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WORC: Ranchers want JBS merger stoppedProducers urge Congress to limit large packers' ability to manipulate markets Montana In written testimony submitted May 7, the Western Organization of Resource Councils told a Senate subcommittee that acquisition of two large meatpackers by JBS Swift would mean lower prices paid to cattle feeders and independent producers and that the merger should be stopped. "This merger would further harm price, choice, innovation and competition in the already concentrated beef markets," according to WORC. "If allowed, it will further surrender our nation's food security and market competition to fewer corporations." If the merger succeeds, JBS Swift would be the largest packer in the U.S. and the world. The company would own nearly all of its slaughter capacity through Five Rivers Feeding and would be able to avoid bidding for cattle on the public market. "When the largest packer is not participating in the cash market or bidding for the cattle they need, there is only one result--lower demand and lower prices," WORC noted in its testimony. "When prices are lower for feeders, prices are also lower to cow-calf producers, resulting in the loss of independent producers, damaging rural communities that rely on them." The merger would further consolidate the meatpacking industry. The three largest meatpackers, JBS Swift, Tyson, and Cargill, would control nearly nine of every 10 head slaughtered in this country. WORC urged the Judiciary Committee's Subcommittee on Antitrust, Competition Policy and Consumer Rights to thoroughly investigate the proposed merger and asked Congress to act on market reform proposals. "The threat of this merger, along with the already concentrated packing sector, demonstrates the importance of enacting legislative reforms like the Captive Supply Reform Act sponsored by Sens. Mike Enzi and Conrad Dorgan; the Prohibition of Packer Ownership sponsored by Sens. Charles Grassley and Tim Johnson; and the Agricultural Enhancement Act sponsored by Sens. Herb Kohl and Grassley," according to WORC. Captive supply is: cattle owned or controlled under contract by a packer. The Captive Supply Reform Act would limit meatpacker control of the cattle market by requiring more transparent transactions and firm base prices for cattle supplied under advance contracts. The Prohibition of Packer Ownership proposal would limit packers from owning cattle more than 14 days prior to slaughter. The Agricultural Enhancement Act would set up a special counsel in the U.S. Department of Justice to handle mergers in the agricultural sector. Based in Billings, Mont., WORC is a network of conservation and family agriculture organizations in Colorado, Idaho, Montana, North Dakota, Oregon, South Dakota, and Wyoming. 5/19/08 Date: 5/14/08 Advertisement
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