Chris Rizo Apr. 17, 2008, 6:38pm
JEFFERSON CITY, Mo. (Legal Newsline)-Missouri Attorney General Jay Nixon is asking the federal government to either halt or modify a Brazilian company's acquisition of three of the largest meat-packing companies in the United States.
JBS S.A. is seeking to acquire meat-packers National Beef and Smithfield Beef, and feedlot operation Five Rivers Cattle Feeding LLC.
Missouri is one of the nation's largest beef-producing states.
"Beef is a key contributor to our state's status as an agricultural powerhouse," Nixon said in a statement. "This significant elimination of competition among the packing companies that buy beef would hit our farmers and ranchers at a time when they are already facing crippling increases in the cost of feed and fuel."
"I'm asking the Department of Justice to step in to help protect Missouri agriculture and consumers," he added.
In a letter Tuesday to U.S. Attorney General Michael Mukasey, asking him to consider closely the proposed acquisitions, Nixon noted that a reduction in competition among U.S. meat-packers would harm beef producers in Missouri.
By owning the cattle it slaughters, JBS would pay less for live cattle from Missouri beef producers and then be able to charge more for the beef, Nixon argued in his letter to Mukasey.
"We have observed this phenomenon in the pork industry, as consolidation has driven farm and retail prices in opposite directions," Nixon wrote.
"Allowing vertical integration in the beef industry almost certainly will produce the same unsettling result," he added.
JBS recently purchased Swift & Company, another large U.S. meatpacking company.
From Legal Newsline: Reach reporter Chris Rizo by e-mail at firstname.lastname@example.org.