Be careful who you listen to, because this could become a very serious issue.
I’m sure you’ve heard about the meat shortages that are coming our way. The media tells us not to worry, that we are only experiencing a minor hiccup and that everything will be back to normal soon. Others are telling us that the truth is much more dire, that the shortages are real and will affect us in a big way, and that these affects will impact us for many months or even years.
What’s the truth? How bad will it actually get? Should we worry? What should we do?
Here’s my perspective…
IS THIS A REAL PROBLEM?
Yes, this is a real problem, and it has the potential to be very significant. I recommend that you be careful who you list to on this issue, because most people don’t understand the underlying issues.
HOW BIG IS THE PROBLEM?
Right now, one million pigs per week are being euthanized and buried instead of being delivered to grocery stores that are running low on meat. JBS’s pork plant in Worthington, Minnesota has reopened, but not to process pigs for sale, but to euthanize pigs from local hog farms. The Minnesota Pork Producers Association told the Star-Tribune that 60,000 to 80,000 hogs will be put down this week in Minnesota alone. Some farms are even using chippers to grind up carcasses to be spread out for compost.
Allen Harim, a poultry processor in Delaware, has announced it will euthanize 2 million chickens.
According to the New York Times, “In Wisconsin and Ohio, farmers are dumping thousands of gallons of fresh milk into lagoons and manure pits. An Idaho farmer has dug huge ditches to bury 1 million pounds of onions. And in South Florida, a region that supplies much of the eastern half of the United States with produce, tractors are crisscrossing bean and cabbage fields, plowing perfectly ripe vegetables back into the soil. The nation’s largest dairy cooperative, Dairy Farmers of America, estimates that farmers are dumping as many as 3.7 million gallons of milk each day. A single chicken processor is smashing 750,000 unhatched eggs every week.”
WHAT IS THE ROOT OF THE PROBLEM?
There are two issues that make this a very serious concern. First, government intervention into the free market system, and second, the very real risk of the US Dollar’s collapse due to the Fed’s unlimited money creation.
First let’s discuss how government intervention is seriously damaging our food supply…
Our food supply is being shut down by people in government who have no understanding of how an economy works, nor do they know how fragile the meat supply chain is.
A real food shortage problem seems impossible in the USA because we have a tremendous farm industry. But the root problem is not in the farm industry, nor is it due to low numbers of animals. Rather it started decades ago with onerous regulations that required farmers to take their animals to only a handful of USDA certified meat processors. Indeed, 80% of meat in the USA is processed by only 4 meat processors, and this regulation-imposed bottleneck made our supply system very weak, and this weakness is one of (but not the only) factors that is causing massive problems now.
“In 1967, the federal government blocked states from making their own decisions on how meat was processed and promptly handed the power to the Department of Agriculture, or USDA. What followed was essentially a takeover of control of the industry. Farmers had to travel long distances and sell their livestock to a small number of USDA slaughterhouses instead of to local butchers, small processors, or directly to consumers. This relationship began to severely impact their profit margins as the government was able to force farmers to sell their product for pennies on the dollar. When you limit the number of places the producers can sell, you control the prices…
Farmers are buried in debt as they must finance expensive equipment to do their jobs, yet also must pay all of the costs of raising the animals upfront. And they increasingly see their returns diminish at the end of the equation.” (source)
FARMERS ARE BETWEEN A ROCK AND A HARD PLACE.
Since farmers are only allowed to sell their animals to a few USDA slaughterhouses with very strict requirements, farmers need to precisely plan the lives of their animals…
“If you hold them, they gain weight and you have to feed them, and that’s expensive,” Mary Hendrickson, a rural sociologist at the University of Missouri, told Recode. “And if they gain too much weight, then they’re going to be too big to be processed in these very standardized meat plants, like Smithfield. So you might try to hold them up” and keep the animals waiting in a feedlot, Hendrickson added. “Or you’re going to kill them, euthanize them.
“These facts ultimately add up to an unnerving amount of uncertainty for farmers, who don’t know if the animals they’ve been raising for months or years will make it to the slaughterhouse or get dumped in a ditch. (source)
According to Thomas Massie, “The shocking thing is that farmers are watching the value of their hogs and steers, cows, go down. In fact, they’re going to some of the lowest levels ever,” he said. “So the question is: Why is the price of meat going up in the supermarkets and the price of cattle going down at the auction ring? It’s because our supply line is brittle. You have to take cattle, steer, beef, whatever, hogs, to a processing plant. And these processing plants, like much of industrial America right now, are shutting down because of absentees, which has been exacerbated by the unemployment program the federal government has instituted — plus the $1,200 checks that are about to hit, plus some of the regulations that the states have put in place.”
WE TAKE IT FOR GRANTED!
We are the wealthiest country in the world because of our free market economy, but the free market is under attack like never before in our history. We have people running our government who have no clue about how the economy works and how their food gets to the table.
An economy is a finely tuned, very efficient machine and all aspects of the economy are interdependent upon one another. Each product that you purchase, whether a meal at a restaurant, a pencil or an appliance, requires the services of hundreds of companies. This intricate web of interactions happens spontaneously and organically, without direction by a central authority telling them what to do and what services to supply.
It is a fallacy to say that there are essential businesses and non-essential businesses. Shut down a simple cardboard box manufacturer and you could shut down hundreds of other businesses.
The food supply industry is the same way. It works best and most efficiently when the government doesn’t interfere (other than to keep businesses honest). Although America is over regulated, until now it has been the least regulated and most business friendly, which is why we have been the most prosperous country.
