 My name is Barry Lynn, and I run the Markets Enterprise and Resiliency Project here at New America. And I wanted to thank you all for coming out this morning, this very, very, very cold morning. And excited to have you all here, and I'm going to start even though we're still kind of putting out a few chairs, just to get things moving because I think we got a lot of things to cover today and need to start people talking. Anyway, today's a good day. I don't know if any of you picked up your New York Times this morning. You would have seen an article by Nick Christoff about a book called The Meat Racket by our colleague here, Chris Leonard. If you actually picked up your Wall Street Journal, you would have also read perhaps a review of that same book in today's paper. But so, you know, that's always a good thing when you see your work being reflected out in the big world. So anyway, I'm just going to say a couple words about this event and then sort of move on pretty quickly. Our first goal in sort of hosting this discussion is really to help America's citizens see how concentration has revolutionized entirely the business of raising livestock, of raising animals for food in America. This has happened in ways that really profoundly affect the well-being of our farmers, profoundly affect the well-being of our workers, of our families and our animals. You know, a generation ago, just 25 years ago in this country, the business of raising animals for food looked a whole lot like it did at the founding. We had family farms. We had open and competitive markets. We had high standards. We had a self-sustaining national economy. Today, we see vast, very, very large corporations ruling over almost every corner of this business. And these giants are increasingly controlled from distant capitals, foreign capitals. As citizens, all of this commercial work of husbandry and slaughter is done in our name and under our watch. As citizens, we have both the right and the responsibility to decide what practices we will and will not accept. So our foremost aim today is really just to help our fellow citizens in our national community to see what is actually taking place on our farms and in our packing houses. Our second and very closely related goal is to restart efforts to address the effects of this concentration and its sources. As many of you know, back in late 2007, candidate Barack Obama promised to take on this problem in Iowa. It helped him win the Iowa caucus that promise. The administration actually, for a long period of time, maybe 18 months, tried to follow through on that promise. Through 2009 and 2010, there was an unprecedented effort to understand these marketplaces. And then things changed, and that effort was folded up. And in the last four years, last three and a half years, there's really been almost no national discussion of this problem. As a result, what we see is that years and years of work by farmers, by ranchers, by activists that put this problem up on the—make this an issue for the Main Street was made to vanish overnight, and it has not come back. So our hope in holding this event is actually to get people talking once again about what to do about this. You know, I want to make clear that this is not based on any romantic view that any of us have of what farming and livestock raising is, you know, my own family. My dad was a sharecropper in Florida. We did not hear any courier and eyes sort of stories about farming when I was growing up. You know, we heard stories about a lot of sweat, a lot of hunger, and a lot of mosquitoes. You know, one of the people who's going to be on one of our panels today, her name is Marty Townsend, she couldn't come. She couldn't come. She sent me an email a couple of days ago. She said, can't come because it looks like the creek is rising. She's out in Ohio. And the cows are cavern. So when you're up there, think about me out in the black, frozen midnight dealing with my cavern cows. So there's no one, I think, in this room that has really any illusions about what farming is, but people want to, for whatever reason, people love it, this activity, and they want to keep doing it. They feel it's their right. I know that none of us knows exactly how we are going to deal with this concentrated power. There are a few small fixes that we can start sort of focusing on now. We'll hear about them today. One of them would be to take on this issue of the beef tax. I'll let Sid in this next panel talk, Sid Arthur Mahanta, who's going to be in this next panel, talk about that and explain it and explain what might be done to eliminate the beef tax or just neutralize it. Another potential fix would be just to adopt the rules that were put forward by Dudley Butler to deal with the tournament system, to make the tournament system less of an abomination. But you'll hear about what the tournament system is and why it's an abomination. These are all fixes. These are fixes that can be adopted tomorrow by the administration, by Congress. It's very important also just to realize that it's not a matter of getting a few fixes put into place. We have to keep a, put our eye on the big picture here. This is part of a concentration of power that we see in pretty much all corners of the American economy. This is due to a revolutionary political change that took place in the early 1980s and how we enforce our anti-monopoly laws. The concentration that exists today in agriculture and in other parts of our economy is due entirely to political decisions. This is not due to any kind of metaphysical force. This is not due to the natural functioning of markets. This is not due to the natural mechanisms of globalization. These are all due to political decisions, political decisions that can be reversed, that can be amended. Just to give you some numbers, we've been here before and we've beat this power before. And to give you some numbers that are very pertinent to these issues today. In 1920, thereabouts, in the packing house business, four or five companies controlled 