CORPORATE FARMING NOTES
Smithfield merger completed; bills introduced on packer ownership of livestock
Smithfield Foods, the nation’s largest pork packer and producer, announced on May 7 that the acquisition of Premium Standard Farms, the second largest producer and sixth largest packer, is complete. The merger brings Smithfield’s holdings to well over 1.1 million sows, over 20 percent of U.S. hog production and 31 percent of pork packing.
Initially, with the urging of farmers, farm and rural organizations, and members of Congress, the acquisition was put on hold while the Justice Department’s Antitrust Division investigated the impact of the transaction on competition in the pork sector. On May 4 Justice announced the closing of its investigation and their finding that the merger would not harm competition, consumers, or farmers.
“It looks like nobody’s going to stand in the way of all this vertical integration until we’ve got just one meatpacker in the country,” said Senator Charles Grassley (R-IA). “Maybe then the Justice Department will figure out that we’ve got a problem.”
Senator Grassley has introduced a bill to prohibit packer ownership of livestock. Senator Tom Harkin (D-IA) has introduced the Fair and Competitive Agricultural Markets Act to address livestock market competition issues.
On May 3, Representative Leonard Boswell (D-IA), the chair of the House Agriculture Subcommittee on Livestock, introduced a companion bill to Senator Harkin’s competition bill in the House. Representatives Barbara Cubin (R-WY), Marcy Kaptur (D-OH), Bruce Braley (D-IA), and Dave Loebsack (D-IA) were all original co-sponsors and Representative Jeff Fortenberry (R-NE) recently signed on as a co-sponsor.
The Livestock Subcommittee held a hearing on April 17 on livestock market competition issues. The Center for Rural Affairs, National Farmers Union, and American Farm Bureau Federation all testified in support of a number of provisions contained in Representative Boswell’s and Senator Harkin’s livestock market competition bills, including prohibiting mandatory arbitration in production contracts and better enforcement of the Packers and Stockyards Act, specifically through directing enforcement and legal actions through an Office of Special Counsel for Competition at USDA.
In policy debates, when voices that are at times disparate agree, policymakers should take note. We applaud Representative Boswell for bringing these issues forward in the House. We hope it is a sign we are moving closer to addressing these issues in the 2007 farm bill.
You can keep up with the progress of these bills and other aspects of competition issues on a special page of our website, www.cfra.org/competition.
Contact: John Crabtree, johnc@cfra.org or 402.687.2103 x 1010 for more details.
Smithfield Foods, the nation’s largest pork packer and producer, announced on May 7 that the acquisition of Premium Standard Farms, the second largest producer and sixth largest packer, is complete. The merger brings Smithfield’s holdings to well over 1.1 million sows, over 20 percent of U.S. hog production and 31 percent of pork packing.
Initially, with the urging of farmers, farm and rural organizations, and members of Congress, the acquisition was put on hold while the Justice Department’s Antitrust Division investigated the impact of the transaction on competition in the pork sector. On May 4 Justice announced the closing of its investigation and their finding that the merger would not harm competition, consumers, or farmers.
“It looks like nobody’s going to stand in the way of all this vertical integration until we’ve got just one meatpacker in the country,” said Senator Charles Grassley (R-IA). “Maybe then the Justice Department will figure out that we’ve got a problem.”
Senator Grassley has introduced a bill to prohibit packer ownership of livestock. Senator Tom Harkin (D-IA) has introduced the Fair and Competitive Agricultural Markets Act to address livestock market competition issues.
On May 3, Representative Leonard Boswell (D-IA), the chair of the House Agriculture Subcommittee on Livestock, introduced a companion bill to Senator Harkin’s competition bill in the House. Representatives Barbara Cubin (R-WY), Marcy Kaptur (D-OH), Bruce Braley (D-IA), and Dave Loebsack (D-IA) were all original co-sponsors and Representative Jeff Fortenberry (R-NE) recently signed on as a co-sponsor.
The Livestock Subcommittee held a hearing on April 17 on livestock market competition issues. The Center for Rural Affairs, National Farmers Union, and American Farm Bureau Federation all testified in support of a number of provisions contained in Representative Boswell’s and Senator Harkin’s livestock market competition bills, including prohibiting mandatory arbitration in production contracts and better enforcement of the Packers and Stockyards Act, specifically through directing enforcement and legal actions through an Office of Special Counsel for Competition at USDA.
In policy debates, when voices that are at times disparate agree, policymakers should take note. We applaud Representative Boswell for bringing these issues forward in the House. We hope it is a sign we are moving closer to addressing these issues in the 2007 farm bill.
You can keep up with the progress of these bills and other aspects of competition issues on a special page of our website, www.cfra.org/competition.
Contact: John Crabtree, johnc@cfra.org or 402.687.2103 x 1010 for more details.
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