Fast Food Nation: What The All-American Meal is Doing to the World (18 page)
Read Fast Food Nation: What The All-American Meal is Doing to the World Online
Authors: Eric Schlosser
H
ANK WAS THE FIRST PERSON
I met in Colorado Springs. He was a prominent local rancher, and I’d called him to learn how development pressures and the dictates of the fast food industry were affecting the area’s cattle business. In July of 1997, he offered to give me a tour of the new subdivisions that were rising on land where cattle once roamed. We met in the lobby of my hotel. Hank was forty-two years old and handsome enough to be a Hollywood cowboy, tall and rugged, wearing blue jeans, old boots, and a big white hat. But the Dodge minivan he drove didn’t quite go with that image, and he was too smart to fit any stereotype. Hank proved to be good company from the first handshake. He had strong opinions, but didn’t take himself too seriously. We spent hours driving around Colorado Springs, looking at how the New West was burying the Old.
As we drove through neighborhoods like Broadmoor Oaks and Broadmoor Bluffs, amid the foothills of Cheyenne Mountain, Hank pointed out that all these big new houses on small lots sat on land that every few generations burned. The houses were surrounded by lovely pale brown grasses, tumbleweed, and scrub oak — ideal kindling. As in southern California, these hillsides could erupt in flames with the slightest spark, a cigarette tossed from a car window. The homes looked solid and prosperous, gave no hint of their vulnerability, and had wonderful views.
Hank’s ranch was about twenty miles south of town. As we headed there, the landscape opened up and began to show glimpses of the true West — the wide-open countryside that draws its beauty from the absence of people, attracts people, and then slowly loses its appeal. Through leadership positions in a variety of local and statewide groups, Hank was trying to bridge the gap between ranchers and environmentalists, to establish some common ground between longtime enemies. He was not a wealthy, New Age type playing at being a cowboy. His income came from the roughly four hundred head of cattle on his ranch. He didn’t care what was politically correct and had little patience for urban environmentalists who vilified the cattle industry. In his view, good ranchers did far less damage to the land than city-dwellers. “Nature isn’t an abstraction for me,” he said. “My family lives with it every day.”
When we got to the ranch, Hank’s wife, Susan, was leading her horse out of a ring. She was blond and attractive, but no pushover: tall, fit, and strong. Their daughters, Allie and Kris, aged six and eight, ran over to greet us, full of excitement that their dad was home and had brought a visitor. They scrambled into the minivan and joined us for a drive around the property. Hank wanted me to see the difference between his form of ranching and “raping the land.” As we took off onto a dirt road, I looked back at his house and thought about how small it looked amid this landscape. On acreage hundreds if not thou-sands of times larger than the front lawns and back yards surrounding the mansions of Colorado Springs, the family lived in a modest log cabin.
Hank was practicing a form of range management inspired by the grazing patterns of elk and buffalo herds, animals who’d lived for millennia on this short-grass prairie. His ranch was divided into thirty-five separate pastures. His cattle spent ten or eleven days in one pasture, then were moved to the next, allowing the native plants, the blue grama and buffalo grass, time to recover. Hank stopped the minivan to show me a nearby stream. On land that has been overgrazed, the stream banks are usually destroyed first, as cattle gather in the cool shade beside the water, eating everything in sight. Hank’s stream was fenced off with barbed wire, and the banks were lush and green. Then he took me to see Fountain Creek, which ran straight through the ranch, and I realized that he’d given other guests the same tour. It had a proper sequence and a point.
Fountain Creek was a long, ugly gash about twenty yards wide and fifteen feet deep. The banks were collapsing from erosion, fallen trees and branches littered the creek bed, and a small trickle of water ran down the middle. “This was done by storm runoff from Colorado Springs,” Hank said. The contrast between his impact on the land and the city’s impact was hard to miss. The rapid growth of Colorado
Springs had occurred without much official planning, zoning, or spending on drainage projects. As more pavement covered land within the city limits, more water flowed straight into Fountain Creek instead of being absorbed into the ground. The runoff from Colorado Springs eroded the land beside the creek, carrying silt and debris downstream all the way to Kansas. Hank literally lost part of his ranch every year. It got washed away by the city’s rainwater. A nearby rancher once lost ten acres of land in a single day, thanks to runoff from a fierce storm in Colorado Springs. While Hank stood on the crumbling bank, giving an impassioned speech about the watershed protection group that he’d helped to organize, telling me about holding ponds, landscaped greenways, and the virtues of permeable parking lots covered in gravel, I lost track of his words. And I thought: “This guy’s going to be governor of Colorado someday.”
