February 20, 2009

Big beef merger called off

Montana Attorney General Steve Bullock Friday said it was a big win for family farmers and ranchers when a proposed merger of beef packers was called off.

Bullock, reacting to news that JBS Beef, S.A. had dropped its efforts to acquire National Beef Packing Co., said the merger would have concentrated 80 percent of U.S. packing operations in three companies and led to lower prices paid to cattle producers and higher prices for U.S. beef consumers.

Montana is one of 17 states that joined the U.S. Department of Justice in opposing the merger through a federal lawsuit.

Today's decision is a big win for family farmers and ranchers in Montana, and it will help protect consumers when they buy beef, Bullock said.

However, he said a high level of concentration persists and the marketplace still is not fair for Montana's number one industry, production agriculture.

If the merger had gone through JBS -- based in Brazil -- would have controlled one-third of the U.S.-fed cattle processing market, making it the largest beef processor in the United States, Bullock said. It would also have allowed JBS, Tyson and Cargill to raise prices for processed beef.

Even though this merger isn't moving forward, four companies still control 80 percent of the market, Bullock said. Stopping this was important, but we still have a lot more to do to protect Montana producers and consumers from the effects of market concentration.