85% of the marketplace. In 1982, that percentage was down to 25% of the marketplace. That power was unwound. That power was distributed. That was done by Republicans and Democrats. It was people like Calvin Coolidge. It was people like Roosevelt and Eisenhower and Kennedy and Johnson. This was reversed again in the early 80s under Reagan. And ever since then, Democrats and Republicans have allowed this concentration to continue. We beat it in the past. We can beat it in the future. I think we will. So anyway, just a couple of talks. We're going to have our first panel is going to be, we're going to start off with a PowerPoint by Patrick Woodall just to give some further sense of the effects of this concentration. Kimberly Kendi of the Post is going to be the moderator for this panel. Kimberly herself has done some really marvelous reporting on sort of what's going on inside of our processing, food processing houses, our packing houses. And I've asked Kimberly just to even just talk a little bit about her own work and add to what other people are going to tell you today. So anyway, we've got a lot to cover today. We've got three panels. We've got all in all, we've got 12 presenters. We're very excited to have Wayne Pacell of the Humane Society coming in later today to talk about this new alliance that's being put together between the Humane Society and family farmers. So anyway, I'll get out of the way because I'll let the other people get to talking. Actually, I'll just let, just because of the nature, this is the only PowerPoint we got today. So rather than, we'll have the panel step up after Patrick does his presentation. This is Patrick Woodall from Food and Water Watch. Good morning. I'm Patrick Woodall. I'm the research director with Food and Water Watch. We're a national consumer group that works a lot on food safety. But we also work a lot on agricultural concentration because it affects what we eat, the choices we make at the supermarket, and the prices that we pay. The reason is pretty simple. We live in a world where consolidation is the rule and not the exception in agriculture. We have 2 million farmers separated from 300 million eaters by just a tiny number of companies at each link of the food chain. Farmers buy inputs like seeds and fertilizer and tractors in a very consolidated market. They also sell in a hyper-consolidated market to buyers like livestock packers and grain processors. So you see that traditionally, economists view kind of concentration in excess of 40 or 50% to be anti-competitive. And this distorts the market and has 3 main implications. It deters innovation. So when there are many competitors, they innovate to out-compete one another and get consumers and supplies and be the best person in the market. In an uncompetitive market, there's no incentive to do that. Second, it deters new entrants. It prevents new companies that could possibly come in and bring change to the marketplace from actually getting into the market at all. What we've seen is that in the organic sector, it grew very, very slowly and hit a glass ceiling that is the food monopoly. Ultimately, most of these organic brands were bought up by major food companies and that kind of change is impossible with a really hyper-consolidated market. And the third is that it has the ability to kind of manipulate and distort prices. Consumers see this at the supermarket. So in the last 30 years, the share of grocery sales by the top four retailers has exploded. They used to be that there were a bunch of regional chains that people shopped at that were local to them or within a couple of cities of them. But the rise of Walmart and a series of mega-mergers in the late 90s really changed that landscape. On Friday, Albertson's announced it was going to buy Safeway. And in one day, it raised the national market concentration by 4% or 5%. So that's what the national picture looks like. They sell 60% of the groceries. They buy 60% of the food, and that has a distorting effect throughout the food chain. But on the local level, it's considerably worse. In over 230 metropolitan areas, the top four supermarket and food retailers sell 80% of the groceries. So you really basically have no choices at all in most cities in the country. And this has two kind of key effects. The first is that it impacts our prices, and the second is that it really affects our choices. The big grocery companies push down on the processors. They get bigger to deal with the Walmarts of the world. And then they end up controlling most of the supermarket aisle. We looked at 100 kinds of grocery categories and found that in general, three out of five products were sold by the top four firms. But in many cases, in fact, in a third of the cases, 75% of the sales were by the top four firms or fewer, two firms or one firm. And what this does is really creates an illusion of choice, right? Because we stand in the supermarket, there are thousands of varieties. We think that we're making choices, but in many cases, we're not. So companies like Pinnacle sell both Vandacamps and Mrs. Paul's fish, fish sticks. So if you're standing there making a choice, you think you're buying between two qualities or various prices, but it's the same company. Unilever sells, I can't believe it's not butter, Countrycrock, Imperial and Promise. Their main competitor, Cargill, or Conagra sells three other brands. So this kind of illusion of choice is a super big deal. And then there's the conglomerate effect. Kraft is selling foods in basically a fifth of the supermarket aisle. And in many places, they're the dominant player in things like macaroni and cheese and lunch meat and mayonnaise and processed cheese. So this really means that not only at any individual point do you have limited choices because only a few companies control it. They are selling you through a proliferation of brands that you really are making choices that you think are choices, but really aren't. But in fact, you really don't have choices throughout the grocery store