Hospitals and high-tech manufacturers puckered up when Hurricane Helene blew through North Carolina.
The storm threatened to flood out the quartz supply for semi-conductors and solar, and some health care providers had to ration surgeries over thin supplies of IV solutions.
Chip-makers and solar arrays require high-purity quartz sand for high-heat manufacturing. About 80% of the world supply is mined in Pine Ridge, N.C., a town of 2,300 up in the hills and cut off by the hurricane. Two companies — one owned by Belgians and the other by the French — control the mining.
Sixty percent of the IV fluids market is supplied by a single facility in Marion, N.C., Baxter International, with headquarters in Illinois. Baxter enjoys such dominance because of low prices for IV solutions combined with high entry cost because of sterility requirements. Baxter has been buying up and spinning off companies since the 1930s on its way to this peculiar position.
The quartz miners said they endured only minor damage from the storm and would be back in operation quickly. Likewise Baxter. If the mines shut down for three more weeks, the world economy could spin out of control.
It illustrates how concentrated our basic industries are. Take a look at food and agriculture.
The top four companies control 90% of the cotton seed market, 80% of corn seed, 70% of soybean seed, 67% of pork, and 62% of agrichemicals, according to the advocacy group Farm Action.
“Around three dozen corporations now dictate the lines of development and terms of trade for almost every industry involved in the growing, processing, and distribution of food in America,” Farm Action said in its September report. “Decades of lax antitrust enforcement have culminated in these unprecedented levels of concentration.”
When the Tyson pork plants in Waterloo and Storm Lake shut down briefly at the height of the Covid pandemic, meat prices exploded. The supply chain is so tightly consolidated it almost shattered under the strain. President Trump had to order workers into the plants for fear of hyperinflation.
My basic safety and security is not threatened by Nike dominating the tennis shoe market. Threaten my pork and we have issues to talk about.
Except, we don’t talk about those issues much.
The USDA is not breaking up poultry companies fixing bids and wages among themselves. Mark Cuban, who helped Kamala Harris pile up $1 billion in donations, wouldn’t be hurt if Federal Trade Commission Chair Lina Khan took a hike. She barely made a wave yet. Because she at least talks up anti-trust, donors would rather she move on with Biden.
How it is that only two foreign-owned companies control a resource vital to our national security? Or how it is that companies in Brazil and China control most of our US meat production, and have a chokehold on Iowa? When Chairman Bob Peterson told Iowa leaders to quit speaking harshly about IBP putting the screws to places like Storm Lake, it hurt their feelings. So everyone piped down and backed off.
That’s how you snuff out independent pork production. It is not just that meat production is a “mature” industry — it is as old as the shepherds. The consolidation was forced and by design. The independent sow manager was a low-cost supplier but he was not owned. That had to change.
We also recall the feed companies, Walnut Grove and Moorman’s, and the regional seed suppliers like Mell-O Dent, gobbled up by consolidation and lost to us. Those businesses created wealth, spread out risk and supported a diverse supply of livestock and family farms. The money men cannot stand to see wealth reside and grow for people in Alta when they could take that profit for their own. So they did. Nobody stood in the way. We lost that economy in my adult lifetime.
That’s how you end up with a handful of companies controlling your food and basic security. In quaint days, we regulated industries like power companies that control the basics of life. MidAmerican Energy and Alliant Energy may split Iowa’s power market between themselves but they at least have to ask state regulators if they can take a rate increase.
Consolidation should be an election issue. It’s not. Fortunately, a second hurricane did not hit the IV plant and disable it. It took years for the pork markets to recover from the shock of the pandemic. We’re eating on a prayer as the consolidators do their thing, eliminating family farms and the like while holding your economic security in their hands.
Art Cullen is the editor of the Storm Lake Times Pilot in Northwest Iowa, where this column appeared. For more columns and editorials, please consider a subscription to the Times Pilot. Or, if you wish, you can make a tax-deductible gift to the Western Iowa Journalism Foundation to support independent community journalism in rural Iowa. Thanks.
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There’s a lot of food for thought here. Somehow all the eggs are appearing to be loading into one basket. As consumers, we are always looking for a bargain. It’s scary to think that some storm or pandemic has the ability to affect the world’s economy because an outfit had the ability to offer its goods at lower prices longer than the small producers and then gobbled up competition. We like a bargain, but we seem to be destined towards paying for it the end.
And you know all too well the impact consolidation had had on farm communities, Art. When I was doing some freelance work out your way a couple of years ago, a banker in Sac City our age who grew up there said when he was kid you could fill a school bus in two square miles from all the farm families. Not so now.
Deere announced new products coming out of Waterloo just a few months before it began laying off several hundred workers -- after mounting hiring fairs just three years ago coming out of the pandemic. The plant floor, a large portion of which was devoted to tractor cab assembly, was under renovation in preparation for those new products - a new massive tractor, and, earlier, a self propelled "autonomous" tractor. Impressive products, but they take fewer people to operate, and maybe to produce. With earnings running 30 percent below the previous year, making bigger products at proportionately lower unit cost, and moving some of the traditional work to places where it can be made less expensively, probably makes corporate economic sense, but at a socio-economic cost within a community that one can only hope has bottomed out. Kind of like laying out and printing newspapers at regional design centers and printing facilities. Or the automakers cranking out more and bigger trucks and SUVs and much fewer cars and light pickups, and dumping former plant sites on local communities to redevelop.
Interesting that you quote old IBP CEO Robert W. "Bob" Peterson. I remember about 40 years ago he was quoted in The Des Moines Register as saying, "We like to think of ourselves as the Oakland Raiders of the meatpacking industry." That was back when John Madden, Ken "The Snake" Stabler & Co. were the unquestioned badasses of the NFL. Mr. Peterson was probably more accurate in the long run than he could have even fathomed. The Raiders have moved from Oakland to L.A., back to Oakland and now to Las Vegas. Snake and Big John are dead and gone and "Da Raidahs" have had just two winning seasons since their last Super Bowl appearance in 2002-03. IBP ownership changed hands like the Raiders changed cities and successor Tyson's profits dropped by half and half again in 2022 and 2023, respectively.