sHappy Friday and welcome to Food Fix. I’m now 34 weeks pregnant, and this baby is kicking so hard she must be trying to escape!
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Alright, let’s get to it –
Helena
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Welcome to the food baron era
For whatever reason, consolidation became the theme of the week. If it seems like you’re hearing more these days about consolidation in food, you almost certainly are.
“Food, Inc. 2” – a documentary film sequel to “Food, Inc.,” which debuted in 2008 – officially released in select theaters on Tuesday and goes live on various streaming platforms, including Amazon Prime, today. The film argues that the U.S. food system is far too consolidated to be resilient – or fair, for that matter. (Food Fix subscribers got a sneak peak on Tuesday, by the way.)
The big picture: The first “Food, Inc.” undoubtedly reshaped the conversation around food in the U.S., bringing what was once more academic-type criticism of the system squarely into the mainstream. It’ll be interesting to see if the sequel breaks through in a similar fashion.
D.C. premiere: “Food, Inc. 2” premiered in D.C. Tuesday night at the Burke Theater at the United States Naval Heritage Center. After the screening, I moderated a panel with filmmakers Robert Kenner and Melissa Robledo, producers Michael Pollan (“The Omnivore’s Dilemma”) and Eric Schlosser (“Fast Food Nation”), as well as some key figures in the film: Sens. Jon Tester (D-Mont.) and Cory Booker (D-N.J.) and Gerardo Reyes Chavez of the Coalition of Immokalee Workers (see pic here).
A key takeaway from the discussion: There’s no doubt the food system is more consolidated than it was when the original “Food, Inc.” came out back in 2008, but there are also small signs that Washington is now more willing to push back on this trend. One prime example: The FTC is fighting the Kroger-Albertsons merger.
There were several lawmakers and other notables in attendance on Tuesday, including Sens. John Hickenlooper (D-Colo.) and Raphael Warnock (D-Ga.); Reps. Eric Swalwell (D-Calif.), Chellie Pingree (D-Maine) and Gus Bilirakis (R-Fla.) as well as Morgan Freeman, Chris Tucker and Magnolia Pictures owners Mark Cuban and Todd Wagner.
Baron era: “Food, Inc. 2” isn’t the only reason consolidation in food is making headlines as of late – there’s also a new book out by Austin Frerick called “Barons: Money, Power, and the Corruption of America’s Food Industry,” which offers a searing critique of consolidation in food by zeroing in on some of the key players that have benefited from concentrated market power. “Barons” has been covered in several media outlets, from NPR to Axios.
Sidenote: Eric Schlosser (who wrote the forward for Frerick’s book) also has a piece out this week in The Atlantic on the state of consolidation in the food industry, bluntly writing: “A handful of companies now control the food system of the United States, stifling competition in ways not seen since the great trusts and monopolies of the late 1890s.” He looks at infant formula as a case study on what can go very wrong.
I recently caught up with Frerick to discuss his new book and why he believes Washington needs to step up antitrust enforcement across the board. The following conversation excerpt has been edited for length and clarity:
Helena: I was bracing myself to slog through this book, thinking maybe it would be dry and boring – consolidation isn’t exactly a thrilling topic – but that wasn’t my experience at all! This was easy to read and interesting throughout. At one point, you explain that your inspiration for writing the book was hearing about Iowa hog farmers who had a private jet emblazoned with the phrase “When Pigs Fly” – what a detail! Let’s start there. Why did that moment stick out to you?
Frerick: A big theme of the book is: What is a farmer? All of my barons identify as farmers, but they’re really just capital asset managers at this point. Especially in the dairy baron chapter, the real farmers are the undocumented farmers and a lot of them actually were farmers back home. Because of these trade agreements, a lot of them got displaced. They are the real farmers on these industrial operations.
I learned about the jet from someone at a dive bar in Des Moines, Iowa. That’s how the whole book started. When I heard this story, I thought ‘that’s good copy, but also what a fascinating symbol of what happened to Iowa.’ You just don’t see animals anymore. The animals slowly disappeared and the politics of rage filled the void. It’s wild to drive around rural America now and realize it’s producing the most it’s ever produced, economically, but none of that money is staying here. It’s being extracted. In the hog baron’s case, it’s extracted to Naples, Florida.
The system we have now is radical. It’s radical that one man owns 5 million hogs.
[Editor’s note: Animals are not commonly seen across Iowa because they are now largely housed indoors in Concentrated Animal Feeding Operations. The hog farmers featured in the book are Jeff and Deb Hansen, owners of Iowa Select Farms, which is now the fourth largest pork producer in the U.S. They responded to the book with an editorial in the Des Moines Register this week].
It does feel like there’s a gap between the public’s perception or understanding of family farmers and the level of wealth that a small subset have achieved – and the scale that these folks are operating at. At one point in the book, you talk about the link between growing concentration and income inequality to the politics of dissatisfaction and extremism. How do you see that playing out in Iowa or elsewhere?
After World War II, Congress commissioned a report on “how did it happen,” and one of their big findings was that monopolies finance fascists. After the war, we came in and broke up some of these monopolies. I’m an Iowan – Iowa is where it’s fallen apart the most. Iowa is the canary in the coal mine for America, for the food system, if we continue down this path. What were once middle class, family farmers, whatever you want to call them, are now low-wage workers for one robber baron.