because a handful of very big companies have their tentacles in every aisle of the store. And this really has effects to the choices that we make. And it really prevents other companies from coming in and bringing new food alternatives to people that actually really want them. But it also has a serious price effect. So classically, the kind of classical theory is as concentration grows, oligopolies will keep prices low, defend off competitors. But as the concentration gets higher, what they end up doing is jacking up the prices. We see this in meat packing, I think in a very clear way. In 1980, about a third of the cattle were slaughtered by the top four firms. By the mid-90s, it was four out of five of the cattle. But during that first 15-year period, prices really only rose for ground beef by about 20%. In the second five-year, 15-year period, they rise by 80%. Now, there are a lot of factors that go into this, but I think it was highly suggestive that the consolidation is really contributing to rising food prices for consumers. But there are a lot of other great examples in terms of the farm gate to retail disconnect. This is what happened in 2008 in dairy. So the dairy prices in mid-2008 were about 22 bucks a hundred weight, a really good price for dairy farmers. By the end of 2008, they were down to about 11 bucks per 100 weight. In many places in New York and Pennsylvania, they were seven or nine bucks a hundred weight. But the price of milk didn't really change. So for consumers, even though the cost dropped by half for the processing companies, the consumer saw a very minor decline in the price they paid for fluid milk, about 20% over the period. The price for cheese and butter flattened or even went up. So this is a situation where you have mega processors on one side and big retailers on the other. In a really competitive market, what would happen is the aggressive processor would sell milk more cheaply. They're buying it for half the price. They could sell it more cheaply and snap up consumers and really be competitive. But in a marketplace that's not competitive, there's no incentive for them to compete with one another. And instead what they do is capture the difference between the farm gate and the retail price and pocket the money. So this is a kind of situation where the consolidation is hurting consumers and hurting farmers. And that spread between the blue line and any of the other lines is the money that the processors and retailers are basically taking out of both the farmer and the consumer pocket. This happened in hogs in 98. So in 98, the farm gate price for hogs fell by 2 thirds and about six months. It was a catastrophic event for hog farmers. In fact, this contributed to what was almost a 90% decline in independent hog farmers in the US during the last 30 years. That decline was not contributed by a decline in the price of pork chops or bacon. In fact, in some parts of this curve, they actually go up. And the reason for that is the hog companies took advantage of this moment to really consolidate power. So in 97, the top four companies were slaughtering every other hog. Today, they're slaughtering two out of three hogs. And this has a real impact not on consumers in terms of prices, but also on rural economies in a very significant way. The bigger packers want to buy bigger lots of hogs. They encourage farmers to get big or get out. And as this consolidation accelerated, it became an intense drive to push down the number of independent farmers. The farmers that remained had no choice really but to get considerably bigger in order to stay in business. And this is the beauty of it. The packers paid a sweetheart deal to hog farmers that were bringing more hogs. If you banded together, if 10 of your independent neighbors brought the same number of hogs as one factory farm brought, the packer would pay you less. They would pay you less. And the reason is they have a sweetheart deal. Now, the 2010 GIPSA rules would have addressed this by dealing with unfair giveaways on prices, on premiums. But what this does on the farm side is actually very, very interesting. So in Iowa, about 80% of the hog farms went out during this 30-year period. This is a study we did in 2012. And the theory is obviously, well, these are inefficient farms. They're going out of business and it's going to benefit rural economies because they'll be better farms. But the reality is the number of hogs that were sold in Iowa during this 30-year period doubled. The value of those hog sales in real terms went down. They actually went down. They sold twice as many hogs. But the value of hogs sold actually went down by about 9%. Now, what happened is the hog farms tripled in size in Iowa. On the local level in Iowa, about the top four firms control 90% of the sales. They are buying 90% of the hogs and they have a stranglehold on the Iowa hog economy. Now, the theory, what we're told by the meat industry is this is beneficial because these are better firms. They're more valuable. It has a huge economic benefit. But what we found is that the counties with the biggest farms in Iowa actually saw their income fall by 20% in real terms. The counties, overall, Iowa counties did better. They got a 50% increase in total personal income, which is basically economic output. It's like the GDP of a county, basically. So what we saw is that this actually, the larger hog farms were doing more poorly economically, but it's not just that. These counties saw higher income inequality. They lost small businesses. They had fewer on-farm jobs and they lost retail sales. So all in all, these kind of mega farms and this concentration and consolidation of agricultural production had a really negative effect on the agricultural economy in these rural areas. Now, what this tells you is a couple of things. One is that gypsas needed now more than ever. Not just to restore competition to the marketplace, but to provide real economic value to rural communities. And second, what these kind of things, people