NFU President Statement on Smithfield Acquisition Investigation

by 5m Editor
7 November 2006, at 12:52pm

US - National Farmers Union President Tom Buis made the following statement after the Department of Justice announced its plan to make additional inquiries regarding the Smithfield-Premium Standard Farms merger.

“I am pleased the Department of Justice is thoroughly considering the Smithfield purchase of Premium Standard Farms and that the Department has announced that they are making a second request for information on this matter. NFU continues to stress that inadequate market competition is one of the most pressing issues facing producers across the country.

“If approved, Smithfield’s sow inventory will top one million. In less than 10 years, this single company has increased its sow ownership twelve-fold through acquisitions and mergers, such as the proposed Premium Standard Farms deal. If approved, Smithfield will own nearly 20 percent of U.S. hogs and increase its hog processing capacity to 31 percent. The concentration ratio of the top four pork production firms will increase from its already-overwhelming 49 percent.

“In 1980, the number of U.S. farms with hogs totaled 667,000; today that number has dwindled to 67,000. Operations with at least 10,000 hogs now represent less than one percent of all hog producers, yet account for more than half of total U.S. hog production.

“The economic impact felt throughout our rural communities when independent hog producers are forced out of business is overwhelmingly negative. Competitive markets provide independent producers an opportunity to get a fair return for their commodities.

“NFU looks forward to working to ensure independent livestock producers are not negatively impacted by inappropriate concentration.”

ThePigSite News Desk

5m Editor