The Department of Justice (DOJ) and the Wyoming Attorney General have filed a suit to block the merger between JBS and National Beef Company. They were joined by the Attorney’s General from twelve other states.
Wyoming Senators Enzi and Barrasso urged the U.S. Attorney General in a March 14 letter to review the merger and its impact on Wyoming. The Senators pointed out the importance of open competition in cattle markets to Wyoming ranchers.
“Competition must remain in the meat packing business in order for Wyoming ranchers to receive a fair price for their animals. I am pleased the Justice Department scrutinized this merger closely because a competitive market is vital to the success of Wyoming ranchers,” Senator Enzi said.
“The Department of Justice heeded our warning. Competitiveness in this sector is vitally important to beef and lamb producers across the country, especially here in Wyoming. It’s simply bad economics for one or two corporations to control any market, especially the livestock market. A bad merger would negatively impact everyone from the ranch to the grocery store aisle,” Senator Barrasso said.
Decreasing the number of companies competing for livestock auctions would potentially depress prices.
This move by the Department of Justice and the 13 Attorney’s General would help protect producers from potential anti-competitive practices and promote healthy markets. This decision could lead to more marketing opportunities for cattle and sheep producers.
Background
In March 2008, JBS S.A. announced plans to buy National Beef Co. and Smithfield Beef Group. This would merge of three of the five packing companies controlling the U.S. beef market. The only remaining national competition would be between JBS, Tyson Foods and Cargill Inc. Under the proposed merger, JBS would become the largest meat packer and the largest cattle feeder in the world. Their assets would include beef and lamb plants in Greeley, Colorado and other packing houses that routinely buy cattle and sheep from Wyoming.