are arguing that we can kind of shop our way out of it. That consumers can make the choices to really change the food system. What I would argue is that you can't shop your way out of it in a system that is so consolidated that it's impossible to make choices at the supermarket aisle. Thanks. Okay, well, you all just met Patrick, so I don't need to introduce him. First of all, I'm Kimberly Kendi. I'm a reporter at The Washington Post. I report to the National Desk and write about a number of things, but over the past year, I've written extensively about a proposed overhaul or substantial change to that the USDA is looking at with respect to how they inspect and process poultry. And that's why I'm here today, I guess. So let's see, you've met Patrick. We're missing a person. And this is, forgive me, this is Dudley Butler, correct? Okay. And he's the former director of the Grain Inspection Packers and Stockyards Administration. And this is Siddhartha Mahatna. Did I get it right? Mahatna. And he's a policy analyst here at New America. And so I guess we'll go ahead and everybody has been given about five minutes to kind of give an overview so you can learn from and hear about their expertise, their own research, and what they've learned on this topic. And so we'll continue with that right now with Dudley. Right? Or Sidd. Or Sidd. Sidd can go next. Yeah, okay, there we go. Well, thanks everyone for making it out here today. What I've, the piece of this story that, I've been working on over the past eight or nine months has been something we've come to talk about as the beef tax. What this is, is a program that an organization called the National Academy's Beef Association collects a massive amount of revenue off of. This is essentially a fee that's taken from ranchers, a dollar per head of cattle. That money through sort of a convoluted public-private process ultimately makes most of its way into the coffers of this organization, the NCBA. That organization has a lobbying arm. It also has an arm devoted to promoting the products that, purportedly promoting the products that ranchers raise and sell. The problem here is that this money, which is collected from ranchers, is then used to undermine their basic way of life. We're talking about things like suing and then trying to prevent the implementation of country of origin labeling. If you, as many of you I'm sure are familiar with, I mean this is a very contentious issue right now because what the industry, and when we say the industry, we're talking about companies like Tyson, which Chris Leonard's book covers and obviously in depth. We're talking about foreign companies like JBS. We're talking about companies that don't want consumers to have a sense of where their meat is coming from. They don't want consumers to have a sense that modern meat production involves coddling together your bacon, your sausage from meat products and pieces from who knows where. And that's sort of the point here. This is kind of an entity that using this money, again collected from ranchers, wants to prevent consumers from knowing the story of their food. Now I think the labeling example is just a helpful way to sort of begin talking about this story. The USDA and Congress put together this sort of fee collection, this beef tax way back in 1985. The idea was again to collect a dollar per head of cattle and use it to finance all sorts of meat promotion activities. Most famously, this has been used for commercials, been used for radio spots. The idea here was to convince consumers who at the time, in the mid-80s, were eating less and less beef that they should be eating more and more beef. Now that, from the perspective of the ranchers, from the perspective of independent farmers, that's obviously a good thing. That's something that helps the economic well-being of rural America. You do start wondering, though, what reason does the federal government have to be involved in this sort of program. As it turned out over the last 30 years or so, you've had more and more reason to wonder why the federal government should be involved in these sorts of programs at all. Over time, kind of through a series of, again, somewhat convoluted trade policy, politicking this program, the money collected across the country, over the life of the program, I think been about $2 billion that it's getting up there. Over the course of time, this money has been co-opted by the NCBA, as I said earlier. Now the problem here, is that the NCBA enjoys a, I guess we should say, disproportionate degree of influence over how that money is distributed. If you look at the state councils that collect this money and sort of decide how it's going to be spent, the NCBA and its state affiliates basically own these committees. They enjoy, again, disproportionate money representation on these state groups. So they get to pick who gets the money and they end up getting most of the money. We're talking about upwards of 99% in some years. So it's quite significant, obviously. They also, as I said earlier, this is an organization that has a lobbying arm, an organization that has this, again, this meat advertising arm. Now the problem there is, when the program was created, Congress specifically said that this beef tax money cannot be used to lobby Congress, cannot be used to fight for any sort of legislation. Now just as a layman, you might wonder where do you draw that line? Where do you institute that firewall to make sure that beef fits what's for dinner doesn't become a lobbying message? As it turns out, that ambiguity has been a serious problem, again, over the past 30 years. The independent ranchers, the family farmers, many of whom are in this room who've been fighting some sort of transparency and some sort of clarity on the reality of how this program works, have, I'd say over the past eight or nine months have just really helped me flesh out my understanding of how programs like this, which again, begin with the best of intentions, are then sort of co-opted and used against