Why America's Cattle Ranchers Keep Getting Squeezed

Summary

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Odd Lots Podcast Summary

Episode: Why America's Cattle Ranchers Keep Getting Squeezed
Date: November 22, 2025
Hosts: Tracy Alloway, Joe Weisenthal
Guest: Bill Bullard, CEO of R-CALF USA

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Overview

This episode investigates the economics, structure, and challenges facing American cattle ranchers amid surging beef prices and increased market concentration. Hosts Joe Weisenthal and Tracy Alloway are joined by Bill Bullard (CEO, R-CALF USA) to explore why, despite high retail beef prices, many ranchers are struggling and leaving the industry. The discussion covers industry consolidation, market dysfunction, input costs, trade policy, the influence of corporate entrants like Walmart, and the implications for both consumers and rural America.

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Key Discussion Points and Insights

Beef Prices: Why So High?

• Recent Price Spikes: Consumers face significantly higher beef prices. Prices have more than doubled over the past decade while supply has contracted.
  • “The price of ground beef… has like, tripled since 2010. It was like $4 around the pandemic. Now it’s over $6.” – Joe Weisenthal [03:31]
• Cattle Price Dynamics: In 2024, a long-awaited positive relationship has returned: cattle prices are rising with beef prices, reversing years where ranchers missed out on higher retail pricing.
  • “We now have a positive relationship between the price of beef and the price of cattle.” – Bill Bullard [04:48]

Historical Industry Shifts and Concentration

• Major Consolidation: Since 1980, the number of cattle operations has fallen by 52%, and just four packers now control 80% of the beef market (up from 36%).
  • Dysfunctional Market: The share of the consumer beef dollar going to ranchers has dropped from 60% to less than 40%. Now, retailers and packers enjoy the majority.
  • “How could the competitive forces...completely reverse the allocation of the consumer dollar?... The answer...It can’t.” – Bill Bullard [06:41]
• Impact: Such concentration has allowed packers/retailers to keep producer prices low, regardless of retail trends. Imports further erode ranchers’ ability to compete and expand.

Imports and Trade Policy

• Beef Imports: The US now imports record volumes of beef, with 22% of beef consumed being imported as of 2024.
• Indistinguishable Imports: Imported beef is not labeled by origin, so consumers can’t distinguish or choose US product—even if they would pay more.
  • “Consumers can’t tell if the beef they’re buying is foreign beef or domestic beef.” – Bill Bullard [13:53]
• Trade Policy Recommendations:
  • Bullard advocates for tariffs or quotas on countries with beef surpluses against the US (e.g., Brazil, Argentina) to create fairer conditions for domestic producers.
  • Bullard also urges mandatory country-of-origin labeling.

Supply, Demand, and Input Costs

• Biological Time Lag: It takes three years to ramp up cattle supply after price signals, due to breeding and growth cycles.
• Input Cost Squeeze:
  • Ranchers face rising costs (land, feed, labor, fuel, fertility) that further squeeze margins, made harder because producers are “price takers.”
  • “Cattle producers do not set the price of beef. The price of beef is set by the packers and the retailers...” – Bill Bullard [13:53]
• Recent Droughts: Ongoing droughts have caused further herd liquidations, compounding the supply shortage.

Industry Structure: Vertical Integration and “Chickenization”

• Walmart’s Entry: Walmart is vertically integrating into the beef supply, dictating genetics and production methods—mirroring what happened in the poultry (“chickenization”) and pork sectors.
  • The concern: Large corporate entrants can further erode independent family ranchers through control and pricing systems like the “tournament system.”
  • “The cattle industry is the last frontier...we’re trying to prevent the chickenization of our cattle industry... Walmart wants to lock up this segment and eliminate cattle producers.” – Bill Bullard [28:15]

Barriers to New Entrants and Rural Impact

• Impossible for Small Meat Packers?: New processors struggle to access lucrative retail shelf space, which is locked up via contracts with major packers and retailers.
  • “How are you going to market your beef?... Even if they’re marketing a high quality product, they’re marketing into a commodity structured marketplace. The advantage falls to the meat packers.” – Bill Bullard [39:48]
• Rural America At Risk: As vertical integration and concentration expand, rural communities lose independent ranchers, echoing the decline seen in the poultry and pork industries.

Generational and Future Ranching Challenges

• Aging Ranchers: The average rancher/farmer age is now over 58; many are not encouraging their children to remain in the industry due to volatility and low returns.
  • “Their children have watched. They’ve encouraged their children to do something else other than to ranch.” – Bill Bullard [24:38]
• Delayed/Absent Reinvestment: Ranchers, once burned by price collapses (notably 2014-15), are hesitant to expand herds even when prices rise, fearing another bust.

Consumer Impact and Public Policy

• Who Benefits from Current Trends?
  • High concentration/vertical integration and undifferentiated imports keep retail prices high and reduce producer share—without passing savings to consumers.
  • “There’s no price saving for the consumer because the packers and the retailers will price it identical...They pocket the increased profitability of buying low and selling high.” – Bill Bullard [38:05]
• Country-of-origin labeling could empower consumers to choose, and possibly support domestic ranchers.

