Farmers, welcome to Wally World

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The National Cattlemen’s Beef Association may not want country-of-origin labeling. The government may not want country-of-origin labeling.

But if Wal-Mart wants country-of-origin labeling, we’ll get country-of-origin labeling.

When I hear two ag economists at two farm meetings within the span of two weeks both talk about the rising influence of food retailers like Wal-Mart, I listen.

Wal-Mart wants country-of-origin labeling? It’ll happen.

Wal-Mart wants on-farm animal welfare standards? It’ll happen.

And agriculture will never be the same.

Kicking in. Earlier this year, Wal-Mart announced it will comply with country-of-origin labeling regs for fruits and vegetables – even before the government regs kick in.

The retail giant is also reaching into the dairy industry to check quality standards of its milk suppliers.

It’s making noise about creating animal welfare standards for farmers who ship milk that ultimately ends up on Wal-Mart shelves.

Nothing new. Worries about integration and concentration in the food processing and meat packing industries are nothing new.

Worries about integration among food processors and retailers are new.

Traceability demands will trickle down to farmers. Animal welfare demands will trickle down to farms.

Pressure to do both and raise your commodity even cheaper will definitely trickle down to farms.

Smaller links. The links in the food supply chain are now smaller. Food retailers are calling the shots.

If you ask retailers, it’s all done in the name of the consumer. After all, “everyday low prices” are a good thing, right?

Who can cry for anti-trust action when the consumer is benefiting? And the consumer is benefiting. For now.

Pressure is on. The price pressure will eliminate food retailers and manufacturers one by one, until few remain. Then what happens?

There are fewer buyers of farm commodities and fewer sellers of retail consumer goods.

It won’t be the consumer calling the shots, that’s for sure.

The only thing that whittles away at size and monopoly is competition.

As the industry – the entire food system – changes, we must keep an eye on that fact. Welcome to Wally World.

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