Ruthless economics

 

I admit it: I sometimes shop in soulless big-box stores like Walmart. I'm not offering this confession as a member of Shopaholics Anonymous. I'm admitting that I'm part of the larger problem that figures in our cover story "Big Beef."

When I buy from big-box stores, I support economic forces that value high volume and low prices -- figured simplistically in dollars and cents -- more than anything else. The big-box corporations constantly pressure their suppliers to make products more cheaply, regardless of the consequences.

That pressure can be cast as a benefit to society, but it's also one reason that U.S. jobs are vanishing, as companies shift manufacturing to countries where workers are paid much less and frequently exploited. It also encourages low wages and bad conditions in U.S. workplaces, and often has serious environmental impacts. So whenever I join the hordes of happy customers lugging big new TVs and other goodies from these stores, I feel rather melancholy, because the full costs -- what some economists call the "externalities" -- are not figured into our so-called "bargains."

In "Big Beef," Stephanie Paige Ogburn, HCN's online editor, explores one Western aspect of this ruthless economy: Many of our region's ranchers and cattle feedlot operators are being squeezed painfully by the four huge meatpacking companies that serve as the middlemen for the nation's beef business.

The Big Four meatpackers say that they're simply maximizing efficiency to give consumers the lowest prices. But they control so much of the beef market, critics accuse them of manipulating the prices they pay for cattle, forcing ranchers and feedlot operators to accept whatever terms they dictate.

There's no doubt that ranchers are in trouble; for a range of reasons, including inflated land prices, thousands give up every year. The consequences are often heartbreaking: Rural communities dry up. Individuals and families are thrown into hardship. And we lose stewards of private land who battle weeds and hold off subdivisions.

What can we do about it? As Ogburn reports, the Obama administration is trying to reduce the meatpackers' power and create a more level playing field for ranchers. As citizens, we can pressure our politicians and the federal government to act. And we can start shopping more carefully, with a greater awareness of the full cost of the goods we buy.

In Bozeman, Mont., where I live, I buy bread, milk, eggs, kale, potatoes, cherries and meat produced by Montana's farmers and ranchers. I'm willing to pay more, not only because the food tastes better; there are fewer "externalities" involved and the spirit is always better than in the big-box stores. With a combination of increased oversight and more conscientious shopping, Westerners can help small ranchers compete with the big corporations. So, if you're like me, you're part of the problem -- but you also can decide to be part of the solution.

Tony Prato
Tony Prato
Mar 29, 2011 02:46 PM
Inflated, or more accurately, higher land prices do not necessarily cause troubles for ranches. It increases the value of their land and provides an alternative source of income to ranchers when they sell their ranch. On the other hand, for ranchers who want to stay in business, higher land values could result in higher property taxes, which tends to reduce profit margins.