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The Billings Gazette – Top
Story/Local Section – Tuesday – January 6, 2009
(quotes R-CALF
USA CEO Bill Bullard)
Cattle group seeks
concessions from packer
By TOM LUTEY
Of The Gazette Staff
A Billings-based cattle group is
calling on the world's largest meatpacker to surrender its Western feedlots as
part of a settlement agreement with state and federal antitrust lawyers.
Ranchers-Cattlemen Action Legal Fund USA contends that getting Brazilian based
JBS S.A. to surrender its feedlots is crucial to Montana cow-calf operations,
which are faced with fewer buyers and less competition for their product.
"Our position is that the market is already too highly concentrated," said Bill
Bullard, R-CALF chief executive. R-CALF sued JBS last year over its would-be
purchase of Kansas City, Mo.-based National Beef Packing Co.
JBS has been on a two-year buying spree of U.S. meatpackers, picking up
Colorado-based Swift & Co. in 2007 and Smithfield Beef Group last fall. The
National Beef purchase would make JBS the largest beef packer in the United
States and would trim the number of major packing companies from five to three.
Higher consumer
prices?
State and federal antitrust lawyers
saw the National Beef purchase as a recipe for higher consumer prices and lower
payouts to ranchers. The governments sued JBS and National Beef last year to
stop the sale. But all parties agreed in mid-December to set aside litigation
and work out a settlement.
The first signs of an agreement between the governments and JBS allowing the
sale could come Jan. 16 at a status hearing in Chicago, a U.S. Justice
Department spokeswoman said. JBS did not return messages left with the company
Monday.
Early indications were that National Beef might cut one of its packing plants
out of the deal to shrink JBS's footprint in the U.S. beef industry. Bullard
said R-CALF's concern is that any packing plant cut from the deal wouldn't
really stimulate market competition. More than 80 percent of the country's beef
industry would still be controlled by JBS, Tyson Foods and Cargill. The cast-off
packing plant might not even survive, Bullard said.
Group wants sale
restrictions
R-CALF is
requesting that JBS not be allowed to expand in the Southwest and High Plains
markets. The group wants sale restrictions that benefit small packing firms. And
it wants JBS to give up Five Rivers Ranch Cattle Feeding, a collection of
Western feedlots that buy feeder cattle from several states, including Montana.
The feedlots in Texas, Kansas, Idaho and Colorado handle about 800,000 cattle at
a time.
Colorado feedlots are crucial to Montana's cattle industry, which exports
900,000 feeder cattle to feedlots annually for fattening.
Montana is a plaintiff in the lawsuit against JBS. Newly elected Attorney
General Steve Bullock, sworn into office Monday, is aware of the lawsuit and
what it means to Montanans.
"We're working to make sure that this case is resolved in a way that preserves
the benefits of competition for both Montana ranchers and consumers," said Judy
Beck, a state Justice Department spokeswoman.
http://www.billingsgazette.net/articles/2009/01/06/news/local/28-thejungle.txt
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