Sen. Chuck Grassley of Iowa sent a letter yesterday to the Department of Justice pressing the Antitrust Division to review JBS USA’s proposed acquisition of Cargill Inc.’s pork unit.
Grassley expressed concern that the deal will increase concentration and decrease competition in the U.S. pork industry.
If the JBS-Cargill deal is finalized, the four largest pork processors will control roughly 71% of the processing capacity in the country. Continued mergers and acquisitions in an already consolidated pork industry could reduce competition. "Reduced marketing opportunities for farmers and independent producers, and the subsequent impact it could have on pork prices for consumers is of great concern,” Grassley said.
JBS USA and Cargill Inc. are currently the third and fourth largest U.S. pork processors respectively. If the transaction is finalized, JBS USA will become the second largest pork processor with a daily slaughter capacity of around 83,000 head. This equates to nearly 20% of U.S. daily pork processing capacity.
Grassley has long worked to ensure such mergers are carefully reviewed by the Justice Department to ensure a competitive market. This transaction, reportedly valued at $1.45 billion, comes almost one year after Tyson Foods purchased Hillshire Farms.
JBS USA has a plant located in Marshalltown, Iowa, and Cargill Inc. has a plant located in Ottumwa, Iowa.
A signed copy of Grassley’s letter to the Department of Justice can be found here.
