Mr. President, I could hardly hear you, but thank you very much for that recognition. I am about to talk about an issue that the man in the Chair, the good Senator from New Jersey, I know is passionate about. It is certainly something that…
Mr. President, I could hardly hear you, but thank you very much for that recognition.
I am about to talk about an issue that the man in the Chair, the good Senator from New Jersey, I know is passionate about. It is certainly something that I know Montanans are passionate about, and, quite frankly, it is what I do every day when I am not in this body, and that is, talk about rural America and talk about the issues that are facing working families and communities across our State, across our country, those issues being inflation and rising costs and market consolidation and depopulation and drought.
Last year about this time, I made a quick trip to the town of Great Falls, which is about 75 miles away from my
farm, to pick up some tires, and I was shocked about not only the price but the availability. Prices had gone up, and availability was--well, they were high in demand, and there wasn't a lot of inventory.
When I got back home, almost the same moment in time, I got a call from my equipment dealer--and this was the first time this has ever happened to me in my 44 years on the farm--and the equipment dealer said: We are going to have harvest in about 60 to 90 days, and if you have any repairs that you need to be done on your combine, we need to know what those are today so we can get the parts ordered. Otherwise, we can't guarantee you those parts will be here.
That was the second shock about the supply chain issues that I was dealt with.
So when I came back here to DC, I rang the alarm about the rising costs that were occurring in rural America and impacting producers in rural America caused by this pandemic. I had a manufacturer in my office a few weeks ago saying how this pandemic has made it so they can't supply America with what they were making. He said: You know, during the pandemic, we told folks to go home, and the 40- and 50-year- olds have forgotten to come back.
So, quite frankly, this pandemic has created some challenges in business, in manufacturing, and in agriculture that we need to be paying attention to.
Then we have Putin's war in Ukraine, which has made things worse, particularly in the areas of energy and, from a farm standpoint, fertilizer. It has also put a strain on our family farms across this country, which, by the way, have already spent years under the gun where things have not been that cheery.
Even before the pandemic upended supply chains and the global economy, we had the previous administration's unnecessary, needless, and, quite frankly, stupid trade wars, which disrupted critical ag markets for the family farmers across this Nation and the family farm ranchers across this Nation who depend upon trade to make ends meet. In the years since, we have seen the price of grain rise because this administration has done a much better job on trade policy than the last one, but the fact is, we have also seen increases in fertilizers, in chemicals, in housing, and in retail food.
But the reality is that rural America truly is in crisis today, and it has been a growing problem for decades under both Democratic and Republican administrations here in Washington. Ag producers have become so reliant on the Federal Government that in the year of 2020, the last year of the Trump administration, 39 percent of net farm income was provided through subsidies by the American taxpayer. That is a big problem, and it is not something that farmers and ranchers want either.
The reason for this is because of market consolidation, because of farm gate prices being artificially low, requiring this government's support. To further contribute, whether it is buying inputs or selling our products--our grain, our cattle, our postcrops, or whatever it might be--consolidation in that marketplace, whether it is on inputs or in the market itself, has made profitability at the farm gate a huge challenge, to the point where we have been driving folks out of business for decades and decades and decades, and it is getting worse.
As most folks know here, I have a real life, and that real life is as a farmer. My wife Sharla and I took over our family operation in 1978. This operation is the same operation that my grandfather and my grandmother homesteaded in the early 1900s and that my folks took over from them and farmed through the forties, the fifties, the sixties, and a good portion of the seventies.
In many ways, the little community in which I live is much the same as when my parents lived there. There is a big difference, though: The farms now are bigger, and they are fewer.
This is an aerial shot of our place, and the arrows point to farms that, quite frankly--farmsteads where--when we came to the farm, there were families who lived there. There were people who sent their kids to the school who lived there. Now, those places--those farmsteads and those farms that go with those farmsteads are farmed by other people.
In fact, in my home county of Chouteau County, which is a big county--it is a big agricultural county--since 1987, we have lost nearly 35 percent of our farms. The numbers have gone from 752 farms down to 477 farms. This is from 1987 to 2017, a 30-year period, which is the last that we have data for.
In the State of Montana overall, operations over $2,500 have gone from 20,000 basically to 17,000, as this chart shows--once again, the same 30-year period from 1987 to 2017.
Across this Nation, operations with more than $2,500 in sales have dropped from nearly 1.6 million farms down to 1\1/4\ million farms in 2017, as this chart shows.
So, look, if these charts show you nothing else, they should show you that, from a rural America standpoint and a food supply standpoint and a food security standpoint, we are not healthy. We are heading in the wrong direction.
