Edward Lotterman
The movie “Network” is 50 years old, but the iconic sentiment, “I’m mad as hell and I’m not going to take it anymore” is common. Households and sole-proprietor businesses like farmers see price-fixing and similar collusion all around them. They are “mad as hell,” but it is up to Congress if they will “have to take it.”
Despite President Donald Trump’s assertions that grocery prices are down, the last consumer price index showed that “food eaten at home is up 1.6%” since he took office and 5.5% over a year earlier. Turkey is up 25% over the last year. “Meat, fish and poultry” is up 5.2% from a year ago, with 2.2% of that between Inauguration Day and September.
Ground beef, a mainstay for many, was up 11.5% over 12 months and 14% since January. No, that’s not a mistake. The price fell from September to January but then bounced back up. Thus many consumers are mad as hell.
So farmers also are angry. Despite Trump saying the Chinese had promised to buy 12 million tons of soybeans this year, none have moved. Yet prices of inputs for 2026, especially fertilizer, are high relative to prospective crop prices.
Beef is one bright sector. Slaughter cattle prices are near record highs. Breeding herds are recovering after shrinking numbers during a decade of drought. But operations fattening cattle say that the gap between what they receive from packing plants and what consumers pay is widening further.
Members of Congress from farm states listen to their constituents. There are hearings on why fertilizer prices are so high. Others question why meat packers, both for beef and pork, seem to have growing market power allowing them to grab a larger share of profits. Members of key committees are speaking out and introducing legislation to fix problems.
Sen. Charles Grassley, R-Iowa, is a key one speaking up on both issues. With a farm background, he has represented Iowa in Congress for a half-century following 16 years in the Iowa Legislature. Thus, when he challenges monopolistic abuses that raise farm input costs and lower farm product prices, he speaks from some authority. But in his condemnations, he misses a key variable – what Congress has done in the decades Grassley himself has been in Washington. That is nearly nothing.
Grassley’s degrees, a B.A., M.A. and most of a Ph.D., all are in political science. So he probably never learned a key incident in Spanish history that fits him and his congressional colleagues to a tee.
Islamic Moors occupied Spain for centuries, but were driven out in the 1400s. In 1492, they gave up their last holdout, the city of Granada and its stunningly beautiful Alhambra palace. As the surrendering Moorish king rode away, he looked back and shed a tear at what was lost. His harsh mother was pitiless: “You do well to weep like a woman for what you would not defend like a man!”
That is precisely what Congress needs to hear now. Why stage great street theater about monopolies raising meat and fertilizer prices in 2025 when successive Congresses and presidents did nothing to stop their growth since the early 1980s? In 1980, the biggest four beef packers had 38% of the total market. By 2020, it was 82%. Yet history shows it is easier to prevent monopolies from being created than to break them up after they become entrenched.
Moreover, while both parties have blame, in recent decades the GOP has been far more cozy with monopoly power than the Democrats. This is a shame, given that antitrust was a central issue for the Republican Party before World War I. Teddy Roosevelt was the greatest “trust buster” of all time. After Abraham Lincoln, Teddy was the greatest GOP president ever. He dared to call out “malefactors of great wealth,” something no one in either party will do today.
To better understand all this, review some basic microeconomics.
“Perfect competition” has many small producers, none of whom have any power to set prices. Every seller is a price taker in a market with many buyers.
Monopoly is the opposite. There is only one producer who, facing no competition, sets prices wherever they want. They choose a quantity and price giving the greatest profit. That is visible to disadvantaged buyers right now, whether purchasing beef roasts or ammonium nitrate fertilizer.
Abusively high prices are not the only problem. The quantity of output produced is smaller than what is optimal for society as a whole. Resources are used inefficiently. Greater quantities of resources are used up to produce one unit of product than would be in a competitive market. Finally, monopolies foster less innovation. Without the stimulus of having to compete with other producers, there is little reason to look for ways to do things better.
Understand there are few real-world examples of perfect competition and few of pure monopoly. At the first end, there is “monopolistic competition” in which some but not all of the conditions for pure competition exist. At the other, there is oligopoly. Just as “oligarchy” is rule by a few people instead of one person in a monarchy, so oligopoly is a market with only a few producers who compete little.
Most large sectors – airliners, steel, automobiles, motor fuels, locomotives, chemicals – are oligopolies. So are meats and several other food categories. So are fertilizer, seeds and farm chemicals.
When there are only a few producers, the danger for society is that these combine, agreeing to conduct their business as if they jointly are a monopoly. Such collusion is what angry senators are investigating right now. It is what Teddy Roosevelt fought 120 years ago. It was the heart of the 1903 Northern Securities Co. decision from the Supreme Court that broke up a three-railroad “trust” put together by St. Paul’s own James J. Hill.
Curbing monopoly power long was important to Republicans. Richard Nixon saw it was time to break up the regulated monopolies in telecommunications. His Democratic successor, Jimmy Carter, did the same for airlines, railroads and trucking, reforms that were finished by Republican Ronald Reagan.
But that changed with the new century. Democrat Bill Clinton’s Justice Department saw anti-competitive practices by Microsoft. It filed suit to break Microsoft into two companies – one for operating systems and another for applications, just as Standard Oil and International Harvester had been broken up a century earlier. In 2000, the government was clearly winning the case in court, but as soon as George W. Bush was inaugurated, the case was dropped.
That was the turn of the tide of any GOP antitrust action. With the 2010 Citizens United decision by the Supreme Court that legalized payoffs to politicians, anti-competitive collusion and price-fixing was given a free hand. Congress has stood by. They can hold all the hearings they want and pass all the bills calling for further study they want. But unless the president in the Oval Office and majorities in the House and Senate agree to promote competition, citizens should not expect much.
St. Paul economist and writer Edward Lotterman can be reached at stpaul@edlotterman.com.
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