Highly concentrated

Like the great bulk of the orange juice it produces, the U.S. food system tends to be highly concentrated.

The latest evidence: Mary Hendrickson and William Heffernan of the University of Missouri's Department of Rural Sociology have come out with a pithy, no-nonsense compilation of concentration rates across the industry, available for download here at the National Farmers Union site.

Here are some of the report's telling revelations:

• The top four beef packers--Tyson, Cargill, Swift, and National Beef Packing--control 83 percent of the packing market, up from 72 percent in 1990. (Tyson's buyout of IBP a couple of years ago accounts for much of that jump.) That means if you're a cattle farmer, there aren't a whole lot of buyers out there clamoring for your stuff. You pretty much take what the big boys offer.

• The top four pork packers own 64 percent of the market, up from 37 percent in 1987. Smithfield foods, which reports earnings today (expect a post on that tomorrow) stands atop the pork-packing heap. Interestingly, it's the largest pork producer, too (the top four hog producers account for about half the overall market). That means Smithfield weilds huge power over hog prices. It can bring hogs onto to the market when it wants to lower the overall price, which helps its packing business; it can withhold hogs from the market to boost the price, which helps its hog raising business.

• The top three soybean crushers--BGJ perennial favorites Archer Daniels Midland, Bunge, and Cargill--control 71 percent of that market. (Soybean crushing feeds the large and growing market for soybean oil, the craze for soy protein in processed foods, and soy supplements into animal feed.) The three are also powerhouse soy traders. Their market heft, plus low soy prices engendered by U.S. farm subsidies and increased production in Brazil and Argentina, spells great profitability for these giants.

• Wal-Mart has bulled its way to the top of the global grocery market. It grossed $244 billion in global grocery sales in 2004; the number two player, France's Carrefour, managed $64.7 billion. Domestically, Wal-Mart rang up $66.4 billion. Its closest competitor is Kroger, which snagged $46 billion in sales. Wal-Mart's dominance of the domestic grocery market underlines the U.S. food system's reliance on cheap labor for profitability. This important article in The New York Review of Books (12/16/04) summarizes the recent literature on the retail behemoth's authoritarian strategies for keeping its vast workforce overworked and underpaid--a habit that's central to its business model.