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Market Concentration and Marke Power Abuses

Econ101

Well-known member
Articles in this document:



NFU: Study Shows Ag Market Concentration on the Rise

AMI: Consolidation in Meat Packing Industry Largely Unchanged In Recent Years, Government Data Show

Testimony Presented to U.S. House Agriculture Subcommittee

Study Shows Ag Market Concentration Increasing



Study Shows Ag Market Concentration on the Rise



KTIC 840 Rural Radio

April 16, 2007

Nebraska, US



A study commissioned by National Farmers Union shows that agricultural market concentration is rising steadily. The statistics show increased concentration in every industry except ethanol production – where the top four companies control 31.5-percent of the marketplace – down from 73-percent 20 years ago.



According to the study – the top four beef packers dominate 83.5-percent of the market. As for pork - four packers control 66-percent of that market – and the top four poultry companies process 58.5-percent of the broilers in the U.S. One company appears in the top four of each of these categories – Tyson Foods. That highlights another finding. The retailing industry has gradually been increasing its degree of concentration – with the top five companies now controlling 48-percent of U.S. food retailing – up from just 24-percent a decade ago.



NFU President Tom Buis (BUY-us) says the study confirms that consolidated and non-competitive markets flourish at the expense of independent family farmers in the absence of public policy intervention. He says Congress needs to act to restore competition in the marketplace. The 2007 Farm Bill – he says – is the perfect opportunity to make that happen. Buis will discuss that with the House Ag Subcommittee on Livestock, Dairy and Poultry today (Tuesday) during a hearing to discuss market concentration.



kticam.com



Consolidation in Meat Packing Industry Largely Unchanged In Recent Years, Government Data Show



American Meat Institute Tells National Farmers Union that Data and Studies Show Meat Industry is Competitive



Source: American Meat Institute (AMI)

April 16, 2007



Washington, D.C., April 16, 2007 - "National Farmers Union (NFU) apparently is hoping that reporters will read their press release and not refer to government data about the state of consolidation in the meat industry,” American Meat Institute President J. Patrick Boyle said today in response to release of a report on agricultural concentration by NFU.



Boyle released a series of charts that plot USDA data about the structure of the meat industry. “NFU may not want reporters to see the ‘flat-line’ depiction of beef industry concentration over time, but by anyone’s view, these data do not constitute a trend,” Boyle said.



“While pork packing has seen some change, the trend is modest and stable. And more importantly for American consumers, the percent of their disposable income spent on meat and poultry has declined throughout the centuries to 1.9 percent – the lowest of any nation in the world."



The charts may be viewed at the following link: http://www.meatami.com/content/businesseconomics/meatindustrystructurecharts.pdf.



“But the most important question is – what impact does this structure have on competition? Study after study has concluded that the meat industry is dynamic and competitive as it is currently structured,” he said. Boyle pointed to summary of these reviews that is available on the American Meat Institute web site at: http://www.meatami.com/Content/PressCenter/factsheets/studiesofusredmeatindustrystructure.pdf.



“While NFU may wish to persuade that meat industry structure is to blame for challenges faced by NFU’s members, merely wishing cannot make it so when the data and comprehensive analyses prove otherwise.”



meatami.com



Testimony Presented to U.S. House Agriculture Subcommittee



KTIC 840 Rural Radio

April 16, 2007

Nebraska, US



Lyons, Nebraska - On April 17, 2007 in Washington D.C, Development and Outreach Officer for the Center for Rural Affairs, John Crabtree will testify on competition and concentration issues within the livestock industry to the U.S. House Agriculture Subcommittee on Livestock, Dairy and Poultry.



"If we hope to create a farm bill that can be held up as a solution to some of the challenges that family farmers, ranchers and rural communities face, then we should all support a federal ban on packer ownership of livestock and a comprehensive competition title in the farm bill," commented Crabtree.



Currently, a handful of corporations dominate the American food system. The concentration of market control in the top four firms in U.S. food retailing, grain processing, red meat processing, poultry processing, milk processing and nearly every category of food processing has reached unprecedented levels.



Moreover, the rapid trend toward vertical integration further exacerbates the horizontal concentration in packing, processing and production. As the livestock sector has become increasingly concentrated and integrated, packers and processors increasingly control production at all stages.



In many rural places where livestock are raised there are only a few, or even just one, packer or processor for a given livestock species. This is especially true in the livestock and poultry sectors. At the same time there has been a dramatic increase in the use of production and marketing contracts that further diminish the bargaining power of farmers and ranchers. Currently, fully 89% of hogs are either owned outright by packers or tightly controlled through various contracting devices. Many farmers and ranchers face price discrimination and severely limited market access as a result.



USDA has demonstrated a nearly complete inability to enforce the Packers and Stockyards Act and other livestock market competition laws. The audit of the Packers and Stockyards Administration performed by USDA's Office of Inspector General that was released in February 2006 revealed that the Packers and Stockyards Administration has utterly failed to enforce the very law that gives the agency a reason to exist.



Repeated calls for competition reforms from farmers and ranchers as well as the National Commission on Small Farms, General Accounting Office, and Inspector General have fallen on deaf ears at USDA.



That is why Congress must act to define the rules of livestock market competition and provide clear direction for USDA's enforcement. Congress should not let another farm bill go by without making changes in the Packers and Stockyards Act and Agricultural Fair Practices Act that are necessary to breathe some life and competition back into livestock markets.



To view John Crabtree's Statement visit: http://www.cfra.org/CompetitionTestimony



kticam.com



NFU: Study Shows Ag Market Concentration Increasing

USAgNet - 04/17/2007



Agricultural market concentration is rising steadily, according to a study released by National Farmers Union.