FREE MARKETS ARE UNDER ATTACK LIKE NEVER BEFORE.
If you step back from the COVID-19 hysteria for a minute and look at how the world has changed in recent months, you will notice that the government response to this crisis has resulted in the single largest assault on free markets ever. Businesses have been devastated because of government intervention. The complex web of economic interactions has been severely harmed, and many businesses have failed and will never come back.
The economy thrives when entrepreneurs risk their own money and time to create solutions, but they will only do this if they feel there is a good chance for a profit, otherwise they wouldn’t take the risk. They get very scared when governments demonstrate their willingness to shut businesses down, which is the most radical form of government intervention. Businesspersons simply won’t risk their money in this situation.
So, the situation right now is that…
- The meat industry was already weak because it’s an over regulated industry that greatly limited the meat processors farmers could use.
- Then the government shut down the meat processors without properly understanding the risks to the food supply chain.
- Now, the government is interfering by providing unemployment checks to workers which encourage workers to stay at home instead of going to work (which indeed is a big problem for many businesses across all sectors).
What will come next is…
- The food prices will go up dramatically because of shrinking supply and increasing risks to farmers and other businesses in the supply chain.
- The price increases will be a direct result of government intervention, but the government will react by imposing price controls, while claiming price gouging.
- As a result of the price controls, the risk reward formula for entrepreneurs will fail, and even more businesses and farmers, butchers, small meat processors and grocery stores will go out of business.
Free markets create an abundance of food at the best possible prices, while government interference creates scarcity and higher prices, which will be blamed on capitalism.
SO HOW BAD WILL THE MEAT SHORTAGE ACTUALLY GET?
The magnitude of the food supply problem will be directly proportional to the level of government interference into the free market system.
The meat shortage could become a very serious thing. Currently, the meat supply seems fine because there was excess food in the distribution system because restaurants shut down and this commercial meat was repackaged for consumers, but that will be gone soon. The real shortage will start to show up soon, and I think people will be shocked at how bad it will be.
The people who are predicting just a hiccup in the food supply system don’t understand how the economy works, nor do politicians.
The magnitude of the food supply problem will be directly proportional to the level of government interference into the free market system. If the government wakes up and gets out of the way, it could be just a bump in the road. But do you believe that the government will get out of the way, especially since they are high on their newfound power and ability to ignore the Constitution?
I think it’s clear that politicians believe that it is their job to interfere whenever there is a problem, so they will interfere, which ALWAYS makes the problem worse. If it does continue to interfere with the free market, the food supply problem could become very serious.
BUT THERE IS ANOTHER CRUCIAL FACTOR…
There is another factor that needs to be discussed; the collapse of the dollar. As I stated in a previous article, I believe that even before the COVID crisis, the US Dollar was doomed. The Federal Reserve has printed so much excess currency over the past few decades that the collapse is inevitable. And now the current crisis has hastened its demise. What will be the result? Rapidly increasing prices.
These rapidly increasing prices will create a run on food, because people will be scared that they won’t be able to afford food in the future, so they will want to stock up. The toilet paper run will be nothing compared to the run on food.
WHAT CAN YOU DO?
If you don’t have one already, get a freezer (which is almost impossible to find right now) and stock it with high-quality meat and other food. Keep it well stocked.
Standard “emergency preparedness food” has marginal quality and appeal because you typically don’t know when an emergency is going to hit, which means that it needs to have a very long shelf live.
In our current situation, however, we can clearly see the threat coming. For this reason, I think a very good solution is a high-quality meal replacement shake. These shakes are specifically made to be nutritionally rich, but they are typically not considered for emergencies because they only have a shelf life of 18 to 24 months.
These meal replacement shakes can provide a high level of nutrition. You will still want fresh food, of course, but if fresh food is in short supply they can be used as a good meal replacement or as a supplement to make your food supply last longer.
There are many different options on the market, and I think it’s a good idea to have a variety of high-quality meal replacement shakes on hand (the type you get from health food stores).
I’m a fan of NutraOne’s Real Meal Shake because it’s low in sugar, gluten-free and contain grass-fed protein and healthy fats. (If you are interested in this shake, I have negotiated a wholesale price with them for my premium subscribers. Learn more here.)
I suggest that you get a good supply of meal replacement shakes on hand.
This is the time to start your own garden and get some chickens. If you didn’t attend Marjory Wildcraft’s Homegrown Food Summit this past week, I suggest you check out the replay options here. It’s a tremendous resource.
One of the best solutions for our country is the PRIME Act, which is a Bill that was introduced by Thomas Massie. This Bill would go a LONG way to fix our country’s broken meat processing system. We need to get rid of the gridlock of the top four meat producers and empower the farmers to go to local butchers and small meat processors. Please spread the word about this!
I know it sounds ridiculous to talk about serious food shortages in the USA, but I think it could, in fact, be a serious crisis.
The magnitude of the problem is directly connected to two things. First, the level of government interference in the free market system. Government has created a full-on assault on the free market system, which is our source of abundance. This intervention is laying waste to farmers and entrepreneurs and is seriously impacting the supply chain.
Even more serious, however, is the possible collapse of the US Dollar, which has the potential to be incredibly serious and will devastate the lives of Americans.
I think it’s important to take this seriously and stock up as much as you can. Be careful who you listen to on this subject. There is a lot of propaganda going on right now, and most writers do not understand the economy, free markets, or how brittle our supply chain is right now.
Do what you can to tell your loved ones about this coming problem and encourage them to be prepared.
Take care of yourself and your family now.
Please comment below.