Grassley concerned about meat industry consolidation
March 06, 2008
by Bryan Salvage
WASHINGTON — Further consolidation in the beef industry will reduce market opportunities for farmers, increase prices and provide less choice for consumers, Senator Chuck Grassley of Iowa wrote in a letter to Assistant Attorney General Thomas Barnett. Mr. Grassley asked Mr. Barnett for added scrutiny of Brazil-based JBS SA’s plans to purchase National Beef Packing Co., Smithfield Beef Group and Five Rivers Ranch Cattle Feeding L.L.C.
"I’ve been pressing the Justice Department about consolidation in agriculture, but the department doesn’t appear to think there is a problem," Mr. Grassley said. "Quite honestly, I don’t know how much longer they can continue to let these mergers slide by. Now producers will only have three major beef packers to sell their livestock to. Is it going to take only one packer in the industry for the Justice Department to say there isn’t competition?"
He said his legislation to ban packer ownership of livestock, which is included in the Senate version of the farm bill, would have an impact on the proposed JBS acquisition. The feedlots JBS would be purchasing would be considered "packer owned" and would not be allowed under Mr. Grassley’s bill. The packer ban would make it unlawful for a packer to own or feed livestock intended for slaughter.