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Notable Quotes and Memorable Moments

• On Market Dysfunction:
  • “How in a competitive market could that have happened? ...It can’t.” – Bill Bullard, on the reversal of the beef dollar allocation [06:41]
• On Corporate Influence:
  • “The cattle industry is the last frontier for these major global meatpackers... We’re trying to prevent the chickenization of our cattle industry. But…the reason Walmart’s getting into it is because it’s profitable.” [28:15]
• On the Realities of Ranching:
  • “Cattle producers do not set the price of beef... The producer is a price taker.” [13:53]
• On Generational Decline:
  • “Their children have watched. They’ve encouraged their children to do something else other than to ranch. And that’s a huge problem.” [24:38]
• On Imports and Traceability:
  • “There is no country of origin label on the imported beef product. So consumers can’t choose to support the domestic supply chain versus the foreign supply chain.” [34:25]

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Timestamps for Major Segments

• [03:31] – How much beef can you buy with an hour’s work?
• [04:48] – Bullard explains the linkage (and disconnect) between beef and cattle prices
• [06:41] – Historical context: industry consolidation and reversal of beef dollar allocation
• [11:04] – Role of drought and input costs
• [13:53] – Beef imports and product indistinguishability
• [18:13] – Intersection of beef and dairy industry
• [21:24] – Lax antitrust enforcement and “merger mania”
• [24:38] – The aging rancher demographic and generational exodus
• [28:15] – Walmart and vertical integration (“chickenization”)
• [34:25] – How policies and trade affect ranchers and import trends
• [39:48] – Barriers to new processors and sustained concentration
• [41:50] – Secular demand for animal protein
• [44:59] – Hosts reflect on consumer angle, country-of-origin labels, and US food capacity

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Style and Tone

• Joe Weisenthal: Inquisitive, analytical, enthusiastic about economics and markets ("Beef is the best food there is in the entire world. I truly believe that." [01:56])
• Tracy Alloway: Balanced, occasionally playful, detail-oriented, situates beef in broader food/ag debates (“Can I start a beef processing plant? Why can’t I go into it …?” [39:36])
• Bill Bullard: Knowledgeable, passionate advocate for independent ranchers, direct in his criticisms of concentration, imports, and policy failures.

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Takeaways

• Systemic structural forces—market concentration, unchecked imports, and vertical integration—have rendered American cattle ranching increasingly unprofitable for independents, despite high consumer prices.
• Antitrust enforcement and trade restrictions could alter the playing field, but trends may further hollow out rural America if unchecked.
• Consumer choice is blunted by the lack of country-of-origin labeling for beef; more transparency could influence the domestic industry’s survival.
• The "chickenization" of beef mirrors what happened to poultry and pork and could further diminish independent ranchers’ roles, to the detriment of diverse rural economies.
• Current trends risk not only rancher livelihoods but also the nation’s domestic food security as beef imports outpace production expansion.

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Transcript

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[Bloomberg Audio Studios Announcer]

Bloomberg Audio Studios Podcasts Radio News.

[Tracy Alloway]

Hello and welcome to another episode of the All Thoughts podcast. I'm Tracy Alloway.

[Joe Weisenthal]

And I'm Joe Weisenthal.

[Tracy Alloway]

Joe, what do you eat more of, eggs or beef?

[Joe Weisenthal]

You know, I was just thinking I want to eat more beef in my life. I probably do eat more eggs ultimately. But like, beef is just so good. Beef is the best food there is in the entire world. I truly believe that. And every time I eat beef I think about why don't I eat this all the time? It's so good. It's so satisfying and all these nutrients. I don't have this impulse to snack and eat garbage afterwards. I want to eat more beef.

[Tracy Alloway]

I'm pretty sure I eat more beef than eggs at this point. Like I will have the occasional omelette and I mix a lot of eggs into like Asian noodle dishes and things like that.

[Joe Weisenthal]

But not that I aspire to live the Tracy to have the Tracee Alloway diet.

[Tracy Alloway]

Okay, well, speaking of beef, except it's.

[Joe Weisenthal]

Really expensive these days.

[Tracy Alloway]

Yes, this is exactly it. So I'm sure everyone listening to this podcast at this point has heard about rising beef prices in in the US There are a lot of headlines flying around constantly in recent days about this. So for instance, we're recording this on October 30th, and earlier this week, President Trump was tweeting about how he wants beef prices to be lower. He's also been talking about buying beef from Argentina. Yeah, it is very much in the news. There's also the whole soybean drama with China.

[Joe Weisenthal]

Yeah, there is a. I think it's funny because in that Trump post, he said cattle ranchers should appreciate how good things are going because high beef prices bring them down. There is just a lot, and I've said this before on the show, which is that I think the ultimate marker of civilization is the amount of beef or protein that you can buy with an hour's work that the median person or the average person can buy with an hour's work. And I think when it's going backwards, we should be very disturbed. So, setting aside, I'm very fortunate, I could probably afford to eat as much beef as I want. But the price of ground beef, I'm looking it up on the terminal now. It's like tripled since 2010, it was like $4 around the pandemic. Now it's over $6. I think these are extremely serious issues.

[Tracy Alloway]

I will say, I don't think we need to be quite as obsessed with protein. Americans especially. We already eat a lot of protein, eat more fiber.

