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NFU wants investigation of Smithfield acquisition
Guest Opinion
WASHINGTON, D.C. — On Sept. 20, the National Farmers Union requested that U.S. Attorney General Alberto Gonzales conduct a Department of Justice comprehensive investigation and analysis of Smithfield Foods Inc.’s announced purchase of Premium Standard Farms. NFU said the move would put both consumers and independent livestock producers at a disadvantage, as it will increase concentration in the livestock industry, while lessening competition.

“The U.S. livestock industry is already heavily concentrated and lacks open and fair competition. That’s bad for independent livestock producers and consumers alike,” NFU President Tom Buis said. “Allowing the two largest hog businesses to join together would only exacerbate an already unacceptable level of concentration where four pork processing firms control 64 percent of the market, up from 37 percent in 1987.” Buis noted that the matter involved not only the pork industry, but also the cattle industry.

“Both Smithfield and Premium Standard Farms also have extraordinary market influence via multiple relationships in the beef industry,” Buis said. “I am convinced that any fair analysis and investigation of these business links will reveal that the proposed sale raises, at the very least, serious concerns about added concentration in the beef and pork industries.”

In NFU’s letter to Gonzalez, Buis said, “I respectfully urge you to undertake a comprehensive investigation and analysis to review the Smithfield/Premium Standard sale, including but not limited to an economic impact on livestock producers and the potential impact on the protein-processing industry.”

“Ensuring that livestock markets operate in a free, fair and transparent manner is critical to our nation’s agriculture economy.

“Without such open and competitive markets, independent producers cannot survive and consumers, ultimately, will lose.” Buis said.

This farm news was published in the Sept. 27, 2006 issue of Farm World, serving Indiana, Ohio, Illinois, Kentucky, Michigan and Tennessee.

9/27/2006