Farm Bankruptcies Shed New Light On Perils Of Big Agriculture

from Axios

Chris Petersen, a third-generation hog farmer who says “I bleed rural” and tears up at the fate of family and friends, has found a way to keep his small holding going, and avoid the exodus that so many are making. His grown son and daughter have, too.

But meanwhile, Petersen is at war with the big companies that he says are destroying the culture of smaller places like Clear Lake.

    • We are going down the same road as the Russians with the collective farm system,” he told me yesterday. “There, the government controlled it. Here, it’s the corporations.”

The big picture: While his is a dramatic rendering of the state of American agriculture, Petersen has a point: Across industries, the U.S. has become a country of monopolies.

    • Three companies control about 80% of mobile telecoms. Three have 95% of credit cards. Four have 70% of airline flights within the U.S. Google handles 60% of search. The list goes on. (h/t The Economist)
    • In agriculture, four companies control 66% of U.S. hogs slaughtered in 2015, 85% of the steer, and half the chickens, according to the Department of Agriculture. (h/t Open Markets Institute)
    • Similarly, just four companies control 85% of U.S. corn seed sales, up from 60% in 2000, and 75% of soy bean seed, a jump from about half, the Agriculture Department says. Far larger than anyone — the American companies DowDuPont and Monsanto.

As we have reported, some economists say this concentration of market power is gumming up the economy and is largely to blame for decades of flat wages and weak productivity growth.

    • The issue has become a higher-profile plank of both political parties — and could move to the center of the 2020 debate.

Farmers like Petersen are on the receiving end of all this concentration. Just in the five years from 2007 to 2012, the number of U.S. hog farms declined by 25%, the Agriculture Department says.

More here.

Posted in Business, Innovation and tagged , , .


  1. The title of this blog post immediately attracted me. I am from a very rural county in Northwest NJ and I have seen firsthand how difficult small agriculture can be and even some of the more “popular” tourist style farms also struggle. While seeing the immediate impacts on their workers and families as they are my neighbors, close friends and sometimes extended family. This is because certain large farming enterprises are trying to build a farm monopoly. Petersen mentions this as “collective farming” in this blogpost. In this post the statistics are proving his point. 4 companies are controlling more than half- three quarters of slaughtered animals and seed sales. Two of these companies are DuPont and Monsanto. Two companies I immediately have a negative bias of because I have heard of these companies causing bankruptcy and other issues much like they have cause harm to Petersens farm. While this is true capitalism, these two companies are too large, rich and powerful for these smaller farms to combat. This is a major ethical and legal issue not enough people have been paying attention to. This type of stuff has been going on for decades while these business monopolies thrive.

  2. More and more we hear about markets getting cornered by bigger and bigger corporations and agriculture is no different. Between the big corporations taking over and the jobs becoming more automated, it’s putting a heavy pressure on agricultural workers. If the agricultural market becomes cornered we could see the price of food skyrocket and adversely affect the rest of the economy. I believe we will see a rise in the amount of anti-trust laws being enforced as smaller business keep getting bought out by these big businesses

  3. I am not too surprise at the facts of this article. I knew rural America was taking a hit, but I never really dove into the issue. Corporations have only expanded since the turn of the century. The fact that some of these industries are controlled by only four companies max is unsettling. Clearly, the chances of monopolies being created is very high still to this day. History shows that America was once a country built on agriculture. It was not until the industrial revolution where most of the workforce switched over to industrialization. It is unfortunate to see that the remaining farmers in America are now subject to the will of these monopolistic companies.
    I do have some familiarity with one of these companies, DuPont. Some of my older families members worked for them and they spoke about the vastness of their business dealings. I never really understood how much of the agriculture industry they actually influenced. With this the number of small family-owned farms are decreasing dramatically. Not to mention the fact that Americans are using less and less of their disposable income on food. These corporations are only going to deal with what is going to make them money, and they are able to set the price. A small hog farm will never be able to compete with a partner of DuPont.
    One of the main errors of capitalism is the fact that often times the little man loses. Families’ livelihoods for generations are folding because of the hold on agriculture. Small farming towns are only getting smaller, as families move to more populated cities in the hopes of finding better schooling and corporate jobs. The art of farming seems to be dying, but it is one of the most important aspects of humanity. It is also what got America to get off the ground running with its many exports. I do hope that some anti-trust laws can be put in place to protect the small farm owners and decrease the chance of monopolies. No matter how insignificant they may seem, America’s farms remain the engine of our country.