[Joe Weisenthal]

I'm not saying we need to be obsessed. Actually, I do think the protein craze may be a little out of hand. I just think this is like a very good measure of the advance of sort of a weak, wealthy society, that protein gets more affordable.

[Tracy Alloway]

I'm going to get you a cow share for Christmas.

[Joe Weisenthal]

Thank you.

[Tracy Alloway]

All right. Well, I am happy to say we do in fact, have the perfect guest. We're going to be speaking with Bill Bullard. He is the CEO of R Calf usa. So, Bill, thank you so much for coming on Odd lots.

[Bill Bullard]

Glad to be here. Thank you.

[Tracy Alloway]

Thank you also for actually looking the part of a cattle rancher. We really appreciate that.

[Joe Weisenthal]

No one can deny that we're talking to the perfect guest.

[Tracy Alloway]

All right, so why don't we start really simple. What have you observed about beef prices just in the past few months or so?

[Bill Bullard]

Well, we've seen beef prices increasing, as you've indicated, and we see cattle pricing also increasing, as you indicated. So we now have a positive relationship between the price of beef and the price of cattle. And we are a competitive industry. We do not rely on government price supports for the single largest segment of American agriculture that the cattle industry generates about $100 billion a year in cash receipts. So it's larger than any other commodity. Corn, wheat, cotton, dairy. And we rely on competitive market forces, but we have not had competitive market forces until very recently. And that's where we need to get into the history of why beef prices are high.

[Tracy Alloway]

Can I ask very quickly, you said there's now a positive relationship between cattle prices and beef prices. Is that not always the case?

[Bill Bullard]

That certainly has not been the case, especially since 2015. We saw an inverse relationship. We saw beef prices heading skyward beginning in 2017. And while beef prices were increasing, cattle prices were falling. And this is really odd in an industry where the only ingredient in beef is cattle. So you would expect there to be a harmonious, synchronous relationship, a positive relationship between beef prices and cattle prices.

[Joe Weisenthal]

One of the things I discovered on the terminal back during the pandemic, I learned all these things. We actually have an index on the terminal, the Hedger's Edge beef packer margin, which I imagine to some extent reflects that spread. And we do see it rise generally up really through 2021. It's actually started to compress quite a bit. But just actually, why is that? Like, what explains why these things can move in different directions? What is the added factor in the price of beef to that is not the price of cattle.

[Bill Bullard]

So let's go back to just over a generation. We'll go back to 1980. Great. At the time, we had 1.3 million beef cattle farmers and ranchers in the United States. We had about 37 million cows in our mother cowherd. Beef prices that consumers paid were about $2.40 per pound. At that time, we had the four largest packers in the industry, controlling 36% of the the industry. So if we think about how the beef industry works, it's the consumer beef dollar that has to be allocated along the entire supply chain. So back in 1980, every time a consumer spent a dollar on beef, that dollar was allocated by competitive market forces. And over 60 cents of that dollar went back to the live cattle producer, the farmer and rancher, and the cattle feeder. And less than 40 cents went back to the processing part of the beef industry, and that's to the retailer and the packer. So the producer was receiving the majority share, which made sense because they kept that animal for 15 to 18 months before it was slaughtered and converted to beef. And the beef packer only kept the animal for about seven days, and the retailer kept it for the shortest amount of period possible. So, but the point was, is that when consumers were paying $2.40 per pound for beef. 60 cents of that dollar was going back to the producer and only less than 40%. $0.40 was going back to the processor and the retailer. Now jump ahead. Today we've wiped out over half of all the beef cattle operations in business. Just over a generation ago, we've lost 52% of them. We've wiped out 25% of our mother cow beef herd. And the four largest packers control today about 80% of the marketplace. And consumers in 2024 paid about $8.23 per pound for beef. And now in 2021, just a couple years ago, the allocation that the competitive market was making in the marketplace was completely tipped on its head. In 2021, the packer and the retailer received over 60 cents of every consumer beef dollar and and the producer received less than 40 cents. So here's the question. How in a competitive market could that have happened? How could a competitive forces in the marketplace completely reversed the competitive allocation of the consumer beef dollar within the entire beef supply chain? The answer to that question is it can't. If our market was competitive, that could never have happened. That raises the concerns that we've been struggling with for the past several decades. Our industry is in a state of crisis, and it has been. And what has happened is because of industry concentration and consolidation, the ability of the multinational meat packers and retailers to exert buying power upstream in the supply chain, and the fact that we've entered free trade agreements that have allowed the meat packers and retailers to access beef from around the world and displace domestic production. Because the beef that we import from Argentina, Brazil, Uruguay, Nicaragua, Costa Rica, Australia, New Zealand, Canada, Mexico, it's a perfect substitute for domestic product. So the more we import, the less we have the ability and capacity to maintain domestic production of this very important protein source, which is beef. And so what we see today is a dysfunctional marketplace. As I described before. Since 2017, we saw beef prices going up, that consumers were paying in the retail store, we saw cattle prices going down. The latest census shows that just in the five year period from 2017 to 2022, we lost 106,000 beef cattle operations. Farmers and ranchers exited the industry during that period. And the reason that that's happened is because they've suffered long term lack of profitability. It's because their market is dysfunctional. It's because imports have displaced our domestic production and our opportunity to expand. And now we've hit a huge market shock, an economic shock to the market and that was the latest drought that occurred in the latter part of 2020.

