Corporate Farming Notes: Partial Victory on the Mega JBS Merger

The U.S. Justice Department and 13 state attorneys general filed a lawsuit with the U.S District Court in Chicago on October 20, 2008, seeking to stop the Brazilian meatpacker JBS’s proposed acquisition of National Beef Packing.

“The transaction was likely to lead to lower prices for cattle producers and to higher prices on the output side,” Thomas Barnett, Assistant U.S. Attorney General for Antitrust, told Reuters.

According to the Justice Department, their antitrust suit was joined by the states of Colorado, Iowa, Kansas, Minnesota, Missouri, Montana, North Dakota, Ohio, Oklahoma, Oregon, South Dakota, Texas and Wyoming.

In March 2008 JBS, the largest beef packer in the world, announced their intention to purchase National Beef and the Smithfield Beef group. Those acquisitions would have reduced the U.S. cattle market from five major packers to just three and would have made JBS the largest U.S. beef packer with nearly 35 percent of the cattle slaughter market, followed closely by Tyson and Cargill. The top four packers – JBS, Tyson, Cargill and National – together slaughter more than 85 percent of U.S. cattle.

Justice also announced that they will approve JBS’ purchase of the Smithfield Beef Group, including Five Rivers Cattle Feeding with the one-time capacity to feed 800,000 head of cattle in several states. National Beef announced it will vigorously oppose the government’s suit.

Many thanks to the literally thousands of Center for Rural Affairs supporters who took action to encourage the Justice Department to act on this merger.

A recent report commissioned by the Pew Commission on Industrial Farm Animal Production (www.ncifap.org) concludes that large, industrial livestock operations offer fewer economic benefits to rural communities and pay workers less than smaller operations.

According to the report authors – David Andrews and Timothy Kautza – large-scale, industrial livestock production returns $1 to local economies for every $1 spent, while smaller operations return $7 for every $1 spent. The authors also report that workers at industrial livestock operations earn 58 percent of the typical wages in their area, and 45 percent of hired farm workers at these operations earn less than the poverty level for a family of four.

Contact: John Crabtree, johnc@cfra.org or 402.687.2103 x 1010 for more information.

Get The Newsletter?