Federal Bill Would Put Moratorium On New Agribusiness Mergers

May 23, 2019

A new federal bill co-sponsored by Montana’s Democratic Senator Jon Tester proposes temporarily stopping large food and agribusiness corporations from consolidating. It aims to increase competition in the market to support better prices for farmers and ranchers.

In the past thirty years, the top four firms in cattle slaughter, pork packing, corn processing, and seed production have come to control between 60 and 85 percent of their markets. A large part of that is due to a trend of corporate consolidation through multi-billion-dollar mergers.

Senator Jon Tester is a co-sponsor of the Booker-Pocan Food and Agribusiness Merger Moratorium and Antitrust Review Act of 2019, which was announced Wednesday.

“Capitalism only works if you have competition,” says Tester.

If passed, the law would halt new mergers for 18 months while a committee assesses how corporate consolidation affects farmers, workers, consumers, and communities. It would only affect food and agribusinesses that annually net more than $160 million. The legislation would also recommend improvements to enforce antitrust laws to protect competitive markets.

“I think most people that are farming and ranching out there are very concerned about the consolidation that has happened over the last many decades with the folks who supply us our inputs and provide us our markets,” Tester says.

Jean Lemire Dahlman, a rancher in Forsyth and a member of the Northern Plains Resource Council, says she supports the bill. She says the top four meatpackers have suppressed prices for ranchers, making it harder for them to stay in business.

“I mean, let’s be frank. They’re bullies," says Lemire Dahlman. "They take advantage of monopolies and have lots and lots of money. It’s our vision at Northern Plains that if we work together and stay on top of everything, we can ultimately win. But we have to pass some legislation.”

Net farm income across the nation has declined by half since 2013, according to the U.S. Department of Agriculture. 

Bill Bullard, CEO of the Ranchers-Cattlemen Action Legal Fund United Stockgrowers of America (R-CALF USA) says his organization supports the bill. The Billings-based non-profit filed a lawsuit in April against the four biggest beef packers. It alleges Tyson Foods, JBS, Cargill and National Beef Packing Company violated U.S. antitrust laws, the Packers and Stockyards Act and the Commodity Exchange Act by unlawfully depressing prices paid to ranchers in order to increase their profits.

“We have been frustrated in the lack of enforcement of our antitrust laws. We have asked the government to enforce those antitrust laws against these big four big packers, and they’ve taken no action,” says Bullard.

Bullard says he supports the merger moratorium bill because it recognizes that big ag has taken control of the industry. He says he expects the four corporations to respond to R-CALF’s lawsuit in mid-June.

Congressman Greg Gianforte says he has not had a chance to read the proposed legislation, but he’s “eager to work with Republicans and Democrats to advance a bipartisan agenda that puts Montana farmers and ranchers first, including ratifying the U.S.-Mexico-Canada Agreement that keeps markets open with Montana’s biggest trading partner.”

Julia Doyle, a spokesperson from Senator Steve Daines’ office says, "Senator Daines looks forward to reviewing the bill. He'll continue pushing to advance trade deals that put Montana farmers, ranchers, and businesses on a level playing field globally."