Beef prices
President Trump is officially planning to print 12 billion dollars (money that doesn’t exist) and give it to soybean farmers who are suffering from a price collapse caused by Chinese retaliation regarding tariffs. If you haven’t been informed, in 2024, the United States exported 50% of its soybeans, and China bought half of that amount, meaning China purchased a quarter of U.S. harvests.
While soybean farmers are expected to lose 100 dollars per acre this year [0.4 ha], beef prices are at an all-time high. President Trump’s initial reaction was to blame farmers and ranchers for greed; however, within 24 hours, pushback from his conservative rural voter base forced him to change his stance and blame the four largest processors, who control 85 percent of the U.S. beef market, for collusion and corruption. In 1980, those four companies only controlled 36 percent of the market.
Despite this consolidation, concentration, and centralization being intended and difficult to prove corruption, there has been an ongoing debate about this monopolization for years. I doubt anyone will ever be charged with anything, even if guilty.
However, I want to point out something else; the relativity of prices. In 1961, when my parents bought the main property that eventually became Polyface, the price per acre of land was 90 dollars. On one acre, you could raise half a calf. At that time, calves were sold for around 180 dollars each, live weight, meaning half a calf cost 90 dollars. Looking from another perspective, one acre would feed about one-fifth of a cow and her calf until weaning.
A calf was worth 180 dollars, so one-fifth would cost about 35 dollars per acre. This means that over three years, production would equal the market value of the land (35 dollars x 3 years = 105 dollars). Today, that land is worth 9000 dollars per acre. To achieve the same production-to-market-value ratio (one-third of market value per year), you would need a calf worth 15,000 dollars (one-fifth is 3000 dollars). Meanwhile, today similar calves are selling for 2000 dollars each, and everyone is panicking.
Frankly speaking, our property was a wreck, covered with rocky outcrops. Let’s assume then that the price of farmland in our area, if it were decent, would be twice as much (180 dollars per acre) as what our family paid for our land. Suddenly our calculations yield an equivalent of 7500 dollars, which is still nearly four times the amount farmers currently receive for this "walking gold", that is, for calves.
This, my friends, is the result of decades of USDA market interventions aimed at ensuring cheap food products. Why are we losing farmers? We can blame many factors for this, but generally speaking, food prices are not keeping pace with overall farming costs. The same proportional analysis can be applied to labor, machinery, buildings, and insurance.
If we had similar proportions to today’s expenses, ground beef would cost over 25 dollars per pound. By the way, this would restore historical price normalcy. In 1980, Americans spent 18 percent of their income on food. Today it is 9 percent. In 1960, it was 25 percent. In this case, the ratios are also about 3: if ground beef currently costs 8 dollars, then 3 times more is 24 dollars, and 4 times more (1960) is 32 dollars.
You can play with numbers all day, but they all lead to similar conclusions. When a culture reveres the politics of cheap food to accumulate things and entertainment with the savings, our food turns to waste, and human relationships to mush. Only when we restore farmers – good farmers – to a significant position will other social ills begin to heal.
I wonder what American spending would look like if decent, non-industrial hamburgers were three times more expensive? What would they have to cut back on to cover the higher price of healthy beef?
Joel Salatin