces in the domestic market, we need the tariffs to provide our industry the space to expand and increase production. So we strongly supported the tariffs. When we saw Brazilian imports absolutely explode in 2025 and even last year, we were thankful that the president imposed a 50% tariff on Brazilian uh exports of beef because that that was going to further keep our industry a wash in these price depressing imports. [clears throat] Uh so but when the president announced this u idea to lower consumer beef prices with by increasing Argentinian Argentina's beef uh import quoter rate we believe that he was misguided. He was misinformed as to how the market structure worked. I don't think he was aware that our industry has just gone through years of depressed prices while consumers were experiencing record beef prices. I don't think he understood how severe the lack of antitrust enforcement has adversely affected our industry and caused our industry to shrink.

And so, uh, producers are very, very concerned right now because we're at the price point where we should be expanding. But we're not expanding as we should be because of the concern for the uh, market failure in our industry that has not been corrected. It's because we're not certain anymore whether the president is in fact going to begin to manage these imports or if he was just going to let these packers continue to import whatever volume of beef and cattle they want to displace our domestic production. And they do this without informing consumers where that beef is from. There is no country of origin label on the imported beef product. So consumers can't choose to support the domestic supply chain versus the foreign supply chain. And that's why we're urging Congress to pass mandatory country of origin labeling immediately. And I think this will help to at least mitigate the negative impact that increased imports from Argentina will have on our industry because then we can go to the consumer and ask them them to choose the higher quality USA produced beef and support US cattle farmers and ranchers.

Look, I totally get where you're coming from, but I, you know, I live in New York City and I have children to feed and one of my children loves beef a lot and the vast majority of Americans are not um cattle ranchers um by any stretch. So, like what is the you know, again, I understand that you have a uh constituency that you represent. You want to make your case. Why should the ent the vast majority of the country which are beef consumers get no benefit from higher cattle prices, get no benefit from higher beef prices? Why shouldn't we want the either imports uh channel or the Walmart, which frankly has a long history of driving prices down in almost any category they enter. They're sort of famously a lowcost uh seller. Why shouldn't we support these trends?

Well, look at any other sector in the American economy. So we do import large volumes of goods from China for example and a consumer can go to the grocery store and see a chinapriced product labeled as China product or China or they could buy a USA product and typically the USA product is going to cost more. But consumers have a choice. They can choose to purchase the cheaper product if they want to. Now jump to the beef industry. Consumers have no choice. The product is undifferentiated. The meat packers are importing this beef from Australia, New Zealand, and these 20 different countries I talked about earlier. They're importing them cheaper than what we can produce it here, but there's no label on it. What there is on it is a US inspection sticker, leading unsuspecting consumers to believe, well, that must be a domestic product. And so because the consumer can't choose between the cheaper foreign product and the more expensive USA produced product, there's no price saving for the consumer because the packers and the retailers will price it identical because they don't have to distinguish it. So they pocket the increased profitability of buying low and selling high in the most affluent beef uh consuming market in the world and that's the United States of America. That's that's just an example of our dysfunctional market. Consumers have not benefited from these increased volumes of imports. Instead, these increased volumes of imports have reduced demand for our domestic cattle, driving hundreds of thousands of cattle producers out of the industry over the past four decades.

Can I start a beef processing plant? Why why can't I go into it? Like, it seems like a very profitable business. Certainly, if you're a JBS or someone like that, you seem to be making a lot of money. Why don't we have new entrance?

So, you have four packers controlling 80% of the fed cattle market, meaning they also control about 80% of the box beef market, meaning they've got long-term and short-term contracts with the major retailers. They have shelf space with those retailers. So, if you're a small packing plant trying to get started, how are you going to market your beef when you're marketing into such a highly concentrated consolidated market that has where the retailer has long-term contracts with the largest dominant global beef packers? How are you going to access a marketplace? So, we've had lots of smaller meat packers try to start up. It it requires a huge capital outlay to do so. Nevertheless, uh the government actually during the past administration has been encouraging their growth and development. Uh but they're struggling. They're struggling because they have difficulty in marketing their product even if they're marketing a a high quality product. They're marketing into a commodity structured marketplace and the advantage falls to the meat packers. So until and unless we enforce our our market our antitrust laws and our fair competition laws, we will continue to see these upstart experiencing severe difficulty in in finding a profitable marketing outlet for their product.