NFU released the findings of a NFU-commissioned study conducted by Drs. Mary Hendrickson and William Heffernan of the University of Missouri on the concentration of agricultural markets. The statistics revealed increased concentration in every industry except ethanol production.



The NFU study documents that the top four beef packers dominate 83.5 percent of the market, four pork packers control 66 percent of that market and the top four poultry companies process 58.5 percent of the broilers in the United States. Tyson Foods is listed in the top four of each of these categories. The retailing industry has been gradually increasing its degree of concentration, with the top five companies controlling 48 percent of U.S. food retailing, compared to 24 percent a decade ago.



“This study supports what we have long known,” NFU President Tom Buis said. “In the absence of public policy intervention, consolidated and non-competitive markets flourish, while independent family farmers disappear. Congress must take action to restore competition in the marketplace. The 2007 Farm Bill is the perfect opportunity to make that happen.”



The study also found that ethanol production is the only agricultural sector in which concentration has steadily decreased. Today, the top four companies control 31.5 percent of the marketplace. In 1987 the top four companies owned 73 percent. Farmer owned ethanol plans account for 39 percent of total capacity.



“Renewable fuels is one of the most exciting areas of agriculture and is a clear example of the impact and potential for public policies that encourage competition and reward local ownership,” Buis said. “It is important to continue this trend for ethanol but also expand rural ownership to our other agriculture-related sectors.”



Buis will testify before the House Agriculture Subcommittee on Livestock, Dairy and Poultry, chaired by Rep. Leonard Boswell, D-Iowa, at a Tuesday hearing to discuss market concentration.



wisconsinagconnection.com
 
A

Anonymous

Guest
Tuesday, April 17, 2007

Media Contact:
Scott Kuschmider (202) 225-1496
[email protected]


Ag Subcommittee Reviews Livestock Market Structure

WASHINGTON - Today, the House Agriculture Subcommittee on Livestock, Dairy, and Poultry held a hearing to review the market
structure of the livestock industry. Congressman Leonard Boswell of Iowa is Chairman of the subcommittee.

"Today, we gathered a wealth of information on both sides of the issue on market structure, which will be extremely helpful as we
move forward on the farm bill," said Chairman Boswell. "I was, however, very disappointed by the testimony presented by USDA
officials and their inability to answer specific questions regarding packer control in the cattle industry."


"I strongly believe that existing authority must be strictly enforced to ensure a fair, orderly and transparent livestock market
function," said Subcommittee Ranking Member Robin Hayes of North Carolina.
"I appreciate the testimony from today's witnesses, but
it is clear there is not a consensus on how Congress should move forward on these issues. Before there is any discussion of
including these provisions in the farm bill, more work needs to be done on each of the proposals discussed today."

The subcommittee heard testimony from three panels of witnesses. The first panel included USDA's Grain Inspectors, Packers and
Stockyards Administration (GIPSA) head James E. Link. He was joined by Mary K. Muth, PhD, of RTI International, which conducted
GIPSA's Livestock Meat and Marketing Study. The study, released earlier this year, addresses the economic effects that alternative
marketing arrangements outside the spot market have on livestock and meat industries.

The second and third panel was comprised of representatives from livestock producer groups, major farm organizations, researchers,
and processors. The panelists spoke about the major issues facing the livestock sector today, including the processor-producer
relationship, packer ownership of livestock, mandatory country-of-origin labeling, and animal identification.

The opening statements of all eight witnesses are available on the Committee website at
http://agriculture.house.gov/hearings/index.html. A full transcript of the hearing will be posted on the Committee website in 4-6
weeks.

###


The U.S. House Committee on Agriculture web site http://agriculture.house.gov has additional information on this and other subjects.
 
A

Anonymous

Guest
I have to congratulate this author on his honesty in this story--
NCBA and other meat industry groups, such as American Meat Institute, expressed support for alternative marketing arrangements such as forward contracts, production contracts, packer ownership and custom feeding.

He recognizes that NCBA long ago quit being a cattle or cattlemans industry group and/or supporting the US cattleman and is now a meat industry group- bought and controlled by the Big Packer Corporates.....

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Industry to Congress: Stay out of cattle marketing



By Tom Johnston on 4/18/2007 for Meatingplace.com



A study by USDA's Grain Inspection, Packers and Stockyards Administration concluded that flexible marketing choices have benefited some producers while maintaining the market's competitiveness.



All the more reason, the National Cattlemen's Beef Association told the U.S. House Agriculture Subcommittee on Livestock, Dairy and Poultry at a hearing Monday, that the federal government should shelve any legislation that would restrict the way producers market their cattle.



"When it comes to market structure and competition, NCBA's position is simple – we ask that the government not tell us how we can or cannot market our cattle," said John Queen, NCBA president and North Carolina cattle producer.



NCBA and other meat industry groups, such as American Meat Institute, expressed support for alternative marketing arrangements such as forward contracts, production contracts, packer ownership and custom feeding.



"We believe the strength of the livestock marketing system in the U.S. is the flexibility it provides to producers, packers/processor and retailers in responding to market signals and offering an increasing variety of alternatives for the producer through to the consumer," AMI President J. Patrick Boyle said.



meatingplace.com
 

Econ101

Well-known member
A study by USDA's Grain Inspection, Packers and Stockyards Administration concluded that flexible marketing choices have benefited some producers while maintaining the market's competitiveness.

In other words, it has advantaged some producers over others and helped the cheap food policy the industry is trying to push on producers.

In their view, being competitive means livestock producers make less money. They even point out that the price of beef hasn't increased with inflation (CPI). See related topic.

It is absolutely amazing to me why producers support the NCBA in their efforts to cheat them and fellow producers (MRJ :twisted: :twisted: ).
 
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