  4. I hate to see that these farms are being taken over by monopolistic organizations. The united states was built on agriculture and once industrialization hit, it was only matter of time before the rest of the United States followed. There is only so many farmers that left that it is only a matter of time before the rest of them will be bankrupt or forced to sell their farms for whatever they can get. Small family farms are definitely decreasing and its not like people are going to want to invest their money in farms now. There are so many new ways that the world is innovating that people would much rather invest in the new technological advances of the world rather than old farms that clearly have no future. Another article on points out that twice as many farmers declared bankruptcy in 2018 than 2008 which is terrifying for any farm owners. The article mentions that 4 companies are controlling more than half- three quarters of slaughtered animals and seed sales. Two of these companies are DuPont and Monsanto. The article mentions “Just in the five years from 2007 to 2012, the number of U.S. hog farms declined by 25%”. This is a drastic number seeing as how if this continues, by recent years to come there will be no hog farms or it will be controlled by only one organization like DuPont. Another interesting point that the article states is “Agriculture is a complex and highly competitive industry, and there are hundreds of companies driving innovation and competing for farmers’ business.” This was interesting because it just goes to show that those who are advancing are going to be the ones to succeed. Standard farmers like Petersen do not stand a chance against modernized companies like the ones mentioned. They are the ones that will be able to come up with new ways to produce more food for cheaper prices and at a faster means of production. That is something regular farmers try to stray away from because they people to have the best organic foods which is the way things should be but the big name brand companies do not see it that way and so they will take every opportunity they can to be on top.

  5. Carl Shapiro, an economist from the Haas School of Business at Berkley, describes that the issue with determining the presence of monopolies is that there is no real actual measure to empirically determine the presence of market concentration across small and large companies and across all industries. Most studies to assess market concentration are using data from the Economic Census. The problem he claims is that many policy papers claiming that there has been a rise in concentration are unable to define the market with which they are referring to as becoming concentrated. In addition he describes that another issue is that there is a difference between market concentration and market competition and the question becomes whether or not an increase in market concentration will cause a decrease in market competition, pointing out that there are industries in which an increase in concentration is actually a positive sign indicating the natural course of competition at work. In general however an increase in market concentration is at least associated with an increase in productivity, which would benefit consumers.
    There has been a decline in the entry of new firms since 1977 despite corporate profits as a percentage of GDP over the last 30 years rising 50%, from 7-8% to 11-12%. The concern which Shapiro supports is that there is evidence of “incumbency profits” wherein the revenues that dominant big players partly enjoy are due to profits that are not the result of successful competition amongst players but more due to dominant companies collecting revenues comparative to rents. In addition the strength of investors’ willingness to invest in the markets signals an economy that believes that the corporate profits that exists now are more than sustainable in the future. While the financial market’s perception of high profits existing in perpetuity is a good thing for investors, the expectation that such profits can continue unabated is an indication of oligopolies. Furthermore Shapiro supports that there is evidence that mergers lead to price markups and consistently high corporate profits suggest barriers to new entry of competition.
    The DOJ and FTC have the ability to pursue tougher antitrust however it is difficult to know how such moves would be viewed by the courts. Interestingly the DOJ and FTC challenge a very small percentage of mergers. For example, only 2.6% of mergers were challenged in 2016.

