I don't think the gov't has chosen a 'cheap food' policy on purpose. I think competiton in agriculture has kept the price of commodities down.
The first thing we do if we need to expand is grow more. More pounds of beef, more acres of grain.
The yield per acre or pounds of beef per cow has gone up dramatically. At the same time fewer people are needed to provide the same level of product.
30 years ago no one had heard of 500 cow ranches. Today they are not considered out of place. 30 years ago a farmer cultivating 2-3000 acres was a big deal, now that is small.
Why does the packing industry which has had to change dramatically over the last 30 years take the flak for all the industries woes?
Econ would have us believe BSE was caused by the packers to manipulate the market. That's like shooting your foot off to get a disability pension. He says pushing a swing makes it go higher, but then it comes back and swings higher the opposite direction as well. So much for a positive manipulation if it causes an equally large loss.
Family farms are using the same mechanisims the packers are. Greater numbers of cattle, or more pounds of beef supplying the living of fewer people on the same overhead. This is called efficiency.
A family farm that grows crops and has a feedlot included is a good example of vertical integration. Costs are avoided on the calves and on the transportation of feedstuffs. More dollars per head are realized and the owner stays fully employed. The owner knowing how the calves have been handled knows they are better than average and wants to capture some of the extra value they hold on the rail. They approach a packer and look for a deal on the grid. The packer gets a group of cattle without some of the risk of buying unknown cattle. If they don't grade well the price is adjusted, the owner takes the hit. If they do better, the owner does better, and the packer is glad as they have a better carcass to sell.
Somehow R-calf and Econ hate to see a private deal like this occur. R-calf has a LMA bias, Econ is just anti packer. How did the packer manipulate the family farm into becoming more efficient and asking for a larger share of value put into the cattle?
If the industry continues this direction, the cattle owners will continue to expand, Tyson and Cargill might have to offer more competitive contracts (if possible) to get any cattle. Or they will be relegated to those hobby cattle spoken of earlier. The cattle owners have he most incentive to expand into slaughter and even retail ventures to capture the most dollar from each pound of beef.