MARY REICHARD, HOST: It’s Tuesday, June 15, 2021.

You listen The world and all in it and thank you for joining us today. Hello, I am Mary Reichard.

NICK EICHER, HOST: And I’m Nick Eicher. First off, those steaks on your grill.

They will cost you a lot more these days. Overall, the prices of groceries are increasing, and the price of beef in particular. Up 10% from last year. Half of that peak occurred between March and April of this year.

Then a major disruption over Memorial Day weekend. Cyber ​​attackers have forced the world’s largest meat processor to shut down nine factories in the United States. The price of beef rose another percentage point.

REICHARD: But as beef prices go up in stores, it doesn’t trickle down to livestock producers.

It is a model that some believe needs to change. WORLD Reports Sarah Schweinsberg.

AUDIO: [Sound from Don’s Meats]

SARAH SCHWEINSBERG, JOURNALIST: Don’s Meats sells almost every cut of beef, pork and poultry available. Lance Lasater manages the butcher’s shop in Syracuse, Utah.

He says that since March, meat prices have increased, especially beef.

LASATER: T-Bone Steak right now, probably you’re going to be there anywhere depending on the week. I don’t know $ 12 to $ 15 a pound. Normally we have them between $ 8 and $ 10 a pound. A breast that we sold, you know, a few months ago for between $ 3.49 and $ 3.99 a pound. And right now, they’re $ 5.49 to $ 5.99.

Lasater fears that if prices continue to rise, customers will stop buying.

LASATER: I can’t see this thing go much higher. And, you know, you know, it’ll hurt eventually. I have never seen anything like it.

As customers continue to buy, cattle ranchers like Scott Varilek say they should bring in a bigger chunk of the profit.

Varilek is a futures broker in Sioux Center, Iowa. He also has 200 feedlot cattle that he sells for slaughter. At the moment he is seeking to retire from the business.

VARILEK: Taking too many losses, years of losses, it kind of adds up. This will prevent me from wanting to feed the cattle next door.

Varilek says the cost of feeding cattle continues to rise as his profits from selling his cattle continue to decline, despite high retail beef prices.

Today, cattle producers earn 40 percent of an animal’s retail value. Six years ago they won 60 percent.

Varilek knows other producers who are also struggling to make ends meet with those slimmer profit margins.

VARILEK: We are desperate. We are against a wall and we also see it with our clients, what they are fighting.

Cattle producers attribute many of their problems to the big four meat packing plants: JBS, Tyson, Cargill and National Beef.

Together, these four process 80 percent of all cattle slaughtered in the United States. This market domination makes them the main intermediaries.

They buy cattle from producers and eventually sell them to restaurants and supermarkets that sell them to consumers.

Some ranchers and cattle ranchers say that because only four companies control much of the market, they can charge low and unfair prices.

GRIFFITH: There’s a lot of cattle sellers but not a lot of cattle buyers and then there’s a lot of buyers, but not a lot of beef sellers.

Andrew Griffith is a livestock economist at the University of Tennessee. He says that over the past five years, livestock prices have become disconnected from consumer demand for beef.

GRIFFITH: Before 2014, as box beef prices went up, finished cattle prices went up. Or if if the beef crate prices went down, you would see the finished cattle prices go down. But that hasn’t been the case for the past four or five years. And so that worries a lot of livestock producers.

So what has changed? Matt Teagarden is the CEO of the Kansas Livestock Association. He says domestic and international demand for beef has increased, especially in China.

TEAGARDEN: Consumers want beef here as restaurants reopen, that demand is strong, retail demand has been strong… Our export markets are also very strong.

As the demand for beef increases, ranchers have enlarged their herds. But meat packing plants have not expanded their capacity to process more livestock. So no matter how much beef demand increases, the supply remains stable. This breaks the price relationship between supply and demand.

Meat packers say they haven’t expanded because it’s expensive and they’re already struggling to find enough workers.

Teagarden says workforce and capacity issues created a bottleneck that has been exaggerated by one-off events like COVID-19, the bad winter storms in Texas this year and the JBS cyberattack.

TEAGARDEN: Which, again, created a backlog of livestock and these challenges continue today in terms of getting livestock to these factories. And that has contributed to that, to this disparity between the prices of beef and the prices of livestock.

Lawmakers have proposed some possibilities to address this disparity.

Republican Senator Chuck Grassley of Iowa and Democratic Senator Jon Tester of Montana have introduced a bill. This would require meat packers to buy at least half of their weekly livestock from small producers in the open cash market.

Currently, meat packers buy most of their livestock from large feedlots on private contracts.

The Biden administration also said it plans to use its regulatory powers to reduce the influence of large slaughterhouses in the beef market. This could mean dismantling large meat packers or limiting their ability to gain more market share.

But not all cattle producers support these measures.

David Trowbridge manages a 7,500 head feedlot in Tabor, Iowa. He says something needs to change, but the government might just make it worse.

TROWBRIDGE: We’ve seen the government get involved in agriculture when it comes to crops. There are very few people who are fans of what is going on in the beef industry.

Jason Hitch and his brother operate a 100,000 head feedlot in Guymon, Oklahoma. He is also a little suspicious of the government. He says what the government could do is cut regulations on meat packing plants.

HITCH: Part of the reason there aren’t any new packaging plants is all the regulations and the difficulty in dealing with them. There are many things the government could do to encourage the development of new packers or to expand it.

But others, like Scott Varilek in Sioux Center, Iowa, say the dominance of the Big Four market makes government intervention at some level necessary. Or, for many, it will be too late.

VARILEK: Volunteer sounds good. And maybe we would like to have it that way. But it doesn’t look like it’s going to change anything. And we would continue on the same path we are towards the family food parks that come out of the business.

Reporting for WORLD, I am Sarah Schweinsberg in Syracuse, Utah.

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