Montana Has More Cows Than People. Why Are Locals Eating Beef from Brazil?
nytimes.com
nytimes.com
Out of curiosity, I checked out the old salt store and they sell Tri tip for $16-20 per lb. I buy tri-tip on sale for $4/lb, and sometimes $3/lb.
The interesting bit is that I was recently in Switzerland, where it is common for farms to sell meat and dairy direct to the public. I noticed that the there the farm meat and cheese was 25-50% less than the super market.
Taken together, this really leaves me wondering what the difference is between these markets.
A big gap between farm price and wholesale would support the idea that farmers could be competitive by cutting them out. Indeed, it sounds like more are because farmers (or feedlots) are creating new processors.
Alternatively, if huge processors are hyper efficient, then what is going on in Switzerland? Why could I buy local meat and milk that was half off the market, and even cheaper than the US from farms?
https://www.epi.org/blog/iowa-governor-signs-one-of-the-most...
> Last Friday, this concerted attack on child labor safeguards further expanded. Iowa Governor Kim Reynolds signed an expansive bill enacting numerous changes to the state’s child labor laws, including:
> allowing employers to hire teens as young as 14 for previously prohibited hazardous jobs in industrial laundries or as young as 15 in light assembly work;
> allowing state agencies to waive restrictions on hazardous work for 16–17-year-olds in a long list of dangerous occupations, including demolition, roofing, excavation, and power-driven machine operation;
> extending hours to allow teens as young as 14 to work six-hour nightly shifts during the school year;
> allowing restaurants to have teens as young as 16 serve alcohol; and
> limiting state agencies’ ability to impose penalties for future employer violations.
https://en.wikipedia.org/wiki/Economy_of_Switzerland#Agricul...
This follows from Swiss neutrality -- you have to protect your domestic food supply to ensure food security.
Local milk might be more expensive than imported in Switzerland, but if you compare the prices of 1 gal (3.785L) milk in NYC (USD 5.53/CHF 4.96) vs Zurich (USD 7.24/CHF 6.49), it's more expensive in Zurich.
https://www.numbeo.com/cost-of-living/compare_cities.jsp?cou...
There are ways around it and if you’re rural enough and consistent you can get down to “close to non-sale prices”.
But you can never beat the sale prices as they’re often literally subsidized.
meanwhile a local farm has to hire a local butcher.
If this is truly the case then there is a large reckoning coming for everyone who currently benefits from this. That includes consumers. It just seems impossible for the current arrangement to last.
That reckoning may yet come but nobody expects it any time soon.
That depends. If you're selling the meat openly, it has to go through a USDA inspected facility. Most local butchers are not USDA inspected. The alternative is the sell "the animal". This typically means the customer buys the animal, the farmer takes it to the butcher of your choice, then you pay the butcher.
The butchering is the expensive part no matter what, but the individual farms can't compete with the assembly line style processing of the the giants to sell the meat directly. So they're only competitive on the meat price with the customer using a local butcher. Local butchers don't have the scale to be cheap, so the customer has to do the work if they want to save any money.
All that said, there's still a cost issue. The small producers just don't have the scale. They often treat their animals better too. I can get local pork for $1.80 hanging weight, plus a $30 processing fee on a half or whole hog. That's close to store prices for the raw cuts (shoulder, loin, etc). You really only get into the money savings if you cure your own bacon, corn your own ham, make your own sausage, etc. But most people aren't willing to do that level of work to save almost nothing. I do it because it's usually a superior product, I'm supporting local, and I know how my meat was raised.
Our former nanny came from a farm family. It was very interesting hearing her talk about various challenges of farm life - occasionally including high level costs/revenue.
Inspections were literally never mentioned. In fact, there was basically no talk of regulation. The only thing that came close was a business decision on the “standard” of product you raise. E.g. Free range captures higher dollar amount but has smaller throughput.
My impression is farming is extremely challenging for small farms because the margins are razor thin. Most meat products are essentially commodities and subject entirely to “market rates”. The only way to raise margins is to build a small, local brand.
The other big one is feed costs.
Small farms are basically impossible to be financially relevant unless subsidized by someone "with a real job" or deliberate things like CSA (community supported agriculture) and free child labor (small farm families still have lots of kids, which is a double benefit - free labor AND you can eat your own produce and "save" a ton that way).
I mean I buy lamb from my farmer neighbors at nice prices, but the local butcher shop is really expansive selling the same meat.
Dunno if they give me a friend price though.
Locally produced gravel is at least cheaper than big brand gravel ...
But the problem is that the buyers are inconsistent.
I remember a story before Covid about a chef in Boston(?) who was trying to buy everything locally. Meat, in particular, was expensive because everybody in the chain was pricing for if they only sold a small amount and had to cover the unsold rest as a loss. Everybody was de-risking the transaction at each transaction point.
Once the chef committed to buying a completely consistent amount every single month, he could buy meat for about 80% less since the chef was now the one who was now on the hook for losses.
Everybody always seems to write these articles starting from a proposition that "farmers are stupid"--farmers are NOT stupid. Farmers do things they way they do because it makes hard-nosed economic sense.
