Groups Send Letter to Justice Opposing JBS Packer Deal
Grassley doubts action, but doesn't plan to give up.
Jason Vance
Published: Mar 27, 2008
JBS SA bought Swift and Company last year making them the third largest beef packer in the U.S. Earlier this month they acquired National Beef Packing, Smithfield Food's beef operations and Five Rivers Ranch cattle feeding, which would make them the largest packer in both the U.S. and the world.
A letter from 73 groups has been sent to the U.S. Department of Justice asking them to scrutinize the deal and consider blocking the merger. They state that having only three major beef processors could adversely affect consumers as well as further diminish the volume of cash market purchases because of ongoing vertical integration.
"This would constrict access to the cash market more than it already is, as limited access to the cash market already impacts the prices received for all classes of cattle because the cash market continues to set the base price for all transactions," says R-CALF USA Vice President Randy Stevenson, who also co-chairs the group's marketing committee. "The signatories state that they believe the open market, competitive bid percentage of cattle, industry wide, is less than 35% today."
Senator Charles Grassley, R-Iowa, has been a long-time supporter of a ban on packer ownership of cattle and has expressed his opposition to the deal but doubts the Justice Department will act.
"Based on the dozens of letters to Justice I've written over the past 15 years about ag mergers," Grassley says, "I'm very pessimistic, but I don't give up because we aren't going to change the anti-trust laws, which doesn't please me, about the only tool I have is writing to the Justice Department."
Grassley says the anti-trust laws are oriented toward protection of consumers more than production interests and agriculture is so much different that there is not an appreciation of agriculture within the Department of Justice.
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