them. Now I mentioned country of origin labeling. That's one way, one obvious way in which the value of the independent ranchers' product is sort of diluted, is sort of made to not have a role anymore. There's also things like ag-gag legislation around the country. Obviously, this is a battle that's being fought in the state level. Again, this is a situation where a factory where a big ag does not want you to be able to know how its products are made. We've got any number of situations where big meat companies, big meat companies have fought the Obama administration on anti-trust reforms as my colleague, Lena Kahn, wrote about in-depth in a piece in the Washington Month last year. The fact is this is an industry that is pushing any sort of deregulatory measure, all sorts of laws, to undermine the family farmer. And they're using it, and they're doing it using his money. And they're doing it in ways that obviously make it harder for consumers all across the country to have any sense at all about what it is they're serving their families. Okay, so we're gonna hear from you, Dudley, now. And then after that, we're gonna have a brief conversation about this issue and then open it up for some questions. Yeah, I don't wanna take too much time with the story. I'd like to feel some questions, but the movement, if you will, to try to straighten this situation out to level the playing field between concentration and the family farm really kicked off in the 2002 Farm Bill. There were some things put in the Farm Bill at that time. And then in the 2008 Farm Bill, there were some more things put in. And we were instructed to write rules at Gipsa after I was appointed the administrator, which we did. And we don't, I think that, you know, I personally and some of the people at Gipsa have been accused of being biased. But I don't think it's biased when you try to level the playing field. It's not biased when, I'm a Mississippi State guy, it's not biased when we try to recruit good players to beat Alabama. Alabama's up here, we're down here. Of course, Alabama's up here and everybody else is down here, so. When we started with the Gipsa rule, you know, we got their staff together and we went through a lot of things. We took a lot of time, put a lot of hard work into it. Excuse me. And things were going on fairly well. And then we had some changes at the secretary's office, at the people on the secretary's staff and chief of staff. And Christopher calls them pragmatists. I call them naysayers and cowardly. To think that this was going to be an easy fight was rather naive. Because when you try to seize power from any company or any person, they're going to fight for it. It's going to be a bloody battle. And it's going to be a long battle. And that's the reason I'm here today. The battle's not over. We can still win this. But the problem we've had, I'm also a beef farmer. The problem we've had for years is we've talked to ourself, sang to the choir, if you will. We have to get other people. There are very few farmers left. Less than 1% of this country actually farms. And we have to get other people. We have to get consumers. We have to get animal rights groups. We have to get workers. We have to get everybody. Because you know what? They're the people that are paying for these products when they go in the grocery store. And we run into them. When you get up here in Washington, they call it spin. I call it line. But you hear all these things, and they'll come up with these buzzwords about, on cool, it's protectionism. It's not protectionism. It's honesty. If you're proud of your product, why won't you say where it came from? Well, you go in the grocery store up here, you'll see apples from South America or avocados from Mexico. Why can't we say where our cattle are born, raised, and slaughtered, or the nicer term is harvested? So that's kind of the key. I've used the analogy, we always going to have big corporations. I'm not against corporations. I'm against unfairness. And to me, it's strange that we didn't get defeated on the Gypsy Rule through the Agriculture Committee. They went to the Appropriations Committee. And as far as I know, in the first time in the history of the United States, went in and picked out specific sections of a rule and instructed in the Appropriations Bill, instructed the Secretary of Agriculture that he could not spend those dollars to put that rule in effect. After we had done all this work, had 61,000 comments on this rule. I don't think our system of government is supposed to work like that. I wished I don't have much in common with Dick Cheney, except we both lived in Wyoming. But I do believe one thing he said was right. I believe that the executive branch in actuality is more powerful than the legislative branch and the judicial branch. If you'll remember right, I think, as they say in Texas, W, sign more signing statements than any president in the history of the world, I guess. And I would have liked to have seen President Obama step up and say, you know what? You're not going to infringe on my power. Your job is to give me the money. Then I would use my discretion on how to spend it. Thank you. Well, I've learned a lot already from you guys. And one of the things that, since this panel is about consumers, I had a couple of questions about consumers. I know that one of the things that people really care about, one of the questions I was going to have is, well, what about what the industry argues with respect to consolidation helps drive down prices for the consumer? I think you've addressed that already, Patrick, so I'm not going to bring it up again. But one of the things that industry also says, and I'm curious about what your thoughts are, is that by virtue of consolidating, by having the ability to come up with mechanisms that can properly sanitize food, properly process it to make it safe for us that they're better able to do that than sort of small packing houses, small processing plants. And so I'm interested, since we haven't talked about food safety