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Group Urges Justice Department to Block JBS/Pilgrim's Pride Merger

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Billings, Mont. -- In an effort to protect and preserve a competitive market for independent U.S. cattle producers, R-CALFUSA this week sent a letter to the U.S. Department of Justice requesting that it block the proposed merger of Brazilian-owned JBS S.A. (JBS) and Pilgrim's Pride Corporation (Pilgrim's Pride).

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JBS is the largest beef packer in the world and has rapidly been expanding globally, as well as in the United States, in the past several years. In 2007, JBS purchased Swift & Co., then the nation's third-largest beef packer. In 2008, JBS purchased Smithfield Beef Group and attempted to purchase National Beef Packing Co. In 2008, the Justice Department found the acquisition of National Beef Packing Co. would lessen competition among packers in their purchase of cattle, which is critical to ensure competitive prices for the nation's hundreds of thousands of ranchers. R-CALFUSA contends that the proposed acquisition by JBS of Pilgrim's Pride would create the same problem.

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"The demand and price for cattle is influenced by the supply and price of competing proteins such as pork and poultry, and prices received by R-CALFUSA members for their cattle are particularly susceptible to increased poultry supplies," said R-CALFUSA CEO Bill Bullard. "We estimate that JBS' share of fed cattle packing capacity in the U.S. is now over 25 percent, and with the acquisition of the vertically integrated Pilgrim's Pride -- which controls over 20 percent of U.S. poultry production -- JBS could further manipulate the competing protein market in the United States."

Concerns expressed about the proposed acquisition of JBS' protein product competitor -- Pilgrim's Pride -- include the likelihood that JBS would secure the means to manipulate both live cattle and beef prices by varying the output of the Pilgrim's Pride poultry operation and the price of its poultry.

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R-CALF USA, Ranchers-Cattlemen Action Legal Fund, United Stockgrowers of America, represents thousands of U.S. cattle producers on domestic and international trade and marketing issues. R-CALF USA, a national, non-profit organization, is dedicated (more...)

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