  6. Despite laws and acts in place restricting the prominence of monopolies in the United States, it seems like several large corporations have the upper hand in controlling competition over smaller businesses. In the area of agriculture, one of the more intriguing points mentioned in the article is the comparison between agricultural control in Russia and how agriculture is turning out to be in the United States. Unlike in Russia, where the government mainly controls agriculture, here we have bigger corporations taking control of the collective farm system. As expected, a majority of people are against this form of control, especially those who actively own their own business in the agriculture industry. Because of this, a desire for change in the industry has greatly increased to the point where even presidential candidates for the 2020 election have strengthened their priorities towards breaking up larger corporations’ control of agriculture. Some of these candidates include Elizabeth Warren and Amy Klobuchar, who have already developed several agriculture policies to go along with their campaign efforts. These policies either involve breaking up the monopolistic corporations or bringing in more support to the infrastructure of smaller businesses with increased budgets. With the chance of agricultural monopolies growing larger and larger, more profits are taken away from the smaller businesses, which effectively reduces competition through artificial means, and can ultimately drive those businesses out of the market while simultaneously preventing new ones from having any chance at competing with larger existing companies. In fact, it’s not just small businesses that are affected, but also family farms, too. Whether the problem exists in the farming industry or in other areas involving the competition between small companies and corporate giants, it is important to mention that the existence of manipulative monopolies in the United States brings in more problems for growing businesses, restricting the competitive market.

  7. This article was both enlightening and felt weird to read. Learning about the absolutely skewed state of industries outside of the more well-known, more often discussed technological or mechanical monopolies was interesting to consider after focusing mainly on industries concerning more mainstream issues. I would never have guessed the grave situation of rural America without reading this article. Of course, learning about different domestic issues throughout my studies, I have learned about economic strife in the American Midwest, mainly concerning the severe decrease in the production/manufacturing industry and how the economy is now significantly more concentrated in services. What felt weird when reading the article was how consistently scenarios were compared through the lenses of the current day and the situations of the 1960s and 70s. The 1960s was half a century ago, and many factors can explain why Americans only spend about 6.4% of their disposable income on food now compared to the 17% of 1960. In that same vein, though, I admire Peterson’s ability to adapt to the struggles he faced and how he found a solution to combat Big Agriculture. Using the idea of raising premium hogs in order to gain profits, after filing for bankruptcy in 2001, Peterson truly works to continue living despite the shadow of Big Agriculture looming over him. I would most likely have wanted to move away, using whatever other skills I possess to earn a living, but I know that, for someone that had been raising hogs all of his life and living in his home for however long he did, it is unimaginable more difficult for Peterson to up and leave what he holds dear. Now that more media attention is being paid to the struggles of farmers and producers in the Midwest, I hope serious actions will be taken on behalf of those struggling under the monopoly of Big Ag to help facilitate their lifestyles.

  8. At initial glance of LeVine’s article, I was not all that shocked by the claims of the disruption of the agriculture industry. After all, within a capitalist society, we often witness these huge economies of scale and the farming industry is no different in these regards. One issue that the source presents is the revolution coming from cheaper food which results in a more disposable income for consumers. Less money is being spent these days on food which creates expectations for cheaper products that are mostly provided my big corporations. The topic that I found particularly interest is how the market of share of the united states is divided and how the industry is dominated by four companies. Ultimately the reduced market share can propose a huge issue for both consumers and the local farmers. With the cost of meat being dropped drastically as a result of large scale animal agriculture, companies can have influence over prices. With corporations controlling a large percentage of agricultural land it is important that the government does keep a careful eye on their practices. Overall there has been issues with land and the use of chemicals. Monsanto is one of the most notorious cases in my opinion that represents the issues that come with the domination in a corporate landscape. When the competition is not evenly spread, externalities can become way more damaging because of the large exposure to market. Also for a large majority of local communities built on farming, the power of big corporation can result in bankruptcy for smaller farms and lead to small monopolies in areas that only have access to crops and meat from one producer. Even looking at it from an ethical side the situation appears to be morally construed when you understand that these mega farms act as a factory for animals. Even though these companies are responsible for a large amount of the destruction of natural resources, the government still gives them subsidies and land because the public is provided with cheaper products. This is when society comes across a morally challenging issue: do you choose to buy local even though it’s more expensive or buy the products from big companies because they are cheaper. More times than people go with the second option. However, even faced with dilemmas like these farmers still have found way to succeed even amongst bigger disruptors. The farmer mentioned in the article managed to keep operations alive because he chose to offer a more premium cut from animals in a market where consumers are more conscious about their sources of food. In the end though, these efforts might not be sustainable for small farms and they will have to begin switching to a different career or industry. One thing is for sure in that the market will start to look very different in the upcoming years.