You know, there has been a lot of talk about agriculture and its impact on mental health. So try to imagine for a second that you are a farmer or a rancher. You are working nearly every day on the land that was your grandparents or your great-grandparents, potentially your great-great-grandparents. The land is literally a history of your family and the generations before you who did basically the same work-- feeding people--in the same place to make the same living, except that, over time, the numbers, they don't work out anymore. The amount of money you have coming in when you sell your product isn't that much different than it was years before, but yet input costs have gone up.
By the way, I might add, they are not that much different than they were before because we have some serious consolidation in the marketplace, which I am going to talk about in a second, but yet inputs go up. Look, in the last 44 years that I have been on the farm, I have seen many boom-and-bust cycles in agriculture, and I can tell you, every time the price of grain or cattle has gone up, the input costs have risen more than what you are getting in the marketplace, and then when those marketplace numbers drop, the input prices never go down.
But getting back to that farmer that you imagine yourself to be like, I want you to think about what it would be like to take over the farm that your grandfather or great-grandfather or great-great-grandfather homesteaded and it has been successful for generations, and now, all of a sudden, the books don't balance. You don't have enough money to pay the bills. And it is not because you are a bad operator. It is not because you don't know what you are doing. It really is through no fault of your own that you can't make it work anymore.
And we wonder why we have a challenge with mental health in rural America.
So the question is, is why did we lose 345,000 farms in the last 30 years, many of them generational farms?
It is because folks can't make the numbers work anymore. And that main culprit is consolidation in the corporate ag world. No competition means you don't get fair prices.
So I have listed four companies up here that in the--or four industries, I should say--in the poultry business, 54 percent of the poultry processing is controlled by one company. Sixty-six percent--or by four companies, I mean. Sixty-six percent of the hog processing is controlled by four companies. Four commodity traders control 70 percent of the global market for grain, and four companies control over 80 percent of the beef processing in the United States.
Now, any one of these sectors--truthfully, any one of these sectors, those four companies could go out on a golf course and set the price that my neighbors are getting for their products and that the consumer is going to pay for their products when it is on the retail end.
And this happens while they continue to pull in record profits. And the ultimate effect of all this consolidation on rural communities is it has pushed family farming and ranchers to the brink of extinction.
And so you ask yourself: Why should I care?
Well, for one, the American taxpayer is paying a pretty penny because of
this consolidation. In recent years, we have averaged well over $10 billion a year to help keep American farmers in the business across this country. I believe it is money well spent, but the truth is that there is not a farmer or a rancher out there that doesn't want to get their check from the marketplace; they do not want it from the Federal Government. But without it, we would see even a bigger mass exodus out of rural America. They want their markets to work. They want to make it so it benefits them and it benefits the consumer, and, quite frankly, right now it is not working because we have four companies that control 54 percent of the food supply in chickens, four companies that control 66 percent of the supply in pork, 70 percent in the grain markets, four companies, and over 80 percent when it comes to beef.
There is no competition, folks. There is no competition. And this is also bad not only for the taxpayer, but also for our food security.
What this pandemic has taught us is when you have big processors with thousands of people that work in these plants and you get an incidence of COVID, for example, it shuts the entire plant down because you literally have people in these plants that are working shoulder-to- shoulder processing meat. So COVID goes through these plants like that. So they shut them down.
Or you end up with a fire like we had at a processing plant in Kansas, which, obviously, a fire shuts the plant down.
Or we have a cyber attack that happened on one of these big four, JBS, which shuts them down.
So you say: What the heck? It is just one plant.
Well, these plants individually make up a large portion of these percentages that I talked about.
And so what happens? The marketplace goes away once again for the producers, the farmers, the ranchers; and on the other end, it limits supply and the family--the working family that goes to the grocery store sees their prices go up and they say what do we want? Well, we can't do this. I mean, we can't afford to eat because the prices are jacked up.
So it is bad for producers; it is bad for the consumers.
And the fact is, is these packers are doing pretty darn well. The last quarter of 2020, Tyson Foods increased their year-to-year profit over $469 million to $1.13 billion. That is a 140-percent increase in profit.
Now, I am going to tell you something. I don't think there is anything wrong with making a profit. In fact, I think if you are going to have a business that is successful, you have to make a profit. But the fact of the matter is, if we are making a profit--these kinds of profits--and it is killing our folks in family farm agriculture, I don't think that is quite right. And I don't think that is good for rural America, and I don't think it is good for the consumers that live in this country.
