A U.S. trade delegation helped celebrate the long-awaited return of American beef to China. But here, the event took a radical and historical turn. Wal-Mart Brazil has managed to bring 20 major suppliers on stage to sign an agreement to achieve all these goals (and more). In the very short term, the company has brought together the presidents of the Brazilian operations for major groups such as Cargill, Johnson and Johnson, Kimberly Clark, PepsiCo, P-G, Sara Lee and Unilever. Twenty senior executives were on stage signing these aggressive chords. Many of these companies have been environmental leaders for years, but it was hard not to wonder why they had not already made these commitments. Walmart held an opening ceremony at its beef processing plant in Thomasville, Georgia, which will supply Angus Black Beef to about 500 of its retail stores in the southeast. In general, when grocers like Walmart sell minced meat or other cuts at the meat counter, they sell the finished product from another and hit their mark on it. Today, Walmart buys its beef primarily from Cargill and Tyson, two of the world`s largest raw materials meat companies. According to CNN, Foran has suggested that this dynamic has helped push up prices.
“We all know the market dynamics of what happens when you usually work in a duopoly,” he told analysts in June. “It`s not that good for the customer.” But this case is more complicated. Given that the plant is owned by Walmart, which only works with selected suppliers – including a variety of Angus cattle in a specific breed and supply chain – most Angus ranchers like Peterson are probably excluded. It could also mean that ranchers are facing stiffer competition elsewhere. If Walmart is increasingly dependent on its own supply and is starting to buy less beef, it is one less customer to which others can sell. This last link in the chain, known as case-ready processing, is not an essential function of meat packaging, says Derrell Peel, an agricultural economist at Oklahoma State University. The large meat kilns, Tyson, Cargill, JBS and Marfrig, which together slaughter more than 80% of American cattle — rely on their enormous size and often send their carcasses to other companies to make supermarket cuts. It is therefore unlikely that Walmart`s entry into Black Angus will disrupt the beef industry. 44 Farms, Mc6 Cattle Feeders, Creekstone Farms and FPL Foods are meeting with Walmart to deliver Angus beef to consumers. The Arkansas-based chain will develop a network of cattle farms and meat processing plants to provide Angus beef products exclusively for their stores, a step Walmart said to allow the company and its customers to have a better visibility of their food supply.