Toward sunset we spotted a herd of antelope and roared after them. That damn minivan bounced over the prairie like a horse at full gallop, Hank wild behind the wheel, Allie and Kris squealing in the back seat. We had a Chrysler engine, power steering, and disk brakes, but the antelope had a much superior grace, making sharp and unexpected turns, about two dozen of them, bounding effortlessly, butts held high. After a futile chase, Hank let the herd go on its way, then veered right and guided the minivan up a low hill. There was something else he wanted to show me. The girls looked intently out the window, faces flushed, searching for more wildlife. When we reached the crest of the hill, I looked down and saw an immense oval structure, shiny and brand-new. For an instant, I couldn’t figure out what it was. It looked like a structure created by some alien civilization and plopped in the middle of nowhere. “Stock car racing,” Hank said matter-of-factly. The grandstands around the track were enormous, and so was the parking lot. Acres of black asphalt and white lines now spread across the prairie, thousands of empty spaces waiting for cars.
The speedway was new, and races were being held there every weekend in the summer. You could hear the engines and the crowd from Hank’s house. The races weren’t the main problem, though. It was the practice runs that bothered Hank and Susan most. In the middle of the day, in one of America’s most beautiful landscapes, they would suddenly hear the drone of stock cars going round and round. For a moment, we sat quietly on top of the hill, staring at the speedway bathed in twilight, at this oval strip of pavement, this unsettling omen. Hank stopped there long enough for me to ponder what it meant, the
threat now coming his way, then drove back down the hill. The speedway was gone again, out of sight, and the girls were still happy in the back seat, chatting away, oblivious, as the sun dropped behind the mountains.
RANCHERS AND COWBOYS HAVE
long been the central icons of the American West. Traditionalists have revered them as symbols of freedom and self-reliance. Revisionists have condemned them as racists, economic parasites, and despoilers of the land. The powerful feelings evoked by cattlemen reflect opposing views of our national identity, attempts to sustain old myths or create new ones. There is one indisputable fact, however, about American ranchers: they are rapidly disappearing. Over the last twenty years, about half a million ranchers sold off their cattle and quit the business. Many of the nation’s remaining eight hundred thousand ranchers are faring poorly. They’re taking second jobs. They’re selling cattle at break-even prices or at a loss. The ranchers who are faring the worst run three to four hundred head of cattle, manage the ranch themselves, and live solely off the proceeds. The sort of hard-working ranchers long idealized in cowboy myths are the ones most likely to go broke today. Without receiving a fraction of the public attention given to the northwestern spotted owl, America’s independent cattlemen have truly become an endangered species.
Ranchers currently face a host of economic problems: rising land prices, stagnant beef prices, oversupplies of cattle, increased shipments of live cattle from Canada and Mexico, development pressures, inheritance taxes, health scares about beef. On top of all that, the growth of the fast food chains has encouraged consolidation in the meatpacking industry. McDonald’s is the nation’s largest purchaser of beef. In 1968, McDonald’s bought ground beef from 175 local suppliers. A few years later, seeking to achieve greater product uniformity as it expanded, McDonald’s reduced the number of beef suppliers to five. Much like the french fry industry, the meatpacking industry has been transformed by mergers and acquisitions over the last twenty years. Many ranchers now argue that a few large corporations have gained a stranglehold on the market, using unfair tactics to drive down the price of cattle. Anger toward the large meatpackers is growing, and a
new range war threatens to erupt, one that will determine the social and economic structure of the rural West.
