Cattle Groups React to Beef Merger
R-CALF USA says the transaction that will create the world's largest beef packing company hampers competition, but NCBA is reserving judgment.
Sam Anderson
Published: Jun 1, 2007
Latin America's largest beef packer, Brazil's JBS-Friboi, is set to acquire the third-largest beef packer in the U.S., Swift Co. The transaction would create the world's largest beef packer, and R-CALF USA is not happy about it.
According to R-CALF Trade Committee Chair Eric Nelson, the acquisition could be trouble for U.S. beef producers. "U.S. cattle producers cannot expect to win the competition with Brazil in a marketplace that turns a blind eye to anti-competitive practices and does not include rules that recognize the unique characteristics of the U.S. cattle industry. In a free-for-all competition with Brazil under current market conditions, Brazil could drive our domestic prices into the basement, resulting in a mass exodus of U.S. cattle producers."
NCBA's Joe Schuele points out that since JBS is based in Brazil, its acquisition of Swift would not affect domestic market concentration. Additionally, Schuele points out that the U.S. packing industry won't get any more access to Brazilian beef imports, which are highly restricted, than before the merger.
"Cattlemen are pragmatic businessmen - they want to do business with good people," Schuele tells Farm Progress. How JBS fits the bill remains to be seen.
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