Cranberry harvest in central Wisconsin in 2023. Photo courtesy of iStock.

The Monopolies Behind Your Thanksgiving Dinner

Happy Thanksgiving! In 2021, Food & Power covered [[link removed]] an alleged corporate conspiracy to raise turkey prices. Today, we turn to the outer edges of the Thanksgiving table to look at the monopolies behind your cranberry sauce, glazed carrots, and pumpkin pie.

Central Illinois is the World’s Pumpkin Patch

‘Tis the season for canned pumpkin: 90% [[link removed]] of canned pumpkin sales happen between October and January. If you used canned pumpkin for your pie this Thanksgiving, chances are it came from Nestlé, whose popular Libby’s brand sells 80% [[link removed]] of canned pumpkin worldwide.

Libby’s processes all this pumpkin out of a single plant in Morton, Illinois, which sources more than 90% [[link removed]] of its pumpkin from farms within a 45-mile radius of its facility. The next largest pumpkin processor, Seneca Foods, runs a plant in nearby Princeville. As much as 95% [[link removed]] of pumpkins destined for processing come from this small “orange belt” in central Illinois. The soil and climate in this area are particularly conducive to growing pumpkins – Illinois farms produce anywhere from 5,000 to 25,000 more pounds [[link removed]] of the crop per acre than pumpkin farmers in other states.

Such concentrated production is increasingly risky as global climate change makes weather more volatile. Pumpkins are more vulnerable [[link removed]] to heavy rains than drought. Extreme wet conditions can delay planting and harvest while increasing the risk of plant diseases like mildew. Pumpkin yields fell 50% in 2015 due to heavy rain, creating a canned pumpkin shortage [[link removed]] that Thanksgiving. Precipitation in central Illinois has been trending upward [[link removed]] over time (though not as much as in other areas of the state).

Two Private Equity Giants Grow 60% of all Carrots

Earlier this month, Grimmway Farms recalled [[link removed]] several different kinds of organic carrots due to an E. coli contamination that hospitalized 15 people and led to one death [[link removed]]. Cases have been reported in 18 states, as Grimmway serves major national retailers including Aldi, Costco, Trader Joe’s, and Whole Foods.

You may not have heard of Grimmway, but you’ve probably heard of one of their many brands. The company sells carrots under the names Bunny Luv and Cal-Organic, as well as store-branded carrots for Whole Foods, Walmart, Topco, Target, Albertsons, Ahold-Delhaize, Kroger, Publix, Sobey’s, and Wegmans.

This outbreak had such a wide impact, in part, because carrot production is highly concentrated. Grimmway and another carrot company, Bolthouse, produce 60% [[link removed]] of all the carrots in the U.S. Both companies were acquired [[link removed]] by private equity firms in 2020 and 2019, respectively. Shortly after Butterfly Equity acquired Bolthouse from Campbell’s, Bolthouse bought up a competing carrot company, Rousseau Farming [[link removed]]. Since 2019, carrot prices have increased [[link removed]] more than 55%, significantly outpacing overall inflation.

The Cranberry Monopoly is a Farmer-Owned Co-op

Ocean Spray dominates the cranberry business, processing 60% of the global cranberry crop [[link removed]] and selling 70% [[link removed]] of all cranberry sauce. But unlike most food companies, Ocean Spray is a farmer-owned cooperative, which means cranberry farmers have some say over how the business operates. For instance, farmers voted [[link removed]] to keep the co-op independent when Pepsi tried to buy a stake in the mid-2000s.

The average [[link removed]] Ocean Spray farmer has been in the business for two to three generations, suggesting relative stability for co-op members. That said, of Ocean Spray’s more than 700 farmer members, the largest 50 produced about 65% [[link removed]] of its cranberries in 2003. Over the years, smaller members have accused the co-op of favoring larger members.

For example, when cranberry juice sales spiked in the late 1990s (as Sex and the City popularized the Cosmopolitan cocktail and new research revealed cranberries could prevent urinary tract infections), Ocean Spray offered farmers incentives and grants [[link removed]] to expand. But by the time these new vines matured, the fad had passed, and a glut of cranberries collapsed prices. Some farmers felt [[link removed]] that Ocean Spray could have foreseen this oversupply and been more cautious with growth, especially since below-break-even prices hit smaller farmers hardest.

During this cranberry glut, small farms felt pressure to keep up production, even when they could not afford the cost of running at full capacity because they risked losing their valuable quota rights to supply Ocean Spray. The co-op has a policy [[link removed]] that forces members to forfeit their quota allotment for a fraction of its value if they fail to deliver their quota for three years.

Prices did rebound in the mid-2000s, but cranberry farmers have never escaped their oversupply dilemma. Until recently, a federal program called the cranberry marketing order [[link removed]] gave a body of farmers and processors the ability to petition the USDA to control the supply of cranberries. Ocean Spray representatives held a [[link removed]] plurality [[link removed]] of seats on this committee, though just short of the majority. In overly productive years, the industry destroyed as much as 25% [[link removed]] of the annual crop to stabilize prices. But earlier this year, farmers voted [[link removed]] to end this 50-year-old program.

Ocean Spray reportedly [[link removed]] directed its farmer members to vote to end the program. It remains to be seen if this dominant cranberry cooperative will maintain prices for farmers without industry-wide supply controls.

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What We're Reading

Multiple class action lawsuits accuse four frozen potato corporations, who control 97% of the market, of acting as a cartel to raise prices and boost profit margins. Between 2022 and 2024 frozen potato product prices rose 47%, outpacing general inflation. ( Fortune [[link removed]])

The Democrat-controlled Senate Agriculture Committee finally released [[link removed]] its draft text for the Farm Bill, after the Republican-controlled House released its draft [[link removed]] in May. Both parties talk about passing a Farm Bill during the lame duck period, but Politico reports that’s not looking likely. Funding for major ag programs expires at the end of the year, so at a minimum Congress will need to pass another temporary extension of the current Farm Bill to keep systems running. ( Politico [[link removed]])

Increased competition does not necessarily mean that companies will share more of their gains with workers and farmers. Law professor Luke Herrine complicates the history of intense meatpacking competition in the 1960s and highlights the ways a “new breed” of packers got ahead by moving to rural areas, busting unions, speeding up work, and diminishing farmer autonomy. ( LPE Blog [[link removed]])

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Written by Claire Kelloway

Edited by Phil Longman and Anita Jain

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