If you want a different result, you're going to need to change the economic system around the farmers. However, you need to understand that "consolidation" is always going to be more profitable than not. This is why farmers started co-ops in the first place.
Edit: here's a chart
https://www.certifiedangusbeef.com/cuts/poster/Beef-Cuts-Pri...
It's not the case because the middlemen exist for a reason, for the reason that it's cheaper to do it that way. Farmers don't have time/resources to slaughter their cows (they don't even have the feedlots that precede that step).
For a farmer to "vertically integrate" would mean to first add a feedlot which would mean purchasing some land, and putting feedlot equipment on it, and hiring (and managing) the people do operate it. That investment "demands" some return/profit, because it has the risk of being a complete failure, and the opportunity cost of what else that money could have been invested in, such as NVIDIA stock.
There are many more steps for that farmer to vertically integrate the rest of the supply-chain all the way to the retail customer, and all of those investments would demand a return/profit also. But you know what else you would need? A layer of management on top of all of it to keep track of everything. Having independent specialists to provide each function at scale actually saves money.
I was once reading a food blog, and the well meaning blogger had travelled to an obscure place and discovered a delicious locally made drink. But he liked the "peasant farmer" producer of the drink, and he didn't want them to get screwed so the blogger was offering up the source of this drink to anybody who would agree to pay double the standard wholesale rate to the farmer and then import it. (this is something like the FairTrade coffee model) But here's the thing: there is a huge time delay between paying the farmer for his product, and receiving the payment from the retail customer who is going drink the drink. If you have the cash to fund this operation (put up your money to buy the product in the third world, and wait to be repaid till the product is sold retail) you are going to have to consider both the time value of money (essentially the opportunity cost, considering you can buy govt bonds at no risk), and also the various risks you face (which the govt bonds don't face): the risk of an accident or theft of the truck that drives the product from the farm to the shipper; the risk of sinking of the ship; the risk etc. of all the next steps, the extra money you'd need to front to the various shippers, warehouses, customs delays, including costs like insurance, retail employee theft, etc. If you factor all those things in, paying the farmer double which means that truckload will cost double is essentially going to mean you will want double the profit at the other end, meaning this product is now twice as expensive compared to its competition. If the product's quality is twice as good, then it can bear that price; but "customers, please pay double so the farmer makes a few pesetas more and the middlemen just make their regular margins" is not a great selling point.
So, how does FairTrade coffee do it? Is the fair trade label just a label like "organic" whose meaning may contexualize to a lot less than you think? I'll leave it to you to decide.
FairTrade is a 501(c)3. It's standards are ok, but they lack the funds to enforce them properly.
Both are kinda better than nothing. Barely.
It's fascinating how cheap shipping can be, even over huge distances: the lower wages of developing nations is hardly eaten up by transport costs, so even stuff produced from the other side of an ocean or the planet can still be 'price efficient' compared to higher-wage local stuff in developed nations.
You’re missing the PPP arbitrage. When you can vertically integrate and process the cow in a third world country where median incomes are $1000/year, it would still be cheaper to buy from there and import, than your vertically integrated local farm in a country with $60000/year median incomes.
Even though labor costs aren’t everything, PPP affects everything from fuel prices to feed prices.
Also a while ago estimated it takes less energy to ship banana's from Central America by ship to New York than to ship them from New York to Scranton by truck. So local is kinda relative.
To directly answer the question in the headline, it seems that almost all locally produced beef in Montana becomes an “anonymous commodity crisscrossing the country”, so the origin of the product you get at the supermarket is a sampling of the overall U.S. market, and Montana beef is only 1% of that. And Brazilian beef is more than 1% of the U.S. market, so Montanans are more likely eating Brazilian beef.
My nearest independent butcher charges $39/lb for same. There's no question that meat prices at small outlets are far above those of the giant international meat packers.
Most people in Montana can’t afford to eat beef like that unless they get a quarter or half of a cow from a local farmer at a fraction of the price.
> In the next five years, Old Salt’s goal is to sell meat to 10,000 families around the country each year, up from around 800 now. It won’t be easy: Americans are used to purchasing ground chuck from the grocery store, not from a website.
But of course only locals can buy ground beef from Old Salt's website, by picking it at the company's refrigerators, for obvious reasons. Though the web site nicely obfuscates this:
https://www.oldsaltco-op.com/collections/fresh-cuts-ground/p...
https://nwmpa.com/epa-impact-statement/
We buy 1/2 a carcass worth of beef at a time from a small local place, and the cost is a lot better than costco. But we're worried at the immense pressure small shops like that are now under due to the enormous compliance costs for regulations that make little sense for the scale of work they do.
But then, apparently, the entire point of the company is to ship meat around the country in a copycat fashion, primarily outside of Montana, contributing to CO2 and plastic emissions? The story doesn’t make any sense.
Western canada has a ton of high quality trees. So furniture companies should move to this place, buy cheap input materials, create local economy, add value in a healthy way, and profit properly. Instead locals trying to do anything are killed by global pricing and it destroys businesses. It costs thousands of dollars more than it should just to make a CRATE to ship anything else. Absolute the opposite of proper sustainable economy