Washington, D.C. -- With regard to efforts by JBS S.A. (JBS) to acquire Pilgrim's Pride Corporation (Pilgrim's Pride), R-CALF USA sent a second submission (see Pages 6 through 9, plus exhibits) of information to the U.S. Department of Justice to reinforce evidence that shows economic harm would hit the U.S. cattle industry if Justice does not block the merger of the competing protein industries (chicken v beef).
The average rule-of-thumb established by a U.S. Department of Agriculture (USDA) review of literature indicates that a 1 percent decrease in poultry prices would reduce beef consumption by 0.24 percent.
For example, R-CALF USA calculated that a 10 percent decrease in poultry prices would decrease the 2008 Nebraska Direct Choice Steer price by $7.15 per hundredweight (cwt) when the farm elasticity of demand for cattle also is considered, representing an $89.38 loss to cattle feeders for each fed steer sold.
R-CALF USA calculated a loss to cattle producers ranging from $7.50 per head to $89.38 per head.
"A loss of anywhere from $7.50 per head to $89.38 per head to the U.S. live cattle industry would have severe ramifications, particularly given the long-run lack of profitability faced by U.S. cattle feeders who have experienced 22 consecutive months of horrendous financial losses," said R-CALF USA CEO Bill Bullard.