yet for the consumer, since they really care about that along with prices, maybe Dudley, if you have some insight on that, you could start about whether or not consolidation leads to a safer product or if you think that it actually has the opposite effect. Well, I think one of the things is that we've drifted into a situation where we say, if the product is cheaper, then everything's great. No matter what happens in the production chain, if you can make it cheaper, well, why don't we just go back to slavery? That'll make it cheaper. And some people would argue that some of these poultry growers are pretty close to that right now. They're economic slaves. They cannot move from one place to another. Very seldom. There is sometimes. But very seldom do you see them have the ability to move from one company to another company. So they're buried. They're upside down, as you would say, in the mortgage market. They're upside down in their investment. They got $1 million invested on 40 acres. It's a single-purpose facility. So what I'm getting around to is when you have the concentration that you're talking about, and I think now, there's a push on to speed up the chain in the plant. Well, the speed of the chain is in direct correlation to safety, as far as I'm concerned, for the worker and for the product itself. So I think it does have a, it is a safety issue, and I think it's a situation where it creates unfair results. Patrick, do you have anything to add on that, since you are a food and water watch? Sure. I think one thing to think about is when you have very, very large plants, if there's a problem, it goes everywhere. And if the notion is we're going to have many, many, many very dirty small plants or a few perfectly pristine plants, then obviously people would want the pristine. But remember that we have very major companies with very major plants that have had very, very significant tens of millions of pounds of meat recalled in the past five or so years. So it's not a situation where these are necessarily considerably safer plants. And obviously the oversight issue, the inspection issue, that can all be addressed on scale. The problem is that with a very consolidated system, if there are any problems, it's on in everybody's kitchen. And a great example of this was the peanut scare in 2007, where a whole bunch of salmonella peanuts got put into the marketplace intentionally by a firm in Georgia with plants in Texas, those peanuts went everywhere. So they went into nursing homes. They went into cheese and peanut butter crackers. There were thousands and thousands of things recalled because that supply went into a few giant processing plants and few giant companies. And that single ingredient went into everybody's house. So there are real risks with scale as well. I had one more question that I was going to open it up to the audience. I talk to a lot, I hear a lot from consumers. And one of the ways that they try to break up these big companies is by going to their local farmer and purchasing directly from them either farmer's market or buyer's clubs. Does that really have an effect? Is that one way, we've talked about the political solutions and that they haven't happened but that they're real and they could happen if there was the will to do it in Congress and USDA and FDA. But what about the consumer that feels like they don't really have a lot of power or influence on the hill? Can, does voting with their feet make a difference? I mean, I think we obviously support local food options and people using CSAs and going to farmer's markets and all of that. But the reality is it's a tiny, tiny proportion of the food that people eat. The reality is even with, and I think the organic industry is a great example of this. Many, many innovative medium-sized firms were developed in the 80s and 90s and they reached a glass ceiling where they could not get on to supermarket shelves so consumers couldn't vote with their feet and their only choice was to sell out. Many of them sold out to the very largest firms. Many of these organic or natural brands don't even show the big company label that actually is manufacturing and distributing them. So it's very, very difficult to vote with your feet up to a certain point. You can do a little bit of it, but ultimately to change the system, we need to change the political power dynamic to ensure that there's enough competition so people can make real choices. Remember, many more people used to work in the food industry when we had a much more diverse, unconcentrated world where there are lots of local food processors, lots of local brands, lots of local options, and that's not the case anymore. And largely this is because of consolidation and this political power issue. We don't have the power to change this right now, but we're gonna build to it. Okay, I wanted to ask, said if you had anything to add, obviously you've looked at how we get taxed in order to tell us what we should eat. What do you have to add in terms of what the consumer can actually do to be part of the change? I think starting to, just on the simple level, starting to understand the nature of this slush fund for the industry. We talk about food safety, we talk about their ability to lobby and effect efforts to get antitrust going. I mean, this money, or the ability and the resources to do this comes from the fund that I wrote about. It's the fuel that keeps that engine going. And I think that consumers, from whatever end of the political spectrum they come from, can find reason to sort of have a problem with the way this thing is structured, so. Okay, thank you so much. Okay, I'm gonna open it up to questions. Does anybody have a question for one of the panelists? And if you do, if you could stand up and if you wouldn't mind, and, oh, good, there's a microphone that can be brought to you. Hi, I'm just struggling to reconcile the statements about food safety with CDC's recent report that food-borne illnesses are declining, and with USDA's data that bacteria on meat