[Tracy Alloway]

This is what I was going to ask. So just, we're going to talk more about industry consolidation for sure. And you know, I'm looking for, for instance at a headline right now about Walmart tightening its grip on the beef market by setting up a new plant. But just to play devil's advocate for a second, how much of this is just down to pure input costs like grain going up or you know, the drought that you just mentioned, or labor.

[Joe Weisenthal]

Costs at least especially the move that we've seen over the last year, which I'm sure which cannot obviously be explained by multi decade trends.

[Bill Bullard]

So what we've seen is our cattle supplies have tightened to the lowest levels in 75 years. So we have extremely tight supply situation, but we have incredibly strong beef demand. Consumers willingness to pay for beef appears unbounded. As prices have increased, consumers have still cleared the grocery store shelves with the product. And so the latest drought that occurred had accelerated the ongoing liquidation of our US Beef cattle inventory. And that's why our supplies are so tight. And yet you've got incredible consumer demand for beef. And so we have seen a spike in prices because of that strong demand. Consumers continue to be willing to pay more for beef. But that is not how our market has been functioning for the past decade.

[Joe Weisenthal]

Let's say the rain comes back, there's no drought, et cetera. What are we talking about for a timeline? Again, setting aside the structural things, what, what do we talk about for a realistic timeline for getting back to where we think like, oh, we are comfortable with the level of cattle stock that we, we are happy with the level of cattle stock that we have in this country.

[Bill Bullard]

Right. So we currently produce about 3 billion pounds less beef than what is consumed in America. So largest segment of American agriculture actually under produces for the domestic market. And because of the long biological cycle of cattle, it takes about three years to decide to hold back cattle to breed and then to have a calf and then to raise that calf to slaughter weight over a period of 15 to 18 months. And so in order for our industry to begin an expansion phase, we would need a price point that incentivizes producers to make the investment to build the herd. And unfortunately that price point occurred back around 2023. We should be in an aggressive expansion phase now. Except that instead of domestic consumers relying on US Producers, we've increased the volume of beef imports to record volumes in 2024. That's displacing our domestic production. And that increase of imports is not distinguished in the marketplace.

[Joe Weisenthal]

Sure.

[Bill Bullard]

Consumers can't tell if the beef they're buying is foreign beef or domestic beef. And so that puts the power and control in the hands of the packers and the importers and retailers and not in the hands of producers. So your question was how much of this had to do with increase in input costs? Well, the increase in input costs reduces the the margin that U.S. cattle producers receive at any given price point. And we've seen increased production costs, certainly. But the point is, is that cattle producers do not set the price of beef. The price of beef is set by the packers and the retailers who sell to the consumer. The producer is a price taker in this market and has been for decades. They have cattle, they offer them for sale, they accept or reject a bid by the packer, and they're producing a perishable product. So when an animal is ready for slaughter, ready to be fabricated into a beef product, the producer who fed that cattle has a two to three week window and in which to market the animal. Otherwise it degrades in quality, it adds fat instead of muscle. And as a result, the producer has very limited bargaining power in a highly concentrated market, as we have now. And when they're selling into a market that's controlled, where fork packers control 80% of the market, they are victims of the abusive market power that emanates inherently from such a highly concentrated marketing structure. So the increased production costs reduce the profitability of producers, but it doesn't affect the producers ability to market cattle. That would be the demand for live cattle. And the demand for live cattle is offset and undercut by increased volumes of imports.

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[Tracy Alloway]

What's the relationship between beef availability and the dairy industry? Dairy cows. So the, the reason I bring it up. Joe's going to get sick of me mentioning this, but I've been reading this like 70 year old book on small scale farming.

[Joe Weisenthal]

I hate when people are always bringing up books that they read.

[Tracy Alloway]

I know, it's crazy.

[Joe Weisenthal]

Bring it up one. No, that's a joke.

[Tracy Alloway]

And you know there's a chapter in it about whether or not you want to go into cattle ranching for beef or if you want to raise dairy cows. And one of the things that you learn from this is that every dairy cow usually becomes a, a beef cow at some point. Once its milk production starts to dry up, it usually gets sold for slaughter. So what's the relationship or the interaction like there?

[Bill Bullard]

Well, historically what you described is true. As the dairy animals have exceeded their production lifespan, they are marketed as cull animals into the beef supply chain. And it's a very lean meat product that is mixed with the higher quality trim that we obtain over our grain fed animals that are fed in feedlots produced exclusively for beef. So there wasn't much competition between the beef industry and the dairy industry. But here recently, as we increased our technology and genetic abilities, we have begun to raise more male dairy animals and are bringing them into feedlots and feeding those animals. And they are now beginning to compete with the beef cattle farmer and rancher in the marketplace. And this is a relatively recent phenomena that's been occurring in our industry.

[Tracy Alloway]

Wait, why is that happening?

[Joe Weisenthal]

Yeah, say more.