So bottom line is, we have got to put some guardrails on the system if we are going to make this marketplace work because it is not working today.
So we have got some legislative solutions. Congress has the opportunity to do something, and I have worked very closely with a number of my colleagues, including the man that is sitting in the chair today, on bipartisan legislation that can put guardrails on consolidation and puts some sunlight on this industry.
I particularly want to thank Senators Grassley, Fischer, Wyden, and Rounds, as well as Senator Booker, for their good work.
In the case of Grassley, Fischer, Wyden, and Rounds, we have put forth the bipartisan Cattle Price Discovery and Transparency Act. That is a long name for a bill that is going to increase transparency in the marketplace and set regional mandatory minimum thresholds for negotiated cattle purchases. This is going to ensure that the ranchers get a fair price, but it won't ensure it alone. We have to do more.
We have to also pass the Meat Packing Special Investigator Act, which will put teeth back in the Packers and Stockyards Act, which was passed back in 1921 because of consolidation in the packing industry, and we are more consolidated today than we were in 1921.
So this will give the Department of Ag a team of investigators within the USDA, with subpoena power, dedicated to preventing and addressing anticompetition practices in the meat and poultry industry and enforcing our Nation's antitrust laws that are currently on the books.
And I am asking my colleagues, when these bills hit the floor--and I believe they will hit the floor, hopefully this work period--to pass these bills, get them to the House so we can get them to the President's desk as quickly as possible.
If you take these two bills, the meat packing special investigator bill and the bipartisan cattle price discovery bill--by the way, they are both bipartisan--and you combine that with the dollars that the administration has put out to loan to small meat packers, to expand and start up meat packers, we will infuse more competition into this marketplace and that will be good for producers and it will be good for consumers and we will not continue to see this decline in rural America.
Look, a well-fed citizenry is essential if a democracy is going to survive. With the consolidation that we have seen over the last many decades, we see the potential for food to become a serious problem in this country, and potentially even weaponized.
Rural America is going to dry up if we don't fix this problem. It is going to continue to see this diagram where we could see fewer folks on the land and we see bigger corporations manipulating for their prices, because, quite frankly, they have already found out--``they'' being the big packers--that they can have it their way because they have had it their way for a long, long time. And because they have had it their way for a long, long time, consumers are paying higher prices because there is no competition, without any regard to what people can afford. It is all about the profit margins, which--I will show you that one again too.
It is all about record profits. It is not about making sure that we have food security. It is about how we can maximize our money at the expense of families.
And by the way, the same is true on the agriculture side of the equation. We will maximize our profits, and we don't care if these generational ranchers go broke. We don't care. Somebody else will buy it. We will still get the cattle. It will be some big hedge fund in New York City. It is OK.
So we need to do something because our citizenry needs to have access to food that they can afford. These two bills are going to help capitalism work for farmers and it is going to help capitalism work for consumers because, I am telling you, when capitalism works, everybody does better.
I said this problem has been around for over 100 years since the Packers and Stockyards Act was passed in 1921. So there will be some in this body who say: Look, we don't need to do this. This is government intervention. It is not necessary. Things will be just fine.
I can guarantee you one thing for sure: If you look at where we have been and predict where we are going, if we do nothing, there will be very, very, very few people living in rural America. Family farm agriculture will be dead in this country. And if we lose family farm agriculture, this country will change for the worse in a major way for all the reasons I have already put out.
So I am going to tell you what. Folks serve in this body because they want to do right by the next generation. They want to make sure our kids and our grandkids have the same opportunity that we had. They want to make sure this country remains the greatest country on Earth. I implore the Members of this body: When these bills come to the floor, and they will come to the floor because I think they are going to come out of Agriculture probably in the next week to 10 days--no pressure, Chairman Stabenow, but that is what I hope happens--and we can get these bills to the floor, I hope that you put your shoes--put your feet in the shoes of those people that are involved in agriculture, and I hope you put your feet in the shoes of the consumer, because if we do these bills, we will be putting the country back on the right track for food security for the long term.
Yeah. So, look, you have a situation where you have got four companies who control 82 percent of the meat in this country. There is no secret. When you don't have any competition--and that is not competition--that you are not going to get a fair price.
And, by the way, these ranchers all have fixed costs. It is not like they can just cut their costs. They have fixed costs.
And right now, because of the drought west of the Mississippi, hay prices are at an alltime high. So all this stuff exacerbates the problem.
What we need is more competition. We will get more competition. And when we get more competition, it will be fair for everybody, both the producer and the consumer.