You know, I like I said, I really like beef. Everyone's into protein these days. We we talked about this recently on another episode. Protein is really hot. Um animal protein in particular is really hot. There's a lot of influencers and people have podcasts and they say things like eat more red meat and our attitudes about red meat have changed. When I was growing up that was scary of don't cut back on your red meat. Now it's like oh red meat is like the healthiest thing you can eat. I don't know if that's true but a lot of people would say that. um how much of the prices that we pay whether it's for the price of cattle or the uh end price of uh ground beef or whatever or steak is about the secular trend towards people wanting to have more animal protein in their diets.

Sure. So I I I think it's a huge factor. I think there are a number of factors contributing to the consumer's increased demand and willingness to pay more for beef. And I think therein lies the answer to the problem. If we enforce our anti antitrust laws and let the market signals flow in our industry, we will begin to expand and our uh production will soon hit an equilibrium with the consumer demand and we would see prices subside. In fact, if consumers are unwilling to pay current prices for beef, they would shift to other protein sources like like lamb, chicken, and pork. and you would see the price point from the retailers begin to fall and you would see uh the high beef prices subside and then uh actually but if the government causes this to happen, if the government interferes and forces the demand for live cattle to decline, we're not going to increase the size of our US cattle herd and America will become increasingly dependent on foreign sources for the beef. Right now at 2024 about 22% of all the beef available in the US market was imported product. And if we look at our ship our sister industry the sheep industry which is the direction our cattle industry is going in 2024 73% of all the lamb consumed in America came from Australia New Zealand. We've we've decimated our domestic sheep industry. Now we're now government has its sights on the cattle industry and increasing imports without any product differentiation in the marketplace will simply exacerbate the ongoing shrinking of our cattle producer in terms of the number of participants, number of cattle, and the number of marketing outlets.

We're going to have to leave it there. Bill Bullard, I just realized Bullard nominative determinism, right?

Excellent. Excellent.

You had to go into cattle ranching. Um, thank you so much for coming on all Thoughts.

My pleasure. Thank you very much.

That was great, Bill. Thank you so much,

Joe. That was really interesting and definitely, you know, closely related to the chicken series that we did. Um, and again, it seems to be that chickenization theme running through agriculture. I hadn't realized that cows, cattle ranching were basically like the last frontier in agriculture

either. And I to be honest, I would have already assumed it had been more or less on that. I actually think the uh the Walmart thing is uh very interesting because um on the one hand people look at an entity like Walmart and it's like here's this monopsiny player. It's going to drive so much power. On the other hand you say here is a new market entrance. This is it's like here is the market has just gotten more competitive. I think it's an interesting gut check for people who want to like think about like market competition that when you read a headline Walmart is going to get into beef processing. Do you read that as like bad or good? Because you asked why aren't there more entrance? Well, here's a new entrant coming in.

I have to say I shop at Walmart. I buy beef. I buy those big Have you ever seen the big like uh long packages of ground beef? They're like this big.

Oh yeah, I love those. Yeah,

they're pretty good actually. I am kind of floored that there's no country of origin label on these. I never thought about that.

I am a little skeptical it would change much [snorts] like if would it not

like it mean like would you would you spend meaningfully more or less on beef presuming you expect that it was like healthier what that it was safely uh arrived.

Yeah. Well, what I would say is I do shop at Walmart, but I shop at Walmart generally for bulk beef. And if I'm looking for the really good stuff, I will go to an independent farmer, of which there are many in Connecticut, and I realize like not everyone has that luxury. And I will try to get the good beef.

Uh, I might try to get the good beef, too. It might come from Japan. Don't they like treat their cows really well? Like they like they like give their cows like beer and all that stuff. Massages.

Yeah. No, I think uh I love talking about animal industry economics. There's a lot of tension. I will say one other thing which is you know I asked that question about like why should we care the beef consuming part the beef consuming part of the world which is the of the country which is the vast majority of the country. The US used to run a very big uh trade surplus and food stuffs. Only very recently in the last couple of years has that turned into deficit. Uh, it's probably a source of some concern to me that like we no longer uh can domestically satisfy all of our food needs.

Oh, if you're worried about domestic semiconductor capacity, then you probably should be worried about food capacity.

I think there are some some overlap issues.

We can't eat the chips, Joe.

Oh, except for potato chips.

Except the except the other chips that we can eat. I don't know. I think there are some I think there are some things to worry about or think about with food that are a little different, a little similar that maybe we should talk about more at some point.

Absolutely. All right. Shall we leave it there?

Let's leave it there.

This has been another episode of the Odd Thoughts podcast. I'm Tracy Aloway. You can follow me at Tracy Aloway

and I'm Joe Wisenthal. You can follow me at the stalwart.

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