[Bill Bullard]

Well, it's happening because there's a profit opportunity to sell dairy cattles into the beef supply chain. And of course that will compete directly with our America's farmers and ranchers who not only will have to now compete with this increase in the dairy beef sector, but they're already dealing with this undifferentiated, cheaper import, the flood that has been negatively affecting their profitability in this industry.

[Joe Weisenthal]

Say a little bit more about, okay, cattle prices have gone up and so in theory, that, as you said, in theory that should incent more investment, et cetera. But talk a little bit more about some of the input costs that a cattle rancher faces in making these decisions to expand their stock.

[Bill Bullard]

So one of the first factors is the availability of sufficient land to raise the animal. Because in the beef cattle industry, the animal is primarily raised on grass after a calf is born and it suckles the mother for about four to six months on grass and before it is moved downstream in the supply chain to become a yearling animal and ultimately delivered to a feedlot where it's fed until it's flat or weight. And so the input costs include the fuel with which to run an operation. That includes the veterinary expenses for keeping your animals healthy. It includes the land costs of maintaining sufficient forage supplies for the animal. It includes the cost of equipment to put up hay and grain with which to feed those cattle. And in many instances it includes labor. However, most of the family farm and ranches here in the United States are just that, they're family farms and ranch attempting to raise cattle and they're experiencing increased input costs. You know, we could talk about fertilizer costs too as well, but ultimately the costs have increased due to inflation and that squeezes the margin that they receive at whatever price point that they're experiencing in the marketplace.

[Tracy Alloway]

In terms of industry consolidation, the fact that there are basically, you know, four gatekeepers to beef processing in the U.S. how did we actually get here?

[Bill Bullard]

Well, we got here because we were lax in enforcing our U.S. antitrust laws. The Sherman act of 1890, the Clayton Act, I think of about 1914.

[Tracy Alloway]

Sherman Act, Clayton act, those acts. Sorry. The last time we spoke about eggs in a big series about chicken, we talked a lot about antitrust.

[Bill Bullard]

Right? Well, and that's a huge problem. In fact, it's no coincidence that as beef products prices are increasing, we just saw a settlement in a national class action suit in which two of the largest packers, Tyson and Cargill, have purportedly agreed to settle the consumers complaints about beef price fixing to the tune of about $87.5 million. So what we have in our industry is a decades long lack of enforcement of antitrust laws that allowed the meat packers back in the 1980s to engage in what was called merger mania. We saw an unprecedented amount of mergers and acquisitions in the beef cattle industry. And it was through that process and no enforcement of antitrust laws that the meat packers were able to achieve this extremely high level of concentration. And in addition to that, Congress realized over 100 years ago that independent livestock producers were really vulnerable to the monopsony power, the buying power of the concentrated meat packers. So they passed what was called the packers and Stockyards act of 1921. And this was to ensure that the meat packers, not only could they not engage in antitrust activities such as monopolization and price fixing, but this act also said they couldn't engage in practices of procuring livestock from producers. But that was patently unfair. And so this important act actually helped to bolster the United States ability to ensure antitrust violations were not incurring in the marketplace. And it gave the independent producer recourse in the event that they were treated unfairly or deceptively by the concentrated market. The problem is, just like our antitrust laws that collected dust on the shelf, so too did the packers and Stockyards Act. And yet today, the U.S. department of Agriculture has not promulgated the rules necessary in order to implement and enforce this over 100-year-old packers and stockyards act that was intended to protect independent livestock producers from the abuse of market power of the dominant beef packers.

[Joe Weisenthal]

Do the children of ranchers want to become ranchers? There's a popular country song that came out in 2023 by Cody Johnson called Dirt Cheap. And the entire premise of the song is about this. Had this real estate developer offers him all this land and he's about to take the money, and then he gets sad thinking about his kids will never be running around on this. And when I hear the song, I got a little cynical. I was like, yeah, but that daughter is going to sell the land when she gets older. So what's this? Like, she's going to move to a big city. But are there issues in your industry of, like, the next generation of ranchers? Like, no, I want to sell this land to a data center, or I want to sell this land to a housing subdivision so that I can, like, go work in finance in New York City.

[Bill Bullard]

When you have an industry like ours that has lost over half its participants in the course of just over a generation, yeah. It's not unsurprising that the average age of the US farmer and rancher is now somewhere north of 58 years of age. And we hear anecdotal information all the time about ranch families who have struggled under a economic cost price squeeze for decades. Their children have watched. They've encouraged their children to do something else other than to ranch. And that's a huge problem that we have because part of this expansion phase will require us to Attract new entrants, to attract aspiring cattle farmers and ranchers into the industry, that's not happening. And even though I said that the price point was sufficient to incentivize the expansion over a year ago, we're not expanding. And we're not expanding because our cattle producers have recently witnessed a complete collapse in cattle prices on when we were about where we're at today. And that was just as recently as 2014 and 15. At that time, we had the highest nominal cattle prices in the history of our industry. And beef consumers were then paying the highest nominal beef prices in history. And every analyst, government and private alike, said the cattle producer is going to receive another three years of very strong prices because of that long biological cycle of cattle.

[Joe Weisenthal]

This is a very. This strikes me as a very important data point. The fact that the rancher has been trained essentially to expect that high prices won't necessarily sustain themselves. Right. You could.

[Tracy Alloway]

It's the boom bust, right?

