Walmart’s Vertical Integration Reshapes U.S. Beef Market Dynamics
In a free-market system, private businesses typically control commerce, and competition is encouraged. However, Walmart’s move to vertically integrate its beef supply chain challenges this norm. The retailer is reportedly creating a closed system where it controls every step of beef production—from cattle genetics and feeding to slaughter and retail sales.
Walmart’s vertical integration eliminates the decentralization that is a hallmark of free-market capitalism. By controlling the entire beef process, Walmart can dictate production levels and set prices to influence consumer demand. This approach allows Walmart to manage its beef supply while limiting competition, especially in the calf, yearling, and fed cattle markets.
With this system, Walmart has significant power over both supply and demand. If demand is high for beef, Walmart can manipulate pricing to either encourage consumption of more expensive beef or shift customers to other products like chicken or pork. This raises concerns about the fairness of such practices and the impact on smaller ranchers.