In Meat We Trust (23 page)

And so the new model of livestock production—confined, large-scale, automated—thrived and spread. In the early 1960s, feedlots of fewer than one thousand head put out 61 percent of grain-fed cattle. A decade later, only 35 percent of fed cattle came from such small lots. During the sixties alone, the number of feedlots dropped from 164,000 to fewer than 120,000, and about 400 giant lots put out half of the nation’s fed cattle. The number of livestock producers dropped, too. In 1950, 2.1 million American farmers sent hogs to market, the majority of them raising fewer than a hundred head of hogs a year. Twenty years later, the nation’s hog farms numbered fewer than a half-million. The geography changed as well. In the early 1970s, a team of University of Missouri researchers found that of the 141 largest hog operations, 95 lay outside the Corn Belt.

The new model of cattle and hog production satisfied the inextricably linked goals of making cheap food and creating factorylike, integrated agriculture, the one the demand of millions of urban Americans, the other the embodiment of the early-twentieth-century vision of farmer-as-businessman. Over the next twenty years, that model would become firmly entrenched thanks to upheaval in the meatpacking industry and economic turmoil that permanently altered the face of American agriculture.

6

The Vacuum at the Top

I
N THE
1960s, a small group of meatpacker revolutionaries reinvented the industry. They moved slaughterhouses out of cities and into rural areas, built plants designed to eliminate the need for skilled labor, and introduced a new product called “boxed beef.” The revolution forced other packers, whether regional small fry or national giants like Swift and Armour, to make a choice: adjust and adapt—or go out of business. Few achieved the former, and so most suffered the latter.

Ken Monfort guided the revolution’s battering ram. In the late 1950s, he realized that his company’s future was, as he put it, “at the mercy”
of the ten meatpackers then operating in the Denver area. Three of the ten were owned by a national grocery chain that fed its own cattle and rarely bought any from the Monforts. Of the remaining seven, four were owned by national packers and three were local independents. None of them, Ken complained, were interested in buying the quality cattle that the Monforts produced. If father and son wanted to expand their feedlot operation—and they did—they needed to find additional buyers. But that would mean shipping their cattle longer distances and paying yardage fees and commissions to distant stockyards. The better alternative, Ken decided, was to persuade one of the giant packers to build a plant in Weld County. He tried but failed. “Most of the big packers
would go as far as Denver,” Ken said later, “but just wouldn’t consider a plant in Greeley.”

So he turned to Plan B. We should build and operate our own meatpacking plant, he told his father. Warren Monfort was aghast. Even by his aggressive standards the idea was flawed, not least because neither of them knew anything about operating a slaughterhouse. The one thing Warren did know about meatpacking was that it was a crazy way to earn a living: the Monforts typically earned three to four times as much as companies like Swift and Armour, which were lucky to reap a 1 percent profit. What made Ken think he could do a better job? And, too, like most cattle feeders, Warren Monfort disliked and mistrusted packers on principle, and the idea of becoming the enemy did not sit well with him. But Ken was convinced that the future lay in integrated operations of the type that characterized the broiler industry, and he would not be deterred. As a compromise, Ken offered to minimize the risk by bringing in other investors. He tried to persuade local cattle feeders, and by that time there were plenty of them in Weld County, to invest in the project, but they were scared off by what he described as the “legal hassles”
the project necessitated. Eventually he persuaded the Averch brothers, who owned Capitol Packing Co. in Denver, to enter into a joint venture: the Monforts would build the plant; the brothers and their employees would manage it.

The slaughterhouse that opened
next to the Monfort feedlots in the spring of 1960 bore little resemblance to a conventional packing plant. It flowed horizontally rather than vertically, and most of the killing and cutting operations took place on the ground level. Natural light spilled onto the kill floor, thanks to an expanse of green glass on the building’s north face. Instead of hanging carcasses on hooks, Monfort installed an automated, ceiling-suspended rail-conveyor system that carried carcasses from one butcher station to another. Workers stood on adjustable platforms that allowed them to move up, down, and around a carcass with a minimum of bending or stooping. No one humped carcasses from one location to another, a traditional practice that made men old before their time and bruised and damaged the meat. Another conveyor carried wastes to rendering operations located in the basement. The hides landed there, too, deposited into two circulating, automated brine tanks that cured the skins in just six hours.