[Joe Weisenthal]

Yeah, the boom bust. We talk about this across industries. It's like great that the price is there, but is the price going to be there in three years when that cow is ready to be sold for meat? It's not enough to just have temporarily high prices.

[Bill Bullard]

Well, that's right. And that's exactly what happened at the end of 2014. In 2015, when everyone believed that our cattle prices would stay strong, they inexplicably collapsed. And they collapsed further and faster than any time in history. And they collapsed until we hit that point in 2017 when suddenly consumer demand was driving beef prices higher and the meat packers were paying less and less for cattle prices. And so we had this inverse, completely dysfunctional situation in the market. Producers were herding. That's the period we lost 106,000 producers from 2017 to 2022. And only now, after this latest drought, that we shrunk the herd size to such an ultra low level, have we seen the cattle prices begin to once again respond favorably to the latent forces of competition in the industry. They began to chase beef prices upward. And we've seen that more acutely here in the last couple few months as beef prices have increased. But the fact is, is that we have not enforced antitrust laws. And what we need to do now is determine to what extent are today's beef prices caused by antitrust behavior in the marketplace, not from the cattle producer, who's a price taker in the marketplace, but by the multinational beef packers and retailers that are actually controlling the beef market here in the United States.

[Tracy Alloway]

Well, speaking of that and expansion. One thing we have seen is new entrants, new corporate entrants moving into the beef industry. And I mentioned Walmart earlier. What's the thinking behind that? Is it just a vertical integration play or what's the additive for a company like Walmart to get into beef?

[Bill Bullard]

Well, you think about all of our livestock sectors. So we'll start with the poultry sector. That sector was vertically integrated in the 60s and 70s from egg to plate. It's the corporations, what we call integrators, were controlling the production. The farmers owned their farms and ranchers. They invested in the capital, but the integrators dictated how the farmers would raise those chickens. In fact, the integrator owned the chickens and essentially hired the farmer to raise them for the integrator. That model was then applied in the 80s and 90s to our hog sector. Back in 1980, when we had 1.3 million cattle producers, we also had 667,000 hog producers scattered all across the United States raising hogs. But today we're down to 65,000. We wiped out 90% of our hog producers because that industry, the corporations involved in that industry began to follow the chicken model. And so we reduced the number of participants and they began to raise hogs under a highly concentrated situation. And it's completely vertically integrated from birth to plate. The cattle industry is the last frontier for these major global meat packers. And it's because of the forage requirements and the long biological cycle of cattle that has prevented them from engaging in the vertical integration model, which we call chickenization. And we're trying to prevent the chickenization of our cattle industry. But the reason Walmart's getting into it is because it's profitable. So Walmart has decided it's going to vertically integrate the beef cattle industry. It's going to direct what genetics a farmer rancher has to use in order to raise the animal. Walmart will dictate the production practices and feeding, and then Walmart will provide the marketing outlet for the producers. And then Walmart will sell that resulted beef product to the consumer.

[Tracy Alloway]

It really is chickenization. It's the tournament system, basically, and it.

[Bill Bullard]

Will lead to that. So the tournament system is a pricing mechanism that greatly benefits the integrator and allows them to buy the chickens from the farmer and pay less for their managerial skills and raising the chicken for them. And that's a concern we have with the Walmart model. Walmart wants to lock up this segment of the beef industry and they want to eliminate all these cattle. Producers just have been eliminated hog producers were eliminated in the hog industry and poultry producers were eliminated. And the first step in the process is you do away with you eliminate the competitive cash market. That's what allows them to vertically integrate an industry. And we're seeing that in the cattle industry. Our cash market has been shrinking at an alarming rate and as we allow this to continue, we will soon see even more vertical integration. What this means is we're going to hollow out rural communities all across America just as we have been doing for the past four decades. And that's because we will eliminate profitable opportunities for our independent family scale farmers and ranchers by eliminating their cash market by dismantling the competitive infrastructure and simply handing the industry over to a highly centralized, highly concentrated beatpacking and retailing industry.

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[Joe Weisenthal]

Going to veer into some sensitive territory here. I don't know anything about how you lean politically. I also don't particularly care. It's fine. All that being said, I think that I have stereotypes and I think if I imagine what the typical cattle rancher, how they are politically, guy wearing a cowboy hat, speaking with a country accent, I would have a presumption about how they might vote in a typical. Again, not you specifically, but you know, I have my stereotypes, et cetera, and they're probably true. Has the current administration, you know, talking. He's been talking to you guys via his Truth Social account. He wants to to lower prices but also appreciate him for the high prices. Little unclear. He was this current administration been a friend to the independent cattle rancher.