  9. Rural America is starting to feel the effects of Late Stage Capitalism. The conglomeration and domination of massive corporations is taking a toll on small farmers. Unfortunately, the hay day of the generational farmer is over. The lay farmer that made just enough to earn an “honest living” and enjoyed a peaceful life in the past is hard to come by today. “Big Ag”, what Steve LeVine of Axios refers to the dominant agricultural companies as, is taking over every aspect of cultivation. LeVine reveals that 3-4 companies control more than half of hogs, chickens and steer slaughtered in the US annually. Similarly, a handful command more than three quarters of corn and soy bean sales.

    A few trends in the agricultural industry has allowed this to take place. First there is the change in consumer behavior that has a had a chain reaction effect. Due to the availability of information and scientific research being conducted in agriculture, consumers are choosing what they eat on other factors outside price and preference. Western nations are witnessing a colossal shift towards organic, non-GMO and pesticide-free food. Change results in an urgency within the farming community to adapt and those that are the slowest to make the switch will be left behind. Who is most inclined to make the adjustment? Big Ag has the resources to quickly modify their techniques and the liquid assets to acquire new capital. The ordinary farming family in Iowa lacks the ability to transition in the same manner. Additionally, it is more difficult for that farmer to meet everchanging FDA regulations and to gain GMO-Free certifications.

    The other threat to small scale agriculture is the same threat to almost every industry in the United States: sophisticated AI. Big Ag is incorporating business analytics and artificial intelligence to increase efficiency. Data on temperatures, weather patterns, sunlight absorption, harvest yields etc., is being collected, stored and analyzed to give agriculture giants a more comprehensive understanding of their business. Computers can dictate what, where and when to plant, water and harvest on their own. This goes along with the use of satellite imagery and drone surveillance to deeply understand geography from a different perspective. More sophisticated machines are also being used. Farm Robotics, also known as AgBots, is projected to grow in the coming decade. Laborious tasks that were traditionally associated with low income jobs can soon be completed by a robot. In the not so distant future robots will take up the tasks of fruit picking, withered crop removal/identification and processing. This not only cuts cost, but cuts the need for employees. Just like the shift to organic, small farmers can’t keep up.

  10. In a capitalistic economy it is no surprise that monopolies and big businesses can rise and own the market. With little regulation, this can shift the economy and increase the wage gap, with an extremely small percentage of the country’s population owning a large majority of the wealth. What bothers me is the negligence of the “small man”, or the small population of individuals in smaller states. In the article, small farmers in Iowa are seeing economic declines that are threatening their way of life, as big agricultural companies are running a majority of the farms in the state. They consolidate the means of production and the livestock that those farmers use, enabling them to sell their product to food companies at a much cheaper rate. Politicians like Donald Trump have been speaking for years about protecting those smaller farmer populations, campaigning in smaller rural states to capture those votes and convince those citizens that someone actually cares about them despite the fact that politicians like Trump have no actual agenda in that circumstance. The less the government interferes in splitting up monopolies and the power of big businesses in this country, the more populations like the farmers in Iowa will begin to fall economically, losing their homes and causing extreme emotional damage. The issue I have is that I do not believe there is a concrete solution to this problem, as technology will advance in the future, putting more and more people like those small farmers out of business. The only way to provide for those farmers in the present day is to enact laws that break up big agricultural companies, and spread out the means of production and livestock over a variety of farms across the country. I also believe that agriculture is the one industry that will not be evaporated as the result of a changing economy. Society will always need food, and despite the artificial practices many food companies take in making their product, there will always be a need to grow food. As such, we should subject these farmers to the new technological advances that happen in the industry, and help them grow their business as the industry grows, providing the tech to their farms without charging them for it.