People have a lot of pride in local businesses. When you’re a family farmer you are your own boss, you do your own thing. Working for a large operation can be trauma inducing. You go to a pastured dairy farm, for example, these are like pets for them – they know the personality of every cow. There’s stewardship to it. Obama won most rural counties in 2008 and you look now and Trump just runs away with it. People are angry. There’s this notion in the food system that well this is just technology, this is just efficiency. No, this was regulatory capture, corners were cut, things were exploited. If you treated pig manure like human manure, this model wouldn’t be economically viable. Right now the system heavily subsidizes this industrial model.
The hog family farm collapsed in my lifetime. People blamed themselves, not realizing that they were designed to fail by the system.
I think it’s hard for observers to distinguish when change is just the inevitable result of capitalism versus when it’s more of a systems failure, or policy gone awry.
I had such an ‘aha moment’ a few years ago. When I was employed at Yale I got to sit in some business classes and I realized, ‘Oh, the goal of any corporate executive is monopoly – that’s where profits are.’ There’s a fundamental tension between the government wanting competitive markets for innovation, for good prices for farmers and workers, and business people not wanting that. This is all just a cycle. You slowly see a Gilded Age form when there’s tons of monopolies in the economy and then we have a cleaning moment. This is not capitalism. These are cartels.
With every baron, there are so many subsidies going into them.
You could argue that we have the most activist or anti-monopoly FTC we’ve had in a while. We have an FTC chair, Lina Khan, who is very interested in this, and we have President Biden talking about consolidation, and specifically so-called greedflation and shrinkflation in the food space. Do you think any of this is making a difference?
I think there’s a strong argument to be made that Lina is one of Biden’s very best appointments. And one of his worst appointments was [Agriculture Secretary Tom Vilsack]. Lina is fascinating to watch. You know at this point that biographies are going to be written about her. She’s a rockstar. She walks into any law school in America and kids are inspired by her. She packs rooms. She’s changing the ship. You don’t change the anti-trust intellectual framework overnight, but you see tons of academic scholarship reflecting her framework. You’re seeing the merger guidelines re-written. Tons of new staff at the agency that reflect her values. In the last Gilded Age, these trusts weren’t broken up overnight, these cases take a long time to work their way through the courts. They might not result in breakups – they might result in regulation.
You have to think of a market like a garden. You have to prune a garden, you have to take care of a garden. If you don’t, an invasive species comes along and takes over the whole garden.
If you’re interested in consolidation in the food system, you can find “Barons” here.
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What I’m reading
Biden administration sets first-ever limits on ‘forever chemicals’ in drinking water (Associated Press). “The Biden administration on Wednesday finalized strict limits on certain so-called ‘forever chemicals’ in drinking water that will require utilities to reduce them to the lowest level they can be reliably measured. Officials say this will reduce exposure for 100 million people and help prevent thousands of illnesses, including cancers,” reports Michael Phillis. “The rule is the first national drinking water limit on toxic PFAS, or perfluoroalkyl and polyfluoroalkyl substances, which are widespread and long lasting in the environment. Health advocates praised the Environmental Protection Agency for not backing away from tough limits the agency proposed last year.”
Avian influenza in dairy cows hits two more states (DTN). “Confirmed cases of highly pathogenic avian influenza (HPAI) at North Carolina and South Dakota dairy farms now bring the total to eight states and 19 farms where a dairy herd has contracted H5N1 avian influenza,” reports Chris Clayton. “Officials stress that HPAI infections in dairy herds do not impact the food supply. Dairies are required to ensure only milk from healthy animals enters the food supply chain. Additionally, the pasteurization process of heating milk to a high temperature ensures milk and dairy products can be safely consumed, as confirmed by the Centers for Disease Control (CDC).”
FDA head calls on Congress to pass mandatory testing for lead in food (NBC News). “The head of the Food and Drug Administration urged Congress on Thursday to pass legislation mandating that food manufacturers test for lead in products imported to the United States,” reports Berkeley Lovelace Jr. “Dr. Robert Califf’s comment was in response to a question from Rep. Jamie Raskin, D-Md., the ranking member of the House Committee on Oversight and Accountability, during a hearing that touched on the FDA’s response to issues including lead-contaminated cinnamon applesauce pouches, which have sickened hundreds of children. The applesauce pouches, from Florida-based company WanaBana, were recalled in the fall after they were found to have high lead levels. The pouches were imported from Ecuador.”
Another red-blue divide: Money to feed kids in the summer (New York Times). “The new $2.5 billion program, known as Summer EBT, passed Congress with bipartisan support, and every Democratic governor will distribute the grocery cards this summer. But Republican governors are split, with 14 in, 13 out and no consensus on what constitutes conservative principle,” notes Jason DeParle. “One red-state governor (Sarah Huckabee Sanders of Arkansas) hailed the cards as an answer to a disturbing problem. Another (Kim Reynolds of Iowa) warned that they might increase obesity. Some Republicans dismissed the program as obsolete pandemic aid. Some balked at the modest state matching costs. Others hinted they might join after taking more time to prepare.”
US bets on climate friendly farming; experts doubt it is climate friendly enough (Reuters). “President Joe Biden‘s administration is offering farmers money for adopting practices that store carbon in the soil to fight climate change, but Reuters interviews with soil science experts and a review of U.S. Department of Agriculture research indicate doubt that the approach will be effective,” reports Leah Douglas. “Farm practices like planting cover crops and reducing farmland tilling are key to the USDA’s plan for slashing agriculture’s 10% contribution to U.S. greenhouse gas emissions as the U.S. pursues net-zero by 2050. Ethanol producers also hope those practices will help them secure lucrative tax credits for sustainable aviation fuel (SAF) passed in the Inflation Reduction Act (IRA).”
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