In a letter sent today, Grassley asked the Antitrust Division at the Department of Justice "to carefully scrutinize this proposal and consider the projected impact on independent producers."
"If a Smithfield acquisition of Farmland is allowed, it could shut out the family farmer from fair and open markets. I believe it would have a serious, adverse impact on family farmers and independent producers in Iowa," Grassley said.
Grassley has aggressively sought to have federal regulators more carefully review agribusiness mergers to ensure competition. He is a senior member of the Judiciary Committee.
Here is Grassley's letter to the Department of Justice, Antitrust Division.
July 15, 2003
R. Hewitt Pate, Esq.
Assistant Attorney General
U.S. Department of Justice - Antitrust Division
950 Pennsylvania Avenue, NW
Washington, DC 20530-0001
Dear Mr. Pate:
I am sure that you are familiar with my concerns regarding increased consolidation in the agricultural sector and its impact on rural America. I have always looked out for family farmers and independent producers to ensure they have fair access to a competitive marketplace. You also may be aware that Iowa is the number one hog producing state in the nation. This status is due to the efficiency and productivity of independent producers operating in open market conditions. However, hog markets are being affected by expanded packer ownership of hogs. Further, issues like exclusive contracting and captive supply are impacting the ability of these producers to compete. More and more of these smaller producers tell me that they are finding themselves shut out of fair and open markets.
Smithfield, Inc. has just announced that it plans to purchase Farmland's hog operations, both among the top hog producing companies in the United States. This acquisition could have a serious adverse impact on hog markets in Iowa. Moreover, Smithfield has made its intention very clear that it plans to continue purchasing its competitors to assert the company's dominance in the pork industry.
I have very strong reservations about this proposed transaction and the continued trend in concentration in the pork industry. I urge the Antitrust Division to carefully scrutinize this proposal, and consider thoroughly the projected impact on independent producers. This is an issue of extreme importance to a vital economic and social mainstay of my state of Iowa and indeed of our nation - the small, independent producer and family farmer. The Antitrust Division must give mergers and acquisitions in agri-business its foremost attention.
I look forward to hearing from you soon about this issue. So you are aware, I plan to speak with Attorney General Ashcroft about my concerns.
Sincerely,
Charles E. Grassley
United States Senator
cc: Attorney General John Ashcroft