  11. Years ago, small business where all everyone had because they were simple, easy, and local to people in surrounding towns. Over the years, small business kept decreasing because of the big business monopolies that were taking their places. Those who own the small business are going bankrupt and can no longer support their family. All of these monopolies in each section of business control at least 50% of the market sales. This makes it harder for people to start up businesses even if they wanted to. This article makes me think about business like amazon controlling all of the e-commerce online. Since Amazon sells everything, it would be nearly impossible to start an e-commerce business anything close to what amazon is right now.
    No one realizes that these big companies are taking over so quickly that it is very hard for these small businesses to get good footing when it comes to their start up. Family own food businesses are hard to keep going unless they have been in business for years and they have regulars come almost every day. By my house, there is this building that cannot keep one business going for as long as I can remember. It would be a different restaurant evert time I passed it. The reason being is because there was a McDonalds and a Wendy’s about five minutes away from it. At the rate we are going, small businesses will no longer exist because these monopolies will take over absolutely everything. People use these small businesses to support their family for generations to come and use that for stability. I hope that more people will realize that monopolies are getting to large and will want to give back to small businesses.

  12. Years ago, the world was full of small businesses that focused on certain areas. However, the times of today have changed that idea of small businesses being a big thing. Instead, large corporations and monopolies have taken over many parts of the United States economy including the agriculture industry. These big businesses are taking all of the customers from smaller businesses like farmers for example, and what does this force many of these farmers to do? Unfortunately, they declare for bankruptcy and close up shop because they are not making enough money to put food on the table for their families. Honestly, if I were a farmer who was forced to declare bankruptcy, it would suck mainly because I would have invested so much of my time into what I have done of trying to be successful and I would feel as if all of it went to waste. Monopolies have taken over everything. As mentioned in the article, four companies have control over two-thirds of the United States hog market, 85% of the steer and half of the chickens that are slaughtered throughout the country. Yeah, this does seem shocking but eventually as time goes on, these percentages will continue to go up. These bigger companies have the ability to leverage each situation with any company that comes up because of the amount of power that they have. Small businesses in all likelihood have no chance or should not even bother to try to do something. I mean, they can try but they will probably not be successful. The amount of bankruptcies for small businesses like farms will only seem to go up. Bigger companies have been able to impose their will due to the leverage that they have as previously mentioned before in this comment. I feel glad for the fact that Chris Petersen was able to stay alive in terms of keeping his farm up and running, even though he had declared for bankruptcy back in 2001. He is much more fortunate than other farmers and small businesses who end up closing down after being open for a short period of time. Who knows? Small businesses one day may cease to exist.

  13. One of the primary reasons I decided to comment on this article is because it aligns well with what I am studying both in economics and in law. The concept of a monopoly, or a company that owns 50% or more of a given market, is one that holds prominence in this article – namely the adverse effect that it has on smaller companies and individuals’ performance in the economy. Typically, I am a believer that individuals need to take control of their own lives and adapt to how the economy is continually developing; however, the instance of these farms in Iowa is different. Individuals do not have the capability of advancing themselves because few corporations, though not monopolies on their own, possess an immense amount of the market. Its simple economics – the more market share a company or set of companies possess, the more influence they have over the market price of a given good. Because these quasi-monopolies have so much of the market and can produce at such larger scales, they can willingly drive smaller competitors out of business by simply manipulating the market and driving price down. To me, this is unjust and something that should not be allowed to occur under the Department of Justice and the Federal Trade Commission.

