NAFB Interview – by NAFB D.C. Correspondent Stewart Doan – Monday – October 20, 2008

R-CALF Pleased with DOJ Action

Audio with R-CALF USA CEO Bill Bullard.

Suggested Lead: By blocking JBS Swift’s acquisition of National Beef Packing Company - R-CALF USA CEO Bill Bullard says the Justice Department acted in the best interest of the U.S. cattle industry...tape

Cut #1      :27           O.C..."today's action."

“We were tremendously pleased that the Justice Department and 13 states have joined together to protect the interests of both cattle producers and consumers. In essence, to protect the competitiveness of the cattle industry, and they’ve recognized that the ongoing mergers and acquisitions in our industry have really threatened the competitiveness of the industry itself, so we are greatly pleased with today’s action.”

The Justice Department said Monday that the proposed deal would combine two of the top four U.S. beef packers resulting in lower prices paid to cattle suppliers and higher beef prices for consumers.  The department decided not to challenge JBS's proposed purchase of Smithfield Beef Group, the nation's fifth-largest beef packer, or Five Rivers Ranch Cattle Feeding, the nation’s largest feedlot.

 

R-CALF actively opposed the transaction from the start. Bullard applauded the thoroughness of DOJ’s anti-trust review...tape

Cut #2      :44        O.C..."the current situation.”

 

“The answer is education, and that is what R-CALF’s role was in this entire process, was to educate the Department of Justice and the states on the unique marketing characteristics of our industry, demonstrating how this proposed merger would be detrimental to the U.S. cattle industry. In addition, what helped swing the balance was the fact that we had several of our members that were cattle feeders and cattle producers interviewed by the Department of Justice, so they were able to learn firsthand in these interviews how our marketplace is already subjected to diminished competition and how this merger would greatly worsen the current situation.”

 

Bullard says R-CALF is deciding whether to challenge DOJ’s approval of the Smithfield and Five Rivers buyouts...tape

Cut #3       :29            O.C..."block the JBS merger.”

 

“We are hopeful that they would’ve blocked the entire merger, rather than just the concentration – or horizontal merger component. They did not get blocked the vertical integration component, where you have JBS purchasing the nation’s largest feedlot corporation, so we’re still working to figure out how to include the vertical integration component in this action to block the JBS merger.”

 

According to R-CALF’s Bullard - the DOJ’s ruling sends a clear message that the beef industry won’t follow the same structural path as the vertically-integrated pork and poultry sectors.

 

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