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The National Farmers Union and the American Farm Bureau Federation are calling on the U.S. Department of Justice to take a closer look at a proposed acquisition of the United States' fourth- and fifth-largest beef processor and the nation's largest cattle feedlot operation by JBS-Swift, a Brazilian-based company.
JBS already owns Swift & Co., which operates a packing plant in Grand Island that employs more than 2,500 people.
A recent letter to U.S. Attorney General Michael B. Mukasey Friday from Tom Buis urged Mukasey to conduct a thorough and comprehensive anti-trust investigation before allowing the acquisition to proceed.
"Independent livestock producers have witnessed the control of the beef processing market rapidly consolidate into the hands of a few companies," Buis said. "Without free, fair and transparent markets, independent livestock producers cannot survive. Further consolidation of the beef processing market will not foster competition."
JBS-Swift has proposed purchasing National Beef Packing, LLC, the nation's fourth-largest beef packer; Smithfield Beef, the fifth-largest beef processor; and Five Rivers Ranch Cattle Feeding, LLC, the nation's largest cattle feedlot operation.
Buis said allowing these acquisitions to take place will give JBS-Swift a daily slaughter capacity of more than 42,000 head within the United States, making the Brazil-based company the largest U.S. beef processor.
Brazil is already the world's largest beef-producing country.
AFBF President Bob Stallman expressed farmers' and ranchers' concerns about the proposed deal by Brazil-based JBS Swift in a letter to Douglas Ross, the special counsel for agriculture in the Justice Department's antitrust division.
"Our farmers and ranchers, especially our beef producers, expect a thorough review and analysis by the Department of Justice (DOJ) to determine what impact this will have at the producer level and the cattle markets," Stallman wrote.
He said the proposed $1.5 billion transaction would make JBS Swift the largest American beef processor by a significant margin and would remove an important independent bidder from the fed cattle market.
Stallman asked Ross to work closely with Agriculture Department officials to analyze the proposed acquisition of Smithfield beef assets, National Beef and Five Rivers Ranch Cattle Feeding by JBS Swift. Only last summer, Stallman wrote, JBS acquired Swift and Co., making JBS Swift the world's largest beef processor.
"Farm Bureau understands and appreciates that beef packers operate within a tight-profit-margin environment, just like cattle feeders, stocker operators and cow-calf producers," Stallman wrote. "However, livestock producers are faced with a rapidly concentrating market as it is. Our farmers and ranchers are questioning the potential for market manipulation and further downward pressure on prices received by the producer."
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