Helena Independent Record: Montana cattle ranches hope to parlay federal aid into larger market share
With a little help from Sen. Jon Tester in the form of $150,000 in American Rescue Plan Act funds, a band of local ranchers intends to rustle a larger share of the cattle market away from the nation’s four major meat packing companies.
During a press conference at the downtown Helena office of Old Salt Co-op LLC, Tester touted the contribution of federal dollars to the private business, comprised of five founders across three Montana ranches, as a way to inject more competition into the industry, “expand markets for Montana ranchers and open up opportunities for Montana consumers to eat some of the best meat in the world.”
The U.S. Department of Agriculture reported in 2018 that four companies — Cargill and Tyson Foods and Brazillian companies National Beef Packing Co. and JBS SA — accounted for about 85% of all cuts of beef bought and sold in country that year.
“That’s not competition,” Tester said. “That is a situation where you can have four people literally go out on a golf course and determine what they’re gonna charge the consumer.”
“It’s a system, by the way that hasn’t worked, and it hasn’t worked for a hundred years,” he said.
One way in which those companies maintain a stranglehold on the cattle market is with their large-scale meat processing capabilities.
Old Salt plans to use the ARPA funds to help with a proposed $6 million expansion of the business into the processing side of the industry.
President Cole Mannix said in an interview April 6 that his family began ranching in the Blackfoot Valley in the middle of the 19th century.
Mannix has no official involvement in the day-to-day operations of Mannix Beef other than as head of Old Salt, the one-time cooperative turned corporation the family help found.
The partnering ranches — Sieben Live Stock Company in Cascade County, J Bar L Ranch in Sweet Grass County, and Mannix Beef in nearby Powell County — opened Old Salt Outpost inside Last Chance Gulch’s Gold Bar in October.
Mannix said the unassuming burger joint serves as a great way to introduce the Old Salt brand to the local market, but more importantly establishes a direct connection to local consumers and their wallets.
If the company is able to follow through with its plan to build a meat processing plant nearby, Mannix said it would be much better positioned to market cuts of home-grown beef to Montanans at prices that can compete with the grocery store chains.
“We’d like to control our own destiny a little bit better,” he said during Wednesday’s press conference. “To do that, to build relationships with customers we have a chance of actually knowing and who have a chance of actually knowing the landscapes where this food is coming from, we need processing, so that we can have confidence in the quality of the product and so that we can just, you know, get enough margin to operate a successful company.”
While Coronavirus Aid, Relief, and Economic Security Act dollars were meant to prop up businesses pummeled by the pandemic, Tester said these ARPA dollars coming directly from the federal government are intended to “get the economy going again.”
“There is an absolute demand for more competition in the marketplace, and part of that is making sure we can allow the little guys to grow and get bigger and be able to compete,” he said.
He said forthcoming Senate bills will help ensure that once smaller outfits like Old Salt obtain a larger share of the market, “the big guys can’t come in and undercut ’em and put ’em out of business.”
One such bill, the Cattle Market Transparency Act of 2021, Tester said, would install a special investigator within the Department of Agriculture to “make sure the big guys are much more transparent with what they’re doing.”
He said both that bill and the Cattle Price Discovery and Transparency Act, also first introduced last year, are set for a Senate committee hearing next week. Tester said he is confident both will see the light of day based on recent vote counts.
“(Senate Majority Leader Chuck) Schumer has offered me a vote on the special investigator bill,” he said. “The spot pricing bill … is the second one, and I think they’re going to be connected, and we’ll get them both. I think they’re both important for the folks in production agriculture.”
Meanwhile, the local little guys are growing. Mannix said at least two more Montana ranches will join the Old Salt fold in the coming months.
In total, 30 Montana businesses, including 17 meat processing projects, will be partially funded through this wave of ARPA dollars.