Meat Wagon: Beef behemoth

If deals go through, three firms will own 90 percent of the U.S. beef market

Posted by Tom Philpott at 3:37 PM on 05 Mar 2008

In Meat Wagon, we round up the latest outrages from the meat and livestock industries.

You'd be hard-pressed to find an industry more consolidated than beef-packing. Just four companies slaughter 83.5 percent of cows consumed in the United States. In standard antitrust theory, a market stops being competive when the four biggest players control 40 percent.

The beef industry's extraordinary concentration gives the Big Four massive leverage to dictate how beef is raised and sold. Their economies of scale give them power to squeeze their smaller competitors, who have to scramble to keep costs down to survive. Their suppliers, known as "calf-cow" operations, essentially have to accept the price the Big Four offers.