[Bill Bullard]

Well, what independent cattle producers needed is they needed our imports to be managed, not to hand to the meat packers the ability to source whatever volume of imports. They want to displace our domestic production to prevent our domestic production from keeping up with growth in population, which is what has occurred here. And so what we needed was the implementation of tariffs and tariff rate quotas on countries that persistently maintain a trade surplus with the United States. In other words, countries from which we buy large volumes of beef, but we sell to them very little. So we have been calling for tariffs and tariff rate quotas. And tariff rate quotas, of course, are limits on the volume of beef that any country can export to the United States. And so when President Trump took his second term, that's the first thing he began doing, was imposing tariffs. And for an industry that under produces in the domestic market, we need the tariffs to provide our industry the space to expand and increase production. So we strongly supported the tariffs when we saw Brazilian imports absolutely explode in 2025 and even last year, we were thankful that the president imposed a 50% tariff on Brazilian exports of beef because that was going to further keep our industry awash in these price depressing imports. But when the president announced this idea to lower consumer beef prices by increasing Argentina's beef import quota rate, we believe that he was misguided, he was misinformed as to how the market structure worked. I don't think he was aware that our industry has just gone through years of depressed prices while consumers were experiencing record beef prices. I don't think he understood how Severe. The lack of antitrust enforcement has adversely affected our industry and caused our industry to shrink. And so producers are very, very concerned right now because we're at the price point where we should be expanding, but we're not expanding as we should be because of the concern for the market failure in our industry that has not been corrected. It's because we're not certain anymore whether the President is in fact going to begin to manage these imports or if he was just going to let these packers continue to import whatever volume of beef and cattle they want to displace our domestic production. And they do this without informing consumers where that beef is from. There is no country of origin label on the imported beef product. So consumers can't choose to support the domestic supply chain versus the foreign supply chain. And that's why we're urging Congress to pass mandatory country of origin labeling immediately. And I think this will help to at least mitigate the negative impact that increased imports from Argentina will have on our industry, because then we can go to the consumer and ask them to choose the higher quality USA produced beef and support us cattle farmers and ranchers.

[Joe Weisenthal]

Look, I totally get where you're coming from, but I, you know, I live in New York City and I have children to feed and one of my children loves beef a lot. And the vast majority of Americans are not cattle ranchers by any stretch. So again, I understand that you have a constituency that you represent. You want to make your case or why should the vast majority of the country, which are beef consumers, get no benefit from higher cattle prices, get no benefit from higher beef prices? Why shouldn't we want the either imports channel or the Walmart, which frankly has a long history of driving prices down in almost any category they enter. They're sort of famously a low cost seller. Why shouldn't we support these trends?

[Bill Bullard]

Well, look at any other sector in the American economy. So we do import large volumes of goods from China, for example, and a consumer can go to the grocery store and see a China priced product labeled as China product or China. Or they could buy a USA product and typically the USA product is going to cost more. But consumers have a choice. They can choose to purchase the cheaper product if they want to. Now jump to the beef industry. Consumers have no choice. The product is undifferentiated. The meat packers are importing this beef from Australia, New Zealand and these 20 different countries I talked about earlier. They're importing them cheaper than what we can produce it here. But there's no label on it. What there is on it is a US inspection sticker leading unsuspecting consumers to believe, well, that must be a domestic product. And so because the consumer can't choose between the cheaper foreign product and the more expensive USA produced product, there's no price saving for the consumer because the packers and the retailers will price it identical because they don't have to distinguish it. So they pocket the increased profitability of buying low and selling high in the most affluent beef consuming market in the world. And that's the United States of America. That's an example of our dysfunctional market. Consumers have not benefited from these increased volumes of imports. Instead, these increased volumes of imports have reduced demand for our domestic cattle, driving hundreds of thousands of cattle producers out industry over the past four decades.

[Tracy Alloway]

Can I start a beef processing plant? Why can't I go into it like it seems like a very profitable business? Certainly if you're a JBS or someone like that, you seem to be making a lot of money. Why don't we have new entrants?

[Bill Bullard]

So you have four packers controlling 80% of the Fed cattle market, meaning they also control about 80% of the box beef market, meaning they've got long term and short term contracts with the major retailers and they have shelf space with those retailers. So if you're a small packing plant trying to get started, how are you going to market your beef? When you're marketing into such a highly concentrated consolidated market where the retailer has long term contracts with the largest dominant global beef packers, how are you going to access the marketplace? So we've had lots of smaller meat packers try to start up. It requires a huge capital outlay to do so. Nevertheless, the government actually during the past administration has been encouraging their growth and development, but they're struggling. They're struggling because they have difficulty in marketing their product. Even if they're marketing a high quality product, they're marketing into a commodity structured marketplace. And the advantage falls to the meatpackers. So until and unless we enforce our antitrust laws and our fair competition laws, we will continue to see these upstart experiencing severe difficulty in finding a profitable marketing outlet for their product.

[Joe Weisenthal]

You know, like I said, I really like beef. Everyone's into protein these days. We talked about this recently on another episode. Protein is really hot. Animal protein in particular is really hot. There's a lot of influencers and people have podcasts and they say things like eat more red meat. And our attitudes about red meat have changed. When I was growing up, that was scary of cut back on your red meat. Now it's like a red meat is like the healthiest thing you can eat. I don't know if that's true, but a lot of people would say that how much of the prices that we pay, whether it's for the price of cattle or the end price of ground beef or whatever, or steak, is about the secular trend towards people wanting to have more animal protein in their diets.

