There’s something undeniably pleasurable about the conceit of a simple solution to a seemingly unsolvable problem. The werewolf cannot be harmed by normal weapons, but a single silver bullet fells it. The Gordian knot can’t be untied, but it can be cut. Less mythically, we ban DDT and bald eagles recover from imminent extinction.
Further, the simplest solution often is the best. Maybe a Tiger Team Action Committee could come up with a ten point plan to lure the werewolf into an inescapable cell on 97% of full moons, but a revolver loaded with bespoke ammunition offers a more expedient solution. Captive breeding and wildlife preserves might have prevented some species of raptors from dying out completely, but banning DDT allowed them to rebound.
But the idea of the simple, perfect solution also presents a danger. When looking at problems in the real world, particularly complex problems that involve deeply held beliefs and strong feelings, the fixation on a single solution can become deluding. The trouble is that quite a lot of problems have multiple causes and influences. They may be all mixed up with things that are undeniably good. Problems may even have such valid justifications that it’s not clear they deserve the name.
Cattle Market 101
I’ve been thinking about this in the context of cattle. You’ve probably noticed that beef prices in the grocery store have been climbing all year. The reason has to do with the nature of cows and markets.
When there’s greater demand for chicken or pork, the number of animals produced can quickly be increased, since both grow much faster than cows and because both can have dozens of offspring in a year. Further, pork and chicken production is vertically integrated. The big producers may contract with farmers, but ultimately a few huge companies determine how much to raise.
Compared to these other livestock, cows take a long time to mature. A cow can only have one calf per year, and a heifer will usually be two and a half years old when she has her first calf. And even if that calf is a fast growing feedlot steer, it will generally be at least 16 months old when it reaches slaughter weight. Put this all together and it means a rancher has to choose between selling a young female calf for a historically high price today or holding onto it in the hopes that prices will still be high in three or four years. Growing the herd and immediate profit are in competition.
And it will usually be a single person or a family, not a big company, making the decision; cows are the last type of livestock that generally begin life on an independently owned farm or ranch. Tens of thousands of individual producers raise cattle from birth through weaning, then sell them to feedlots. Each of these producers has to choose between a certain windfall today or the possibility of continued high prices and an even larger windfall, or less profit, years and years down the road.
This dynamic makes for a very unusual market, one in which high prices do not necessarily lead to increased production, and certainly will not do so in the short term. Simply put, cattle producers have competing incentives that don’t apply to other livestock.
The Competing View
At the outset of that little tour through the cattle market I said it would explain high beef prices in the grocery store, and I truly believe it does. I would add the caveat that the nature of the market and just how crazy it’s gotten make me suspect there is some amount of speculation inflating a bubble in cow prices, but I think a limited and inelastic supply of beef cattle is the most significant cause.
But there’s another view, which is that agribusiness is the problem. While almost all cows begin their lives on independent ranches or farms, they are consolidated into feedlots, and these feedlots are massive business. Though they collectively market their products under dozens of brands, a mere four companies control over 80% of the U.S. beef supply from feedlot on.
Some people argue that it is collusion among these companies that is driving up beef prices, with high cow prices at best a secondary cause. They point to such shaky things as grocery store prices failing to decline in a week in which cattle prices did as evidence of a conspiracy.
A more plausible version of the claim argues that by artificially suppressing the price of cattle for decades — if only four buyers are in the market, what’s to stop them from fixing prices? — they have suppressed the signal that would have encouraged farmers to increase their herd size. In other words, by enforcing an artificial ceiling, they have prevented the cow number of beef cattle from increasing, which has now caught up with them.
I don’t buy it. I won’t go into all the reasons why I’m skeptical, but these allegations have been knocking around for years. When I’ve looked into specific allegations I’ve mostly found boring old market forces a much more persuasive explanation than conspiracy. A better explanation is that farmers can’t rapidly increase the number of cows they raise, imports were reduced for a number of reasons, most notably the spread of the New World screwworm, which closed the southern border to livestock, and higher tariffs were imposed on imported beef. In other words, a somewhat complex interaction of supply and demand.
The Messy Truth
I don’t like the consolidation of meat packing in America. The agribusiness giants engage in all sorts of shady practices. They write favorable regulations. They are responsible for abhorrent working conditions for thousands of laborers. They tilt the regulatory market in their own favor. I wouldn’t be at all surprised if the have tacit schemes that slightly increase the price of beef consumers pay and pads out their margins a little. I’m all for criticizing them on these grounds.
But we should not pretend that curtailing them would fix everything that’s wrong the food system, particularly when it comes to affordability. One thing agribusiness has undeniably done is make food incredibly cheap in comparison to historical norms. Indeed, one reason beef is more expensive than pork and chicken is that it has not been fully consolidated. Breaking up the consolidation would be for the good, but i doubt it would make beef cheaper.
The idea that getting rid of the big players would make food cheaper and farms more profitable is immensely appealing, but it is a mirage. In the past century and especially the past few decades big ag has made calories cheaper and more plentiful than at any other point in human history. They may be unhealthy calories, they may come with huge costs to the land, the human spirit, and rural communities. Their production may rely on the exploitation of both workers and livestock. But the calories cranked out by industrial agriculture are nevertheless cheap, and they are convenient, which is what most people still want.
The unfortunate truth is that often there is no single solution that will make everything better. When it comes to food and farming, tradeoffs are everywhere. I’m all for reform, even radical reform like breaking up the meatpacking cartel. But we should undertake reform with a realistic idea of the consequences and a realistic plan for a better food system, not with false promises of a quick fix.