    To delve more specifically into the extent of such issues, I would like to discuss the statistics that the article brings up. According to the Department of Agriculture, only four companies controlled 66% of U.S. hogs slaughtered in 2015, 85% of the steer, 50% of the chickens, 85% of US corn seed sales, and 75% of soy bean seed sales. This information points to one clear conclusion – agriculture, as a means of employment for lower scale companies and individuals, can no longer be pursued in the United States with confidence. Not only that, but also some economists blame this consolidation of the agriculture market in the hands of few as the reason why, as a country, productivity has been weak and wage growth has been flat. I understand the world is changing – who’s not to say that this decline in smaller farmers has not been caused by a reduction from 17 to 6.4 percent in disposable income spent on food from 1960 until now. While that most definitely plays a role in this whole scenario, it still does not change the fact that individuals may, from the get-go, not be able to prosper in the field of agriculture due to the concentration and control of that industry in the hands of a few powerhouses.

  14. Big companies are outrunning many mom and pop type businesses across the globe. There is nothing to blame other than they world evolving. It is like Charles Darwin’s theory of natural selection, the weak ultimately get killed and the strong continue to thrive and prosper. The business world today is eat or be eaten and that is what this article discusses. The number of small farms being outrun by big corporations is in the thousands and there isn’t much these farm owners can do. When these companies start farms or hire the largest farmers in the market, prices must drop due to the amount of product they are buying in bulk. This is perfect for the large farms who are selling everything but for these smaller farms that have minimal contracts and are extremely small compared to the others, they can not afford to lower their prices causing them to lose business and ultimately lose profit which in turn will force them to go bankrupt. This type of Darwinism does not only happen with farmers, it is affecting a wide array of industries from retailers, to super markets, and even to mechanics. It seems unfair but it is how the world is progressing, we are an immensely industrial economy and when companies grow larger by the day like we have seen with Disney, Apple, and Amazon, they are forced to find the cheapest and most cost effective outsourcing which tends to leave smaller businesses in the dust.

  15. Agriculture is a giant industry and provides countless jobs. But with the growing intrusion of big agriculture, these jobs are being taken away. Agriculture has moved away from its roots of small farms and is now ruled by monopolies. As stated in the article, four companies control 66% of U.S. hogs slaughtered, 85% of the steer, 50% of the chicken, 85% of corn seeds sales and 75% of soybean sales. The gross displacement of market power is ruining farmers like Petersen’s livelihood.
    An example of gross market power displacement like this was the tobacco industry. In 1911, the Supreme Court found the American Tobacco Company guilty of attempting to monopolize under the Sherman Antitrust Act of 1890. The Company was dissolved into three major parts: American Tobacco, Liggett and Myers, and P. Lorillard (Carter). They found guilty again in 1946 and forced to pay fines and restructure their companies (Hunt). This shows that the Supreme Court is capable of doing the same thing with the Agriculture Industry. It might be more difficult since supplying food is much more important than supplying tobacco but it is still very possible and worth doing.

    Carter, Robert W. “American Tobacco Company.” NCpedia, University of North Carolina Press, 2006,

    Hunt, James L. “United States v. American Tobacco Company.” NCpedia, University of North Carolina Press, 2006,

  16. Corporations are taking over small farms and ultimately forcing them out of business. However, the article mentions how American consumers are somewhat to blame for their need for the cheapest food. In my experience of working at a small farmstand I understand the consumers point of view and farmers point of view on pricing. Some customers understood that quality mattered more than quantity whereas the other half vice versa.
    At the farmstand, everything was grown right on the farm and picked all by hand. Workers needed to be paid hourly and picking by hand took quite a lot of time in the morning. Berries were a high seller and with the amount of hours it takes to pick a quart or pint size box, the price usually was a little more expensive than your average grocery store. In many cases I heard customers discuss going to whole foods or Trader Joes for produce due to lower pricing. However, you end up giving up local farm fresh produce for other produce which may say local but could be two hours away or more. Big corporations are able to either pay multiple people or use machinery to help cut back on the number of workers needed. In many cases, big corporations just need a tractor driver until self-driving tractors become a thing. Small farms are doing their best to generate revenue to find alternative ways to help cut the cost of their own crop. Agriculture is a competitive industry and having the lowest prices and the best technology are the only way to survive.

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