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Farmers aren't benefiting from higher food costs. They're hurting just as much

Posted at 10:36 AM, Jan 21, 2022

Zane Blubaugh picks up cattle feed on his family’s 3,000-acre farm in Tonkawa, OK. It is a small community of only a few thousand and the weather can be unforgiving during the winter months, but that has never deterred Blubaugh from getting up before the sun and tending to his cattle.

“I love dealing with them, a lot more than the farming aspect,” he said, laughing.

Blubaugh is only 23. He is also the sixth generation of the Blubaugh family to step into the farm’s lead role and lead it into the uncertain future of agriculture.

Each generation has dealt with its hardships and uncertainties, but few have dealt with the degree of uncertainty Zane is currently facing.

“Just trying to make a commitment to move forward and actually grow is virtually impossible right now,” he said.

If you have gone to the store recently, you have likely seen inflation as food prices from December 2020 to December 2021 rose 6.5%. It has prompted some to question where those profits are going, and at least in the case of cattle ranchers, it is not to them.

“As independent farmers and ranchers, we’re on razor-thin margins. Many of these multi-generational operations are having trouble even staying in business,” said Zane’s father, Scott Blubaugh, a 5th generation cattle farmer, and president of the Oklahoma Farmer’s Union.

Since 1980, Farm Aid, a nonprofit that advocates for farmers, estimates the farmer’s share of the retail food dollar has plummeted by 50% and the processor’s share, or the companies that prepare the meat for packaging, has risen by 58%.

It has led to record profits for producers and smaller profits for ranchers while passing higher prices down to consumers.

“Oh, I think it’s just pure greed because they can,” said Scott Blubaugh. “They have that much market power. The system that we have today is broken.”

According to Farm Aid, the top four processing companies—Cargill, Tyson Foods, JBS, and National Beef Packing—control 84% of the beef industry. In 1970, that number was 25% as tens of thousands of processors have been bought up or pushed out. It means less competition, which means fewer options for competing prices, and fewer chances to keep legacy farms like the Blubaugh’s running.

“It’s a huge burden that we all carry to be able to carry on. We have to make lots of sacrifices,” said Scott.

“It just makes it more uncertain at every level. It compounds those factors to where it becomes more difficult to predict anything,” added Zane.

To manage, the Blubaughs have cut back on auctions that require money to run and started selling cattle through private treaty sales. They have also swapped to smaller processors and marketed directly to the consumer so they can save money.

President Biden has also proposed increasing competition and enforcing anti-trust laws to help curb the issue so farms like the Blubaughs can continue to a seventh generation.