and poultry are declining dramatically. How, if industry consolidation is a problem, how are we seeing these very encouraging results? I'm gonna interject myself on that. CDC, if you talk to them about their data, will tell you that the way they've been collecting the outbreak data in recent years has changed radically, and that there is, that accounts for some of the drop, not all of the drop, but that's sort of the nature of data is that when data collection changes, and the way you go about it changes, you can sometimes have data that doesn't necessarily reflect, no? Well, I just interviewed somebody yesterday at CDC who's in charge of the database who told me that. But the tests are more sensitive, so if the tests are more sensitive, we would be finding more bacteria. And USDA data as well. I'm just curious, maybe you collaborate how it's changed, what they said to you about how it has changed, and has it been changed to favor industry? I'm still talking to them about that so I can better understand the data. I mean, whenever you see big changes in data, that's like always, did you change how you collect it? And so that's part of it. Also, one of the problems with outbreak data itself is that you're completely reliant on how state and local health officials record it. And so that's, it's a difficulty that I'm having an ongoing conversation with them about. Hi, thank you. I have a question for Patrick about the concentration at the grocery retail level. And the reason I'm asking this question is because the numbers that you put up look a little different than the numbers that I've seen sort of the FTC talking about for concentration at the grocery retail level. So my question is, is there a difference in the way that you're looking at that concentration than the way that the Federal Trade Commission looks at it? And is there something wrong with the way that they're looking at it, saying that grocery retail concentration is growing but fairly low at this point? So I was wondering if you could speak to that. Well, I think they use the national numbers, which is one thing that makes it artificially low. And the other thing that they do is only look at a supermarket chain versus supermarket. So if you just compare Kroger and Safeway, the two top supermarket chains, then it's gonna be a lower share than if you account for the Walmart, the Costco's, the Target's, and Walmart and Costco or Walmart and Target are two of the other top four companies. So that has, that's most of that difference. Sure. Ma'am, when you were talking about the safety of the packing plants, okay. And it's your position, and it's probably my position that we raise the safest beef in the world. Is that true? I'd say so. Okay. Absolutely. Well, why not give the consumer a choice by putting a label on it and saying it's from US because perception is 99% of the truth. And if the people buying in the grocery store think US beef is the safest, it is the safest. Mr. Butler, it's good to see you again. I'm Mark Dopp with the American Meat Institute, might as well get that out of the way right now. I'll respond to your question in part. Explain to me how the safety issue comes into play. When two animals, one born five miles north of the border and one born five miles south of the border, go to the same feed lot, fed the same feed, go to the same packing plant in Skyline, Nebraska, subject to the same inspection regulations, everything's the same. How does that tie into safety? Mark, you and I both know that we can talk about safety from a veterinary standpoint, or we can talk about safety from a consumer perception standpoint, okay. One of the things, and you know this, there have been a lot of problems north of the border with BSE. There are a lot of problems south of the border with tuberculosis. And you know, we've tried to address those problems, but I'm looking at it from a consumer standpoint, not a veterinary standpoint. Why not allow a consumer to be able to look at a package and say this animal was born raised and harvested in the United States? Why not give them that choice? They are spending their money, they should have a choice. That's the whole point. Well, okay, if they should have, if that should be optional, optional, excuse me, and you say 78% of the people want to check off, then it shouldn't be mandatory. Everybody would jump on board according to what everybody's saying, you know, no matter what, 78% of the people want it. Hey, let's have it voluntary. But we tried that. The secretary tried voluntary with AMI and you know that. And they sent the letter out and ask it, what happened? Nothing. So what you're saying is that make it optional for the meat packers to label it and if consumers really, really cared, they would buy that meat. The market is full, gee, there's money to be made there. Well, why did the poll, excuse me just a minute, why did the poll say that 93% of consumers wanted to know where the product came from? Why did they say that? But then you have to look at that source as well, right? I mean, you can't have it both ways. Okay, I guess we have another question in the audience. Can I ask you a question? Hey, thank you. Of course, Chris, go ahead. Chris Leonard, first of all, I'm so relieved that the American Meat Institute's getting a platform to talk, they finally have their voice heard in Washington, it's great. I'd like to turn the converse, I know, I know. I'm really glad you're here, Mark, it's awesome. I'd like to turn the subject a little bit to antitrust laws, since we have Dudley Butler here and the American Meat Institute, it's a great conversation. One of the key reforms of the GIPSA rule would have strengthened the Packers and Stockyards Act by allowing farmers to sue meat companies over unfair or deceptive practices without having to prove that hurting one producer would hurt competition in the entire industry, which is a standard that Tom Vilsack himself said is outdated and makes the Packers and Stockyards Act ineffective and let me point out that