Two factors drove the design. First, the layout and automated equipment eliminated the need for skilled labor, a must because Ken insisted on hiring local residents. “When we opened
our plant,” he said later, “we were advised to advertise for butchers in Omaha, Kansas City and other cities, but we refused to do it.” He wanted his employees “to be from Greeley, not only to help local people but to get men who would stay with us.” Weld County farmers had long relied on seasonal labor, much of it Mexican American. From Kenny’s perspective, the local economy would benefit if those men (and, as was typical of that time, he hired only men) enjoyed full-time work and steady wages. Thus the plant’s design: rather than have skilled union butchers carve an entire carcass, each man would make only one or two simple cuts, tasks that could be learned quickly even by novices. In 1962, the union came calling, and Kenny supported his employees when they voted to join the Amalgamated Meat Cutters and Butcher Workmen of America. In true maverick fashion, however, he persuaded them to eschew the master contract that governed other unionized packing plants in favor of an agreement that included cost-of-living increases as well as a profit-sharing plan designed to fund the employees’ retirements. It’s unlikely anyone complained: the Monforts paid the highest wages in Greeley.

The second factor
that shaped the plant’s design was byproducts or, more accurately, the lack of them. As we saw earlier, dressed-beef pioneers like Armour and Swift learned early on that byproducts paid the bills, whether as bone and hide, or margarine and medicines. They had designed slaughterhouses that accommodated the rendering and processing operations necessary to extract profit from hoof, bone, hide, and other animal parts. But in the 1940s and 1950s, demand for those products dwindled and their profits evaporated. Synthetic body soaps and detergents replaced ones made from animal fats. Lard was an antique curiosity in the age of calorie counting and convenience foods. The value of hides, long one of a meatpacker’s best friends, plunged as manufacturers of shoes, purses, and furniture substituted fabrics and plastics for leather. In the early 1940s, 78 percent of shoe soles were leather; by the early 1950s, more than half were fabricated from synthetics like Neolite. New drugs and commercial fertilizers eliminated the need for hog thyroids and dried blood. Ken Monfort recognized that without those byproducts, he faced a hard climb toward profitability. One way to compensate for them was by eliminating every possible inefficiency and expense, from the number of steps workers took during the day to the number of light bulbs needed to illuminate the interior of the plant.

Monfort struggled to master the intricacies of the new venture, which in those early days, he admitted, “was something less
than a howling success,” thanks to recalcitrant machinery and his own inexperience; so unsuccessful, in fact, that within six months, the Monforts’ partners wanted out. Despite his woes, he refused to expand into value-added, processed meat products—canned beef stew and TV dinners—to which other packers had turned as replacements for byproducts. Slaughtering cattle and making beef was one thing; figuring out how to sell branded, packaged foods to grocery chains was another business entirely, and not one he was prepared to tackle, at least not while he was still learning how to slaughter and pack. Indeed, he was so wary of the grocery business that he focused entirely on the HRI market. Still, if he wanted to survive, he had to add additional value to his beef. Like his father before him, Ken Monfort found an opening that he could exploit: his customers’ dissatisfaction with unions and with carcass beef. In early 1962, he announced plans to build a second plant where employees would “break,” in industry jargon, whole and half carcasses into “primal” cuts and box them for shipping.

