Meeting of the Markets

Building connections between producers and eaters

October 15, 2012

By Mike Callicrate

Changing the way we eat canchange the way food is produced

MikeCallicrate.com 5-17-12

*All Fresh Choice Beef – USDA-ERS Data

35.0%

40.0%

45.0%

50.0%

55.0%

60.0%

65.0%

70.0%

1 2 3 4 5 6 7 8 9

19501975

1995 1996 19971998

2002

2000

2006

1999

Farm share of the consumer retail beef dollarA picture of abusive market power

2012

2009

4

Average return on equity before tax (ROE)

Retail grocery: ROE = 21% (last 6 years)

Meat packing: ROE = 17% (last 6 years)

All Farming & ranching: ROE = NEGATIVE 0.54% (last 13 years)

Packers--for those with sales > $500k - Before tax ROE, 2002-2009: 17.38% - source: http://www.bizminer.com/industries/Meat-packing-plants-2011/

Retail grocery--food marketing institute book - http://www.fmi.org - 2003-2009 average: before tax ROE = 20.75%

Cattle--for the farm typology "cattle" meaning primarily cattle operations in USDA/ERS annual surveys - http://www.ers.usda.gov/Briefing/ARMS/

5

Farmers and Ranchers

Eaters

BIG FOOD

BIG FOOD - Where the takers reside – the big corporations, the CEOs, the bureaucrats, the politicians, the brokers, the middlemen, agents and certifiers.

They create nothing. They produce no wealth. They extract, exploit, abuse and enslave. They mine our soils and pollute. They make us sick. They operate above the law.

Vincent C. Vickers, Governor of the Bank of England in 1910, described them as “drones of the national beehive.”

“They live and are dependent upon the honey that others collect. Like the unemployed, they are supported at the cost of the nation.”

He said, “If productive industry could cut out the intervening profit of the middleman and trade direct with the individual consumers of their products, there would follow an immediate demand throughout the country for a much greater production, necessitating an increased employment of labour and therefore an eventual reduction of taxation.”

What is an animal worth?

May 16, 2012

*1,350 lb. live wt. x 42% retail yield = 567 pounds of fresh retail beef

567 pounds x $5.05/lb. (ave. retail price) = $2,863/head

Drop credit $175/head

Total value $3,038/head

1,350 lb. live animal at $120/cwt. = $1,620/head = 53% of retail value

Packer/Retailer share $1,418/head = 47% of retail value

* USDA commodity steer and heifer ave. slaughter weight

In 1975 the producer received 65% of the retail value of beef

Today’s 53% farm share leaves the producer 12% short of when the markets were competitive

12% x $3,038 = $370/head loss to the producer

NOTE: Farm Share is an indicator of market power. As the meat industry has become more concentrated (35% four-firm concentration to over 80%), while touting the benefits of economies of scale and efficiencies, producers have been squeezed. Consumers have paid more for industrial produced, lower quality, highly processed meat.

13Farmers and Ranchers

Eaters

BIG FOOD

How to increase farm and ranch gate income?

This giant t-bone tasted like it came from a happy cow! We love our beef from Claybrook Farms Meat via Cowpool!

1,200 lb. animal (w/o growth enhancing compounds) x 47% (bone-in) retail yield = 564 lbs. meat

1,200 lb. animal x 63% carcass yield = 756 lbs. hanging wt.

756 lbs. x $3.79/lb. hanging wt. $2,865Slaughter Fee -$65/headProcessing Fee (68 cents x hanging wt.) -$514Net income $2,286

1200 lb. animal x 47% retail yield (bone-in) = 564 lbs. of retail beef$2,286/head 564 lbs. = $5.08/lb. cost to consumer

1350 lb. animal x 42% retail yield (boneless) = 567 lbs. of retail beef$2,863/head 567 lbs. = $5.05/lb. cost to consumer

vs.

$2,286 1,200 lbs. = $1.90/lb. to producer

Economic Development vs.

Community Development

A major investigation into the school lunch industry is ongoing as companies that decide what food goes on your child's plate may be cheating schools and taxpayers out of millions. Sharyl Attkisson investigates charges of a corporate rip-off.

Rick Hughes with District 11 in Colorado Springs provides an alternative to Sodexo’s bad food and it’s theft of school lunch money…

Big companies swallowing up school lunch money?

CBS Evening News May 11, 2012

20

Putting the family farm face on industrial agribusiness

“We are the farmers and ranchers of America.”

21

Cargill, Safeway Go Locavore in Colorado

September 13, 2012 - FORT MORGAN, Colo.—Cargill and Safeway have announced a collaboration that will bring “Colorado Proud” beef products to Safeway stores throughout Colorado as part of the retailer’s Rancher’s Reserve Tender Beef line.

22

Tyson launches unique new audit program for on-farm animal treatment

10/12/12 - Tyson Foods, Inc. has launched a company-wide auditing program to monitor the treatment of animals by the 12,000 livestock and poultry farmers that supply the company.

Proposed Colorado Springs Public Market - Creating a new community space for eaters, growers, family farmers, ranchers and local businesses, separate and safe from Big Food and Wall Street.