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Hoosier Ag Today – Monday
– October 20, 2008 – 4:46 p.m. MDT
(quotes R-CALF
USA President/Region VI Director Max Thornsberry, DVM)
Government Moves to Stop Major
Packing Company Merger
U.S. Premium Beef, LLC and
National Beef Packing Company, LLC both confirm that the United States
Department of Justice has filed a civil antitrust suit in the U.S. District
Court for the Northern District of Illinois to enjoin JBS S.A.’s proposed
acquisition of National Beef. The suit contends the deal would cause financial
hardship on consumers and producers and harm industry competition.
The DOJ concluded that the sale would result in lower prices paid to cattle
suppliers and higher beef prices for consumers. In court documents, the
department also said, the deal would also eliminate a "competitively
significant" packer and place more than 80 percent of domestic cattle slaughter
capacity in the hands of three companies: JBS, Tyson Foods Incorporated and
Cargill Incorporated.
Steve Hunt, Chief Executive Officer of USPB said - we are disappointed that the
DOJ does not recognize that this transaction is pro competitive and we plan to
vigorously contest the DOJ’s attempt to block it. John Miller, CEO of National
Beef said - this transaction will bring tremendous value to our customers and
other stakeholders as well as increase the depth and reach of our
industry-leading programs that deliver better value to both cattle producers and
beef consumers.
The Department of Justice is not challenging JBS‘s proposed purchase of
Smithfield Beef Group, the nation‘s fifth-largest beef packer, or the Five
Rivers cattle feeding operation.
DOJ Action Reaction
Senator Tom Harkin has commended the civil antitrust lawsuit filed by the
Department of Justice to block the proposed acquisition by JBS of National Beef
Packing. Harkin called the announcement - long overdue – and welcome news for
cattle producers and consumers. He added - it does not take much for one company
to leverage its power over today’s cattle markets. Harkin remains - concerned
over the impacts of JBS’s acquisition of Smithfield’s beef division on
independent cattle producers.
Iowa Senator Chuck Grassley’s reaction was down to earth - thank goodness the
Justice Department finally has recognized that there is too much concentration
in agriculture, and is taking some action to protect consumers and ensure there
is a level playing field for independent producers and family farmers. He said -
its welcome news for those of us who’ve been urging antitrust enforcers to pay
more attention to the wave of consolidation in the agricultural sector.
R-CALF USA applauded the suit, which was joined by numerous state attorneys
general offices. Dr. Max Thorsnberry, R-CALF USA President/Region VI Director,
said - we believe the Justice Department and state Attorneys General have an
extremely strong case and we are extremely pleased that they have taken action
to protect the competitiveness of the U.S. cattle industry.
The American Farm Bureau Federation and National Cattlemen‘s Beef Association
also weighed in on the move Monday. NCBA said it appreciated the Department‘s
attention to the balance of competition within the beef industry. Farm Bureau
did not take a position on the proposed acquisition - but President Bob Stallman
says the group is pleased the Justice Department thoroughly reviewed the
proposal and is taking action. He said it proves the system works.
The Attorneys General joining the Department of Justice Suit include those
representing: Colorado, Iowa, Kansas, Minnesota, Missouri, Montana, North
Dakota, Ohio, Oklahoma, Oregon, South Dakota, Texas and Wyoming.
http://www.hoosieragtoday.com/wire/news/01623_doj_180806.php
© 2006-2008
Hoosier Ag Today
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