Thus began the boxed-beef revolution (which another meatpacker, IBP, is credited, wrongly, with launching), a pivotal moment in the American meat industry, and one we can best understand by looking at the problems that inspired first Monfort and then other packers to offer this service. Consider the path that fresh beef traveled from a meatpacker to, say, a chain grocery store. Packers shipped whole or half “swinging carcasses” by truck or train to a grocery warehouse. There, in-house butchers broke the carcasses into primal cuts such as flank or loin and boxed them for delivery to individual grocery stores. At the store, meat department butchers cut the primals to order for shoppers or broke them into individual steaks or roasts that were wrapped and packaged for sale in self-service cases. Every step drove up the final retail price,
a fact confirmed by a 1966 study commissioned by the grocery industry. On average, workers handled a beef carcass nineteen times before shoppers dropped the meat in their carts to take home: five times at the packinghouse, eight times by various middlemen, and another six once it arrived at a grocery store warehouse. Worse, the prolonged shipping and handling contributed to “shrinkage”: in the first forty-eight hours after leaving the packing plant, a carcass lost 2 percent of its bulk and during the nine days needed to move beef from slaughterhouse to grocery store, lost more than 5 percent of its weight, or thirty-three pounds in a typical six-hundred-pound carcass. Union wages and work rules added another layer of expense, in part because butchers resisted innovations that would eliminate their jobs. In Chicago,
union butchers employed at grocery stores stopped work at six p.m., and no fresh meat could be sold until they returned the next morning. No wonder, then, that beef returned minuscule profits but gobbled about 60 percent of a typical meat department’s labor costs. Add in the equipment—slicers, power-driven saws, oversize refrigerators—and it’s not surprising that many grocery meat departments operated at a deficit. The situation was no better for the HRI industry, where buyers faced the same layers of middlemen and expense.

Grocers begged meatpackers to help eliminate not just those lost profits, but the odor and mess that in-store butchering spawned (and to which customers objected) by making more cuts to carcasses before those left the packing plant. One analyst urged packers to stop thinking of carcasses as commodities and see them as a “vehicle for selling services.”
Only then, he argued, would they “reap the . . . true profit which the market offers.” Many established packing companies had a hard time grasping this idea, and their longtime relationships with unions made it difficult to institute new work practices. But newcomer Ken Monfort was wedded to neither meatpacking’s past nor its entrenched unions. In his mind, it made sense to add value to his beef at the plant; thus the new breaking operation. By shipping only edible beef, and by shipping it in vacuum-sealed bags packed in stackable boxes, the Monforts chopped $3 to $4 off their transportation costs, eliminated the bruising that lowered the value of a swinging carcass, and, most important, extracted maximum profit from their beef.

By the late sixties, the Monfort processing operation looked like something off the set of a science fiction film. The action revolved around a giant electronic control board—the heart of the facility’s “automated electronic beef
handling system.” With a push of a button, the dispatcher directed a carcass—whose weight and meat ratio met the buyer’s specifications—to, say, rail fifteen, where it hung awaiting the rest of the buyer’s order. When all the items had arrived, a click of a switch sent them rolling along a track to the loading area or to a conveyor that carried them to the breaking room where crews reduced them to the primal cuts that the customer had requested. Employees packaged the pieces in boxes dosed with carbon dioxide to keep the beef chilled, or bundled them in vacuum-sealed plastic film before boxing them for shipping. The investment in electronics, automation, and fabrication was a necessity, said Ken Monfort, because “the only way
to stay alive in this business is to continually improve your efficiency.” He had transformed the family business into a mechanized, automated, integrated beef factory, the feedlots a model of Fordized production, the packing plants a futuristic wonderland that bore no resemblance to the aging hulks that dominated Chicago’s old Packingtown.

In the 1960s, the Monforts’ main rival was another maverick packer. A year after Ken flipped the switch at his packing plant, Andrew D. “Andy” Anderson did the same at Iowa Beef Packers, Inc., known to all as IBP. (The company’s formal name changed several times but was always referred to by its initials, which became its official name in the early 1980s.) Like Ken Monfort, Andy Anderson was a commanding figure: six feet four inches tall and typically dressed in jeans and an
“LBJ hat”—a good ol’ Texas cowboy hat—that enhanced an already uncanny resemblance to President Lyndon Johnson. He was also smart, talented, and ambitious. “Andy’s a genius,”
said one of his colleagues. “He has an idea every 15 seconds, some realistic and some unrealistic.” Two urges fueled those ideas: profit, of course, but also a passion for transforming ideas into tangible ventures. Indeed, Anderson is best described as a serial entrepreneur: as soon as he launched one venture, he was itching to tackle another. In his case, success inevitably bred success, and he never lacked for investors. His association with meatpacking dated back to the 1930s, when he worked at a West Coast slaughterhouse. In the early 1950s, he and two partners opened a packing plant in Boise, Idaho, which they sold eighteen months later. Anderson stayed to manage the plant, but when the new owners sold it to Swift in the mid-fifties, Anderson left Idaho for his home state of Iowa and Denison, a small town in the western part of the state. There IBP was born.