[Bill Bullard]

Sure. So I think it's a huge factor. I think there are a number of factors contributing to the consumers increased demand and willingness to more for beef. And I think therein lies the answer to the problem. If we enforce our antitrust laws and let the market signals flow in our industry, we will begin to expand and our production will soon hit an equilibrium with the consumer demand, and we would see prices subside. In fact, if consumers are unwilling to pay current prices for beef, they would shift to other protein sources like lamb, chicken, and pork. Totally. And you would see the price point from the retailers begin to fall, and you would see the high beef prices subside, actually. But if the government causes this to happen, if the government interferes and forces the demand for live cattle to decline, we're not going to increase the size of our US Cattle herd. And America will become increasingly dependent on foreign sources for their beef. Right now, at 2024, about 22% of all the beef available in the US market was imported product. And if we look at our sister industry, the sheep industry, which is the direction our cattle industry is going in 2024, 73% of all the lamb consumed in America came from Australia, New Zealand. We've decimated our domestic sheep industry. Now we're now government has its sights on the cattle industry. And increasing imports without any product differentiation in the marketplace will simply exacerbate the ongoing shrinking of our cattle producer in terms of the number of participants, number of cattle, and the number of marketing outlets.

[Tracy Alloway]

All right, we're going to have to leave it there. Bill Bullard, I just realized. Bullard, nominative determinism. Right?

[Joe Weisenthal]

Excellent, excellent.

[Tracy Alloway]

You had to go into cattle ranching. Thank you so much for coming on opbox.

[Bill Bullard]

My pleasure. Thank you very much.

[Tracy Alloway]

Joe. That was really interesting and definitely closely related to the chicken series that we did. And again, it seems to be that chickenization theme running through agriculture. I hadn't realized that cows cattle ranching were basically like the last frontier in agriculture.

[Joe Weisenthal]

And to be honest, I would have already assumed it been more or less on that. I actually think the Walmart thing is very interesting because on the one hand, people look at an entity like Walmart and it's like, oh, here's this monopsony player. It's going to drive so much power. On the other hand, you say, here's a new market entrant. This is like, here is the market has just gotten more competitive. I think it's an interesting gut check for people who want to like, think about like market competition that when you read a headline, Walmart is going to get into beef processing. Do you read that as like bad or good? Because you asked, why aren't there more entrants? Well, here's a new entrant coming in.

[Tracy Alloway]

I have to say. I shop at Walmart, I buy beef. I buy those big. Have you ever seen the big, like long packages of ground beef?

[Joe Weisenthal]

Oh yeah, they're like this good. Yeah, I love those.

[Tracy Alloway]

Yeah, yeah, they're pretty good actually. I am kind of floored that there's no country of origin label on these. I never thought about that.

[Joe Weisenthal]

I am a little skeptical would change much like it might not. Like, would you spend meaningfully more or less on beef, presuming you expect that it was like healthier, that it was safely arrived?

[Tracy Alloway]

Yeah. Well, what I would say is I do shop at Walmart, but I shop at Walmart generally for bulk beef. And if I'm looking for the really good stuff, I will go to an independent farmer of which there are many in Connecticut. And I realize, like, not everyone has that luxury. And I will try to get the good beef.

[Joe Weisenthal]

I might try to get the good beef too. It might come from Japan. Don't they like treat their cows really well? Like they like, they like give their cows like beer and all that stuff.

[Tracy Alloway]

Massages?

[Joe Weisenthal]

Yeah. No, I think I love talking about animal industry economics. There's a lot of tension. I will say one other thing which is, you know, I asked that question about like, why should we care the beef consuming part of the world, which is of the country, which is the vast majority of the country, the US used to run a very big trade surplus in food stuffs. Only very recently in the last couple of years has that turned into deficit. It's probably a source of some concern to me that we no longer can domestically satisfy all of our food needs.

[Tracy Alloway]

If you're worried about domestic semiconductor capacity, then you probably should be worried about food capacity.

[Joe Weisenthal]

I think there are some, some overlap issues.

[Tracy Alloway]

We can't eat the chips, Joe. Oh, except for potato chips.

[Joe Weisenthal]

Except the other chips that we can eat.

[Tracy Alloway]

I don't know.

[Joe Weisenthal]

I think there are some. I think there are some things to worry about or think about with food that are a little different, a little similar that maybe we should talk about more at some point.

[Tracy Alloway]

Absolutely. All right, shall we leave it there for now?

[Joe Weisenthal]

Let's leave it there.

[Tracy Alloway]

This has been another episode of the All Thoughts podcast. I'm Tracy Alloway. You can follow me at Tracy Allaway.

[Joe Weisenthal]

And I'm Jill Wiesenthal. You can follow me at the Stalwart. Follow R. Calf usa. It's at rcafusa. Follow our producers Kerman Rodriguez at Kerman, Armand Dashiell Bennett at dashbot, and Kale Brooks at Kale Brooks. For more Odd Lots content, go to bloomberg.comoddlots for the daily newsletter and all of our episodes and you can chat about all of these topics 24. 7 in our Discord Discord GG oddlots.

[Tracy Alloway]

And if you enjoy Odd Lots, if you like it when we do these agricultural episodes, then please leave us a positive review on your favorite podcast platform. And remember, if you are a Bloomberg subscriber, you can listen to all of our episodes absolutely ad free. All you need to do is find the Bloomberg Channel on Apple Podcasts and follow the instructions there. Thanks for listening.

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[Bill Bullard]

Forward.