USCA Calls for Comprehensive DOJ Review of JBS Swift Acquisitions

USCA, in its comments to Barnett, asked for a thorough economic impact analysis of the proposed mergers.

"There are regions in the U.S. where a single packer controls 100% of the market," wrote USCA. "This merger would exacerbate the situation and will decimate any market competition in these regions. As an example, Smithfield, National Packing and Swift now each have a plant in the Southwest servicing southern California, Arizona, Utah and western New Mexico. If these three companies are allowed to merge, JBS Swift would in effect control the finished cattle market in this geographic area, and there would no longer be a competitive market for producers and feeders to market their finished product."

USCA cited a 2002 Government Accountability Office (GAO) study and a previous investigation by the U.S. Department of Commerce and the U.S. International Trade Commission, which demonstrated that because of meat packing consolidation the four largest packers accounted for 81% of the fed cattle market and the resulting effect forces domestic producers into the position of "price-takers".

"Contrary to what proponents claim, there is no demonstrable evidence that the proposed acquisitions would increase packing efficiency and there is no evidence showing that such a merger would increase competitiveness in the markets for producers," said Jon Wooster, USCA President, San Lucas, California. "It is highly probably that because of this consolidation there will be more geographical areas of the U.S. with only one major packer, thereby eliminating any competitive marketplace. Escalating fuel prices make freight charges into different regions prohibitive for cattle producers, putting them in a position of vulnerability."

"USCA urges the Department of Justice to slow this process down and conduct a full and comprehensive review of the effect and impact of these acquisitions. Most importantly, the industry deserves a full and independent economic impact analysis so that we clearly understand the consequences of increased consolidation in an already-consolidated industry," said Wooster.

Established in March 2007, USCA is committed to assembling a team to concentrate efforts in Washington D.C. to enhance and expand the cattle industry's voice on Capitol Hill. For membership forms and other information visit www.uscattlemen.org.