Concentration growing in ag markets

Cattle Market & Farm Reports, Editorials
Mar 7, 2005
by WLJ
Concentration in agricultural markets continues to rise according to statistics released Feb. 25 by National Farmers Union during its 103rd anniversary convention in Lexington, KY.
An NFU-commissioned study conducted by Mary Hendrickson and William Heffernan from the University of Missouri Department of Rural Sociology revealed that the top four firms in most agricultural sectors have increased their stronghold since the last study, released in 2002.
The study showed the top four beef packers now dominate 83.5 percent of the market. Four pork packers control 64 percent of that market, and the top four poultry companies process 56 percent of the broilers in the United States. Tyson Foods is listed in the top two of all three industries.
“These concentration percentages are significant in themselves,” said NFU President Dave Frederickson. “Yet, when analyzed as part of the complex web of integration among the top firms, the percentage of market control becomes staggering.”
Frederickson said that ethanol production was the only agricultural sector in which concentration has steadily decreased. A decade ago, the top four companies owned 73 percent of the ethanol market. Today, the top four companies control 41 percent of the ethanol produced.
The Farmers Union president said this was in direct relationship to the high number of farmer-owned ethanol cooperatives that have been built in the United States. Farmer-owned plants account for about 1.3 billion gallons of ethanol production per year, or 37 percent of the total capacity.
“Ethanol is a prime example of the impact of and potential for public policies that encourage diversification and discourage monopolization in our food system,” Frederickson said. “The 109th Congress must work to address the growing market control that threatens our nation's family farm system of agriculture.”
Frederickson said the information revealed in the new study provides further rationale for Congress to immediately pass legislation to restore true competition in the marketplace for U.S. farmers and ranchers.
“Independent producers cannot succeed in the absence of protection from unfair and anti-competitive practices,” he said. “We need comprehensive agricultural competition and concentration policies to restore balance in the marketplace.”
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