Oversupply or Monopoly?
— by Jerry Sikorski
In 1971, when I returned to the ranch after serving in Vietnam, we were selling our wheat for about $2.70 per bushel. A bushel of wheat weighs sixty pounds and will make forty-five loaves of bread. Back then bread sold for around thirty cents a loaf, so we were receiving six cents out of a thirty-cent loaf, or 20% of the retail value of our product. Today, we now can get about $2.50 per bushel or five to six cents out of a $2.10 loaf, or 2.5% of the retail value. Tiger Woods gets paid ten cents for having his picture on each box of Wheaties, and the farmer gets five cents for raising the wheat.
Some say producers are in this crisis because we simply produce too much wheat. In fact, world grain stocks are less now than in 1970. At the same time, the US population has grown from 200 million in 1970 to 260 million today. And the world population has grown from 3.7 billion in 1970 to six billion now. So, I do not believe there is a glut of wheat in the world nor in the US. If there was, and if the marketplace was truly competitive, farmers should receive more for wheat and consumers shouldn´t pay so much for bread. If you´ve ever played the board game “Monopoly,”* you can understand the situation. The winner is the one who controls the marketplace, sending losing players to the couch to pout and eventually squeezing everyone else until they go broke.
Today, three or four companies control most of the processing and distribution of all beef, pork, chicken, and grain in the US. In addition, there are only a few companies that control the US grocery industry. These companies have stolen the farmers´ and ranchers´ share of the retail dollar, draining the lifeblood from the family farm and threatening our safe, sustainable, and dependable food supply.
What high school or college graduate would be willing to come back to the impoverished farm or ranch when so many better opportunities are out there? That must be why the average age of the US farmer is fifty-eight.
Slaying this “Monopoly” dragon will require a massive effort. Producers, consumers, and our environment will be better off when we do. Like most worthwhile endeavors, however, it will be neither quick nor easy.
— Jerry Sikorski, Willard, Montana, 406-775-6535