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Beefs and Beliefs

Fake meat purveyors want your money

Ksene-iStock-GettyImagesPlus Vegan Burger on a paper wrapper
There are bigger bucks to be made from processed food than from fresh food.
The more processors can process, the more money they seem to make. Fake meat is obviously highly processed.

If you've wondered why the fake meat sellers are maligning you and the entire beef industry, consider their potential profits if they win this gamble.

When I first heard mention of the profit to be made from highly processed foods versus fresh meats -- hence the potential share for the processor -- I immediately remembered "farmer dollar share" data I've seen for many years. Specifically, the farmer share of a food dollar for items such as fresh meats or fresh milk is far higher than for highly processed food items such as bread. Even today the difference is colossal.

I started digging in USDA's Economic Research Service (ERS) numbers and found some very interesting information that might be useful to you. First, here's one blatantly obvious example to which I've already alluded. I'll present you a chart for this and one other comparison just below, but if we use USDA's interactive chart for price spreads and food markets, you'll see bread in 2013 was selling for 346 cents per unit and farmers were getting just over 9 cents of that total. Further, you should note this is after a fairly long upward run in the share processors were getting and in retail prices, while farmer share remained comparatively flat.

This tool is really interesting as you can ask for several other food items and see the farm-to-retail price spread laid out on a graph before you.

USDA-ERSfarm-to-retail price spreads for bread and milk

Look at the difference in price earned by the processors of bread versus fresh milk.

On the chart included here I also placed the whole milk farm-to-retail graph in the middle of the huge divide between bread's farm price and retail price. Milk producers over that 14-year time period received all but 35 to 55 cents of their product's retail value. Now, think about what's happened to the milk markets: Does soy milk or almond milk ring any bells? Would that require more processing?

More to the point for those of us in the beef industry, I found National Farmer's Union keeps a nice graphic adaptation of USDA's ERS food data it calls "The Farmer's Share." On that you can find a retail price for top sirloin of $10.49 with the farmer's share at $1.72. Highly processed cereal, by comparison, is listed as a retail value of $3.39 for an 18-ounce box, with the farmer earning only 5 cents of that total. If these are fairly accurate, then we could say the beef producer is getting 16% of the sirloin dollar, and the wheat or food-corn farmer is getting just over 1% of the cereal dollar.

This beef share on top sirloin steak may be a bit skewed, however, as I found other data from USDA-ERS that showed farmer share of the retail price of the "all fresh beef price" in November 2019 was 42%.

For historical reference I also found a 1935 USDA comparison of farmer share versus retail share of several food items, and it makes today's situation look even worse. It appears over the past 85 years or so, the processor-wholesaler-retailer segment of the industry has been taking much larger shares. For example, USDA said then that beef producers were getting 45% of the retail dollar and wheat farmers were getting 17% of the retail bread dollar. Perhaps we've had too much concentration in the food industry, ya think?

USDA1935 Farm-to-retail price spreads

But I believe the collective circumstantial evidence suggests it's even worse than that. The fake burgers and other highly processed fake meat products are actually being sold for higher prices than the genuine article. It looks like the processors are aiming for an even bigger score. And I think we have long historical precedence they are doing it with malice aforethought.

I believe history tells us big companies, including the food processors are willing to lie about health issues to the consumer. Remember the cholesterol-red-meat scandal that drove red meat consumption down, animal fat consumption down, and begged to replace it with carbohydrates? Remember the lead paint industry worked for many years to hide the dangers of lead in their products? And don't forget about the big pharmaceutical companies that pawned off their liabilities for vaccine damage onto the American taxpayer back in the 1980s and also have been successfully sued many times for "medicinal" products that damaged those who took them on good faith and under a doctor's prescription. There are more stories than that. Surely you can think of several.

Remember that highly-processed and high-carbohydrate foods bring with them many health problems.

So if indeed they don't care about the health or safety of their customers, why would they care about the livelihoods or wellbeing of those involved in the animal industries, such as beef or dairy production?

Now I've shared my suppositions with you, and tried to point you toward some of the evidence I see to support my suspicions. You will need to make up your mind. If you agree, we need to be looking for answers to this problem, and for means of attack.

More information on farmer share of retail dollars can be found at this USDA website.

The opinions of this writer are not necessarily those of Farm Progress/Informa

USDA-ERSUSDA beef price spread 1990-2018

Another graphic from USDA shows the beef retail sector has a growing share of the retail dollar.

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