Integration Nation: How Big Ag Cornered the Food Market

How does our food make it from the farm fields to the table? The answer used to be simple, but in the past 100 years, it’s gotten a lot more complicated and increasingly hidden from the public eye. 

The term supply chain is used to describe the journey that any product makes from start to finish. For clothes it might start with cotton, for electronics it starts in an ore mine, and for food, the journey begins with seeds and soil.

When it comes to food, we used to be able to depend on farmers to be in control of what they raised. It made sense for the farmer to control food production, working with processors and stores to make sure that beef or potatoes produced were safe and ready to make it into our grocery bags. But as our economy was co-opted by larger and larger corporations, this way of food and farming gave way to the age of international food and agriculture monopolies.

Growth-prioritizing companies like JBS and Cargill stepped on the scene with the view that food is a golden opportunity to make a buck — after all, everyone needs to eat. To them, controlling the food supply chain has led to unimaginable profit and power. Oh and feeding people? For them it’s barely an afterthought.

But how did we get here? Well, the Big Ag giants figured that the more steps they control in a potato or cow’s journey from the field to the table, the more say they have in what production will look like and cost, how workers will be treated, and how much a product can sell for once it hits the shelves of a store. And if you don’t like it, you can get out of the business all together. 

Big Ag giants justified this power grab in the name of efficiency: controlling the majority of the food supply chain would drive down production costs, ultimately reducing prices for the consumer and leading to beneficial innovation. But this isn’t necessarily true. The past few decades have been riddled with price fixing and collusion by these corporate giants, leaving farmers with less and less compensation for their livestock and consumers with sticky, ever-increasing prices that are quick to go up but slow to drop back down. Just this year, we saw Big Meat companies under fire for fixing meat prices at all time highs while record numbers of American families faced food insecurity.

For international corporate giants, controlling one part of the food supply chain is not enough. There is more money to be made and market power to be gained if these companies cooperate with one another, making sure to control the movements of food from field to shelf as much as possible. They’ve come up with a few clever ways to do this:

Vertical Integration: When one company controls two or more stages of food production, processing, and distribution that would normally be operated by separate companies. 

Tyson Foods is a great example: they own and oversee a poultry breeding stock, the chicks/chickens that contract growers raise, the processing of the chickens, and the transportation of the product to the retailer. 

Tyson ownership of the chickens that growers raise for example, means that growers have no say in the selling price of the chickens they’ve raised or how those chickens are raised. 

Research from The Roosevelt Institute shows that at this point in time, vertical integration doesn’t necessarily even reduce costs for corporations, but it does build power. This finding is in line with Farm Action’s recently commissioned paper, “The Food System: Concentration and Its Impacts.”

Backward Integration: Similar to vertical integration, but it typically starts with the retail stores we know, like Kroger, Walmart and Amazon. Backward integration is when one of these retail companies buys or merges with a company that is already making the product they want to control and sell. 

Gone are the days of a dairy producer getting a fair price for their milk, Walmart has invested in milk bottling plants. Now Walmart can produce and sell milk, setting the price they want. 

Making the most profit from this milk means controlling the price consumers pay and eliminating the need to even have a farmer. This has led to a food system that overcharges customers, abuses and underpays workers, keeps dairy cows locked up in stalls their entire lives and pushes the cost of pollution off on the community and taxpayers.  

Communities of color are particularly likely to deal with the harmful environmental effects of these practices. But when there’s money to be made you can bet that these corporations will do whatever it takes, often at the expense of marginalized communities. 

Horizontal Integration: Refers to expanding control at the same level across the supply chain. Ever walk through a grocery store isle and marvel at the hundreds of colorful cereal boxes? According to the most recent data published by Dr. Mary Hendrickson and her team in “The Food System: Concentration and Its Impacts” 83% of the cereal you see is owned by only 3 companies. This is horizontal integration.

A great example of this is the Heinz and Kraft Foods merger, where this food and beverage company now owns over 200 household food brands as of 2020.

So What Now?

Supply chain integration is not problematic on its own. When we think of a local farmer or a cooperative owning and breeding their own chickens, processing and packaging them, then selling them to a grocery store, we see a resilient local food system at work. The idea is that many farmers can do this at once, creating healthy market competition and fair prices. The problem arises when corporations put too many of our eggs in one basket. 

Unbridled integration by a few corporations has led to a stark decrease in market competition, and allowed these few corporations to amass unprecedented power and control over the way billions of people work and eat. When one link in these massive, integrated chains breaks, the effects are felt by many, with vulnerable communities hit the hardest. 

The bottom line is that we need to invest in strong, resilient local and regional food systems. And resiliency means that we do not put all of our proverbial eggs (in this case, the world’s food supply) in one basket.

Written by Anna Straus; designed and edited by Angela Huffman; concept developed from “The Food System: Concentration and Its Impacts” report by Mary K. Hendrickson, Philip H. Howard, Emily M. Miller, and Douglas H. Constance.