By TERENCE CORRIGAN

Tennessee Correspondent

BELL BUCKLE, Tenn. — Bedford County farmers say they are suffering an economic bludgeoning from the meatpacking industry and seed companies.

From the trade war with China? Not so much.

On August 20, during the Congressional recess, Tennessee 4th District Rep. Scott DesJarlais met informally with Bedford County farmers in the side yard at Whit Lee’s farm in Bell Buckle. He immediately brought up the trade and tariffs war with China.

“I didn’t come here with the answer,” DesJarlais, a Republican, said. “I support the President. I know he appreciates the support the farmers and ranchers have given him. You’ve been a very patient group with his strategy.

“It’s kind of like watching somebody else play poker with your money – it’s a little unnerving. I know he cares and I know he’s trying, despite what you hear in the media.”

Judging by most of the comments at the meeting, he didn’t need to worry about Bedford County farmers’ continuing support for President Trump. However, farmer Samuel Davis expressed his worry that if the trade war goes on too long, China will shop other countries for agricultural products.

“Soybeans, corn, pork, and beef – we’re all being squeezed by this,” Davis said. “We’ve been in a war with (China) for a long time, but at some point we’re going to have to concede something and move because they are going other places.”

Not everyone agreed. “People are too shortsighted. You have to look down the road. (China) will be back,” said David Womack Jr. “The trade war’s the best thing that’s happened to ag in 50 years.”

He floated a lighthearted proposal he said would help the agriculture industry: “Is there any way we could shut down the USDA? They’re our worst enemy.”

The biggest threat, say local farmers, is from the consolidation and alleged price-fixing by meatpackers and seed companies. “We need to be aware that the packers and seed companies are now multi-nationals,” Lee said. “It’s all getting concentrated, more and more, in fewer hands.

“We all understand the economies of scale, but some of us down here see what we perceive to be market manipulation by the large packers. It’s something that needs to be looked at. If they are in collusion, ultimately the consumer pays for it and it hurts us down here.

“We talk about free and fair trade, it’s ultimately these multinationals that reap the benefits,” he continued. “They need to be looked at in some way to level the playing field.”

Local cattle growers are worried about the increasing practice of meatpacking companies to own outright or have ownership-like contracts (called “captive supplies”) for the majority of the beef cattle, leaving it up to the companies to set the price of how much they will pay for cattle.

This practice now results in up to 70 percent of the cattle going to packers from captive supplies. With so much control in the hands of just a few packing companies, the profit margins for smaller, family, farms are being squeezed hard.

Any disruption in the markets results in lost profits, but the losses are all in the laps of producers, like those in Bedford County.

Before the August 9 fire at a Tyson beef packing plant in Finney County, Kan., that plant processed about 6,000 head a day – estimated to be about 5 percent of total national production. The fire occurred on a Friday, and on Monday any farmer who took cattle to market suffered a profit-crushing loss.

“The folks who sold cattle that week took a real bath,” said Bedford County Extension Agent John Teague.

Events like this fire have a temporary effect on the markets, and the downsides seem to be all on the farmers while there are windfalls seen for the packers.

“As soon as the news of the fire broke, cattle prices deflated,” wrote Dr. Andrew Griffith, University of Tennessee ag economics assistant professor. “This sent packer margins soaring …. It is difficult to really know how much impact the fire had on the facility …

“Could the facility be back to 30, 40, or 50 percent capacity in two or three weeks? It is hard to answer that from outside, but there’s an economic driver for Tyson to not share that information, in that they and other packers can make a lot of money in the near term.”

(Contained in an American Farm Bureau analysis last week was the information that Tyson had not yet released an official timeline for plant repairs, but officials stated on an investor call in early September it should be back online “in the course of the next couple of months.”)

Within days of the price drop, immediately following the plant fire, it seemed like prices might rebound. Other processors appeared to be picking up the slack and prices had begun to rise.

Such fluctuations are to be expected, said Davis. “It’s not that bad,” he opined. “They cry like the sky is falling. It got cloudy, but it didn’t fall. But I’m sure there were people out there that got their britches jerked down.”

But as the August market plunge fades and September prices emerge, recovery seems like it is going to be slow, according to Griffith.

“It is said that a shark can smell blood from miles away, which does not seem logical with all of the other smells in an ocean,” he wrote. “However, it is not hard to smell the blood that is freely flowing from the finished cattle market.

“In actuality, how can the market have any life left in it, given the precipitous price decline in the last month? Unfortunately, there is likely more downside in the finished cattle market, as late September and October are always tough months for cattle feeders.”