A century ago, American ranchers found themselves in a similar predicament. The leading sectors of the nation’s economy were controlled by corporate alliances known as “trusts.” There was a Sugar Trust, a Steel Trust, a Tobacco Trust — and a Beef Trust. It set the prices offered for cattle. Ranchers who spoke out against this monopoly power were often blackballed, unable to sell their cattle at any price. In 1917, at the height of the Beef Trust, the five largest meatpacking companies — Armour, Swift, Morris, Wilson, and Cudahy — controlled about 55 percent of the market. The early twentieth century had trusts, but it also had “trustbusters,” progressive government officials who believed that concentrated economic power posed a grave threat to American democracy. The Sherman Antitrust Act had been passed in 1890 after a congressional investigation of price fixing in the meatpacking industry, and for the next two decades the federal government tried to break up the Beef Trust, with little success. In 1917 President Woodrow Wilson ordered the Federal Trade Commission to investigate the industry. The FTC inquiry concluded that the five major meatpacking firms had secretly fixed prices for years, had colluded to divide up markets, and had shared livestock information to guarantee that ranchers received the lowest possible price for their cattle. Afraid that an antitrust trial might end with an unfavorable verdict, the five meatpacking companies signed a consent decree in 1920 that forced them to sell off their stockyards, retail meat stores, railway interests, and livestock journals. A year later Congress created the Packers and Stockyards Administration (P&SA), a federal agency with a broad authority to prevent price-fixing and monopolistic behavior in the beef industry.
For the next fifty years, ranchers sold their cattle in a relatively competitive marketplace. The price of cattle was set through open bidding at auctions. The large meatpackers competed with hundreds of small regional firms. In 1970 the top four meatpacking firms slaughtered only 21 percent of the nation’s cattle. A decade later, the Reagan administration allowed these firms to merge and combine without fear of antitrust enforcement. The Justice Department and the P&SA’s successor, the Grain Inspection, Packers and Stockyards Administration (GIPSA), stood aside as the large meatpackers gained control of one local cattle market after another. Today the top four meatpacking firms — ConAgra, IBP, Excel, and National Beef— slaughter about 84
percent of the nation’s cattle. Market concentration in the beef industry is now at the highest level since record-keeping began in the early twentieth century.
Today’s unprecedented degree of meatpacking concentration has helped depress the prices that independent ranchers get for their cattle. Over the last twenty years, the rancher’s share of every retail dollar spent on beef has fallen from 63 cents to 46 cents. The four major meatpacking companies now control about 20 percent of the live cattle in the United States through “captive supplies” — cattle that are either maintained in company-owned feedlots or purchased in advance through forward contracts. When cattle prices start to rise, the large meatpackers can flood the market with their own captive supplies, driving prices back down. They can also obtain cattle through confidential agreements with wealthy ranchers, never revealing the true price being paid. ConAgra and Excel operate their own gigantic feedlots, while IBP has private arrangements with some of America’s biggest ranchers and feeders, including the Bass brothers, Paul Engler, and J. R. Simplot. Independent ranchers and feedlots now have a hard time figuring out what their cattle are actually worth, let alone finding a buyer for them at the right price. On any given day in the nation’s regional cattle markets, as much as 80 percent of the cattle being exchanged are captive supplies. The prices being paid for these cattle are never disclosed.
To get a sense of what an independent rancher now faces, imagine how the New York Stock Exchange would function if large investors could keep the terms of all their stock trades secret. Ordinary investors would have no idea what their own stocks were really worth — a fact that wealthy traders could easily exploit. “A free market requires many buyers as well as many sellers, all with equal access to accurate information, all entitled to trade on the same terms, and none with a big enough share of the market to influence price,” said a report by Nebraska’s Center for Rural Affairs. “Nothing close to these conditions now exists in the cattle market.”
The large meatpacking firms have thus far shown little interest in buying their own cattle ranches. “Why would they want the hassle?” Lee Pitts, the editor of
Livestock Market Digest
, told me. “Raising cattle is a business with a high overhead, and most of the capital’s tied up in the land.” Instead of buying their own ranches, the meatpacking companies have been financing a handful of large feedlot owners who lease ranches and run cattle for them. “It’s just another way of controlling
prices through captive supply,” Pitts explained. “The packers now own some of these big feeders lock, stock, and barrel, and tell them exactly what to do.”