Toward sunset we spotted a herd of antelope and roared after them. That damn minivan bounced over the prairie like a horse at full gallop, Hank wild behind the wheel, Allie and Kris squealing in the back seat. We had a Chrysler engine, power steering, and disk brakes, but the antelope had a much superior grace, making sharp and unexpected turns, about two dozen of them, bounding effortlessly, butts held high. After a futile chase, Hank let the herd go on its way, then veered right and guided the minivan up a low hill. There was something else he wanted to show me. The girls looked intently out the window, faces flushed, searching for more wildlife. When we reached the crest of the hill, I looked down and saw an immense oval structure, shiny and brand-new. For an instant, I couldn’t figure out what it was. It looked like a structure created by some alien civilization and plopped in the middle of nowhere. “Stock car racing,” Hank said matter-of-factly. The grandstands around the track were enormous, and so was the parking lot. Acres of black asphalt and white lines now spread across the prairie, thousands of empty spaces waiting for cars.
The speedway was new, and races were being held there every weekend in the summer. You could hear the engines and the crowd from Hank’s house. The races weren’t the main problem, though. It was the practice runs that bothered Hank and Susan most. In the middle of the day, in one of America’s most beautiful landscapes, they would suddenly hear the drone of stock cars going round and round. For a moment, we sat quietly on top of the hill, staring at the speedway bathed in twilight, at this oval strip of pavement, this unsettling omen. Hank stopped there long enough for me to ponder what it meant, the threat now coming his way, then drove back down the hill. The speedway was gone again, out of sight, and the girls were still happy in the back seat, chatting away, oblivious, as the sun dropped behind the mountains.
a new trust
RANCHERS AND COWBOYS HAVE long been the central icons of the American West. Traditionalists have revered them as symbols of freedom and self-reliance. Revisionists have condemned them as racists, economic parasites, and despoilers of the land. The powerful feelings evoked by cattlemen reflect opposing views of our national identity, attempts to sustain old myths or create new ones. There is one indisputable fact, however, about American ranchers: they are rapidly disappearing. Over the last twenty years, about half a million ranchers sold off their cattle and quit the business. Many of the nation’s remaining eight hundred thousand ranchers are faring poorly. They’re taking second jobs. They’re selling cattle at break-even prices or at a loss. The ranchers who are faring the worst run three to four hundred head of cattle, manage the ranch themselves, and live solely off the proceeds. The sort of hard-working ranchers long idealized in cowboy myths are the ones most likely to go broke today. Without receiving a fraction of the public attention given to the northwestern spotted owl, America’s independent cattlemen have truly become an endangered species.
Ranchers currently face a host of economic problems: rising land prices, stagnant beef prices, oversupplies of cattle, increased shipments of live cattle from Canada and Mexico, development pressures, inheritance taxes, health scares about beef. On top of all that, the growth of the fast food chains has encouraged consolidation in the meatpacking industry. McDonald’s is the nation’s largest purchaser of beef. In 1968, McDonald’s bought ground beef from 175 local suppliers. A few years later, seeking to achieve greater product uniformity as it expanded, McDonald’s reduced the number of beef suppliers to five. Much like the french fry industry, the meatpacking industry has been transformed by mergers and acquisitions over the last twenty years. Many ranchers now argue that a few large corporations have gained a stranglehold on the market, using unfair tactics to drive down the price of cattle. Anger toward the large meatpackers is growing, and a new range war threatens to erupt, one that will determine the social and economic structure of the rural West.
A century ago, American ranchers found themselves in a similar predicament. The leading sectors of the nation’s economy were controlled by corporate alliances known as “trusts.” There was a Sugar Trust, a Steel Trust, a Tobacco Trust — and a Beef Trust. It set the prices offered for cattle. Ranchers who spoke out against this monopoly power were often blackballed, unable to sell their cattle at any price. In 1917, at the height of the Beef Trust, the five largest meatpacking companies — Armour, Swift, Morris, Wilson, and Cudahy — controlled about 55 percent of the market. The early twentieth century had trusts, but it also had “trustbusters,” progressive government officials who believed that concentrated economic power posed a grave threat to American democracy. The Sherman Antitrust Act had been passed in 1890 after a congressional investigation of price fixing in the meatpacking industry, and for the next two decades the federal government tried to break up the Beef Trust, with little success. In 1917 President Woodrow Wilson ordered the Federal Trade Commission to investigate the industry. The FTC inquiry concluded that the five major meatpacking firms had secretly fixed prices for years, had colluded to divide up markets, and had shared livestock information to guarantee that ranchers received the lowest possible price for their cattle. Afraid that an antitrust trial might end with an unfavorable verdict, the five meatpacking companies signed a consent decree in 1920 that forced them to sell off their stockyards, retail meat stores, railway interests, and livestock journals. A year later Congress created the Packers and Stockyards Administration (P&SA), a federal agency with a broad authority to prevent price-fixing and monopolistic behavior in the beef industry.
For the next fifty years, ranchers sold their cattle in a relatively competitive marketplace. The price of cattle was set through open bidding at auctions. The large meatpackers competed with hundreds of small regional firms. In 1970 the top four meatpacking firms slaughtered only 21 percent of the nation’s cattle. A decade later, the Reagan administration allowed these firms to merge and combine without fear of antitrust enforcement. The Justice Department and the P&SA’s successor, the Grain Inspection, Packers and Stockyards Administration (GIPSA), stood aside as the large meatpackers gained control of one local cattle market after another. Today the top four meatpacking firms — ConAgra, IBP, Excel, and National Beef— slaughter about 84 percent of the nation’s cattle. Market concentration in the beef industry is now at the highest level since record-keeping began in the early twentieth century.
Today’s unprecedented degree of meatpacking concentration has helped depress the prices that independent ranchers get for their cattle. Over the last twenty years, the rancher’s share of every retail dollar spent on beef has fallen from 63 cents to 46 cents. The four major meatpacking companies now control about 20 percent of the live cattle in the United States through “captive supplies” — cattle that are either maintained in company-owned feedlots or purchased in advance through forward contracts. When cattle prices start to rise, the large meatpackers can flood the market with their own captive supplies, driving prices back down. They can also obtain cattle through confidential agreements with wealthy ranchers, never revealing the true price being paid. ConAgra and Excel operate their own gigantic feedlots, while IBP has private arrangements with some of America’s biggest ranchers and feeders, including the Bass brothers, Paul Engler, and J. R. Simplot. Independent ranchers and feedlots now have a hard time figuring out what their cattle are actually worth, let alone finding a buyer for them at the right price. On any given day in the nation’s regional cattle markets, as much as 80 percent of the cattle being exchanged are captive supplies. The prices being paid for these cattle are never disclosed.