Below the Fold - where’s the beef… profits going?

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Is the only thing keeping you from eating vegetables a lack of time? For kids, it seems so. In the U.S., most kids only have about ten minutes to eat after spending half their allotted lunch break walking to the cafeteria and waiting in line for their meal. A new study finds that by the time they sit down, their first priority is eating the yummier items on their plate. If given more time, children end up eating the fruits and vegetables, too! Unsurprisingly, the impact of a longer lunch period is greater on low-income families who can’t afford to bring their own meal from home to avoid lunch lines.

EDUCATION

China cracks down on lucrative tutoring industry to ease burden on families
Sun Jul 25

In an effort to ease the burden on both parents and kids, China has banned a number of after-school education options. What started in the 1990s to help Chinese students improve their English for overseas education has grown into a booming industry where affluent families spend big money to help their children get ahead. In fact, the private tutoring institutions have been so successful that many are now publicly traded companies. Some founders have even become billionaires — though the crackdown has taken away this status as stocks immediately plunged in response.

What exactly is China banning?

First off, for-profit companies now face severe business limitations. They can no longer go public, raise capital from foreign investors, or poach school teachers with the incentive of higher paying salaries.
Tutoring sessions are also being restricted, both online and not. Sessions are now limited to 30 minutes a day and must end by 9 PM. Additionally, private tutoring is also banned on weekends and school breaks.
For-profit tutoring on official school subjects is also prohibited, such as math, English, and science. And anyone younger than six-years-old can no longer be offered these classes.

The other issue possibly motivating these changes is China's declining birth rate. Despite lifting the one-child policy to help the country’s ageing population, young households are unable to grow their families due to the financial burden that comes with maintaining their kids’ learning opportunities — one father shared how a single, hour-long tutoring session costs a tenth of his entire monthly earnings. Some worry the ban isn’t enough, though, claiming wealthy families who want their children to maintain a competitive edge will instead turn to black market solutions that will eventually emerge (and with even higher prices).

Our Sources:

→ Initial coverage: V ice
→ Stocks plunge and billionaires suffer: Bloomberg
→ More details on the ban: South China Morning Post
→ Parents struggle with education costs: Al Jazeera
→ Potential black market for education: MSN News

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AGRICULTURE

New rules aim to dismantle market power in the U.S. cattle industry
Wed Jul 21

Whole beef prices for American consumers are up 40%, but the profits from this surge are not being fairly distributed across the global supply chain. Four meatpacking companies (who have dominated the industry for roughly 25 years) are now making up to $1,000 in profit per head of cattle they slaughter and package, which is 20 times their norm of $50. Meanwhile the farmers raising and selling the cattle to these four meatpackers are struggling to break even.

In fact, while meatpacker revenues increased by up to 66% between 2010 and 2020, farmer shares decreased by 9%. Most farmers only make 14 cents per dollar spent on food (down from 35 cents in 1970). Now, the Biden administration has issued an executive order aimed at ending this abuse of market power. A number of steps have already been taken as a result, such as:

Diversifying the market.. The United States Department of Agriculture (USDA) will spend $500M to build more meatpacking plants closer to farmers, providing them an option outside the big four meatpackers to either keep processing local or negotiate better cattle prices.
Opening up capacity. This investment in more packing capacity also helps avoid unplanned disruptions that limit supply and surge prices for consumers. For example, supplies were greatly reduced when a fire shut down a Tyson plant that processed more than 6,000 cattle per day for several months in 2019.
Limiting long-term contracts. Meatpackers often make contracts months in advance, which secures their supply but leaves the sale price unknown to farmers. One bill introduced in the Senate would require meatpackers to instead negotiate prices every week to increase competitive bidding.
Making it easier for farmers to sue contracted meatpackers over unfair, discriminatory, or deceptive practices. That said, R-CALF USA, a nonprofit dedicated to ensuring profitability for the U.S. cattle industry, worries this is inadequate, given their ongoing 2019 lawsuits against the big four meatpackers.

Until these changes return results, beef prices remain high. Grocery stores have increased beef prices by 5% and steaks 9%. Some restaurants have taken red meat off the menu altogether. In the meantime, consider purchasing your meat directly from farmers in your area. This local food directory from the USDA helps you find farms selling meat near you.

Our Sources:

→ Full coverage: I nvestigate Midwest & New York Times
→ Biden’s executive order: White House
→ New plans from the USDA: Associated Press & Senator Grassley

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Brocc-on! I have more time to eat.



Art Credit: Below the Fold

Below the Fold

2261 Market St # 4135

San Francisco, CA 94114-1612

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Below the Fold - where’s the beef… profits going?

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