Billings, Mont. – R-CALF USA was pleased to learn that on Friday, Nov. 7, 2008, four more state attorneys general – from Arizona, Connecticut, New Mexico and Mississippi – joined the U.S. Department of Justice in its complaint against Brazilian-owned meatpacker JBS’ attempts to acquire National Beef Packing Co., the fourth largest meatpacker in the United States. Thirteen other attorneys general – from Colorado, Iowa, Kansas, Minnesota, Missouri, Montana, North Dakota, Ohio, Oklahoma, Oregon, South Dakota, Texas and Wyoming – signed on when Justice filed its original complaint on Oct. 20, 2008.
“We are grateful these other attorneys general have joined this fight and hope this action stops the trend toward more and more concentration, and less and less competition,” said R-CALF USA CEO Bill Bullard. “With the recent acquisition of Smithfield Beef Group by JBS, our cattle market in the U.S. is now so highly concentrated that only four firms control about 85 percent of the steer and heifer slaughter, which means we now have only a marginally competitive market left for independent U.S. cattle producers. The remaining packers are able to exert monopoly type power to exploit producers and consumers.
“With respect to U.S. antitrust laws, the agency charged with enforcing those laws is the Justice Department, but states also have the authority to enforce U.S. antitrust laws when those laws affect the citizens of their respective states, giving those state attorneys general tremendous authority to protect the economic interests of the citizens within their states,” he continued. “What R-CALF has done is explain to them how this proposed acquisition will adversely affect cow/calf producers all across the U.S., and they understood the problem and agreed to step to the plate to defend the interests of cattle producers and consumers. We are surprised the state of Nebraska didn’t join and hope to see that change in the near future.”
It is important to understand that those individuals at the grassroots level – those in agriculture – produce new wealth every year in this great nation, and that these participating states have realized the importance of ensuring that those who generate such wealth receive a competitive value for the products they sell, and that this commerce is what drives and supports Rural America’s ability to generate new wealth and to create a vibrant economy, Bullard noted.
“A competitive marketplace is not one where you have just a handful of corporations controlling the entire market,” he emphasized. “A competitive market is when you have all the participants in the marketplace with an equal opportunity – equal access to the marketplace itself.”
Bullard also remarked that R-CALF USA took the lead as soon as the mergers were announced to begin informing Justice and the state attorneys general on how the U.S. cattle markets function and how the proposed mergers would further disrupt cattle markets, including JBS’ proposed acquisitions of Smithfield and Five Rivers Ranch Cattle Feeding. He said that cattle producers should take note that R-CALF USA’s competitor - the National Cattlemen’s Beef Association (NCBA) – stood on the sidelines of this compelling merger without taking a position until after the government and 13 states stepped forward to announce that this merger would result in lower prices paid to producers and consumers.
“The addition of these new states further demonstrates that the proposed merger would have widespread negative impacts on the U.S. cattle industry,” Bullard pointed out. “Many of the states that have joined this lawsuit represent cow/calf production and not feeding operations, indicating that these states understand how reduced competition at the packer level will harm their respective constituencies. This is a watershed moment for the cattle industry as it clearly shows that the conventional organizations, which have consistently supported policies advocated by the packers, have been ignoring the economic interests of cattle producers.
“Theodore Roosevelt once said it is the obligation of people in business to support their trade associations, and this should give producers and business people out there a stark contrast as to which trade association is truly representing their interests,” Bullard asserted. “Clearly, on this JBS issue, R-CALF USA has been front and center from the start representing the interests of farmers and ranchers who raise and sell cattle and the rural communities they support.”