the Packers and Stockyards Act was a crucial antitrust reform that was passed 100 years ago when we faced some similar problems associated with concentration. So, you know, Mr. Butler, I guess I'd like to ask you why you think that initiative failed and would love to hear also, you know, response from the American Meat Institute as to whether or not our antitrust laws today are as effective as they should be. Well, I think it failed because of the politicos on the Hill. I mean, they went to the politicians. There were some statesmen that stood up and stateswomen, but they went to the politicians. And I said, oh, I'll go. They didn't go to the Agriculture Committee. They went to the Appropriations Committee and snuck it in the back door. But the thing that you have to realize that beef and chicken and pork are all produced now by just a few companies. They're in the protein business. They're, it used to be the chicken business and was against the beef business, the beef against the pork and vice versa. They're all owned by the same people now. And so when you look at the situation from a standpoint of Gypsoroo, we had to address different types of problems. And when we wrote it, and we put situations into effect to where you built parameters around broad terms, that would allow the secretary would actually have decreased litigation by allowing it to be handled administratively. You would have had, now who in this room can say that retaliation is not an unfair practice? That was one of the parts of Section 210 that was put in the appropriation bill. We couldn't move forward. Fraud, retaliation, denial of due process. You know, who in this room wants to stand up? Mark, you don't wanna stand up and say that's not unfair. You're not gonna do that. Nobody else will. No, I'll see a couple of things instead. And Chris knows this and you know this too, Mr. Butler. One of the reasons that we opposed what you proposed was we still believe in the Constitution and the separation of powers. And you know and I know that every federal appellate court, every circuit that has addressed the issue that you're talking about has found in opposition to what the rule attempted to do, every single one. Now, if people have an objection, if there is a concern that the standard in the statute is not being applied properly, that is for the Congress to deal with, not for the executive branch. Second, back to the gypsum rule. You asked about, well, the court, every appellate court that has looked at this issue has said that a producer must demonstrate injury to competition as a whole, not injury to that individual. That's the way the courts have ruled. People in this room may not like it, but that's what the courts have held. And again, if you don't like it, go to the halls of Congress to deal with it. Don't turn to the executive branch. Secondly, somebody asked about the administration or enforcement of the antitrust statutes. I could bring in a stack of studies about this high, studies and reports, examinations of the meat industry, that all show that it's competitive, not withstanding the concentration ratios. You know that and I know that. The most recent study, somebody that I think used to work for you in part, Richard Sexton, 2012, made the exact same finding. So it's been studied to death. I've been asked to wrap it up, but I did have one follow-up question for the informal member of the panel. You indicated that you had a problem with the way, the path that was used to try to do something on this front. So if the appropriate measures were taken, if it was taken on a path that you agree is not unconstitutional, would you still oppose it? I think it's a principle that we're maybe interested in. I'm happy to have the debate in Congress if somebody wants to take it there. I would still oppose the change, but I think that's the appropriate venue, not to the executive branch. Okay, thank you. Can I speak to that? Sure, one. I don't want to get in a big legal discussion here, but you're wrong. You can, the executive branch can actually write when they have the authority to promulgate rules, which they've had since 1921. Congress said, we didn't give you authority to write the rule. Oh, yes you did. You did it in 1921. And so- I thought it was strengthened in the 2008 Farm Bill too, wasn't it? It was, but the secretary can actually come back. And revisit a rule or a definition, change that rule in the court, has to give deference to the secretary. The other thing was when you talked about all of the courts, and you know this, some of the courts have ruled that way, not all of them. I think six have, some of them hadn't been addressed, but in the fifth circuit, which is probably one of the most conservative circuits in the country, the three judge panel ruled in the favor of the grower. It was a Wheeler versus Pilgrim's Pride case. Then the chief judge, who was appointed by W again, called for an in-bond hearing, which means all the judges sit down. And it was quite an unusual oral argument, but you're right. They ended up, the farmer ended up losing nine to seven. If it would have been eight to eight, the farmer would have won. So I look at it from a standpoint, if we got arbitration, we had arbitration in contracts, especially poultry contracts, that literally would cost the farmer $30,000 in advance just for the deposits for the three arbitrators, okay? So that eliminates a forum economically. They also had wording in the contracts that said you give up your right to a jury trial, okay? So that eliminated that forum through contract. We changed that. I can't sit here and say what all the poultry companies did, but once we got the arbitration clause where it had to be fair, or you could choose whether you wanted it or not, many of them took it out of the contract. No. I know I'm supposed to wrap this up. We obviously could talk about this for a long time, but I know there's other panels that are supposed to go after us and we're a little over time. Thanks so much for coming and appreciate it.