Wednesday, October 4, 2006
CONTACT: Barry E. Piatt
or Brenden Timpe
PHONE: 202-224-2551
DORGAN CALLS FOR INVESTIGATION INTO PROPOSED MERGER OF TWO PORK INDUSTRY GIANTS
Senator says top four hog processing firms now control 64 percent of market
(WASHINGTON, D.C.) --- U.S. Senator Byron Dorgan (D-ND) called Wednesday for an investigation into the proposed merger of the country’s first and second-largest pork producing firms, saying the top four pork processing firms now control 64 percent of the market and threaten to push independent producers out of business.
In a letter to Attorney General Alberto Gonzales, Dorgan pointed to a recent move by Smithfield Foods, the largest hog processing and producing company in the United States, to acquire Premium Standard Farms, the country’s second-largest hog producer and sixth-largest hog processor.
Dorgan said the merger will further decrease competition in an industry that is already dominated by large firms. The market power of these firms puts independent producers at an unfair disadvantage, he said. In fact, North Dakota has lost 78 percent of its hog operations over the last 15 years as independent producers are forced out of the industry.
“This merger is further evidence that the hog industry is consolidating at the expense of consumers and independent producers,” Dorgan said. “Smithfield Foods will control one-fifth of the hog production and one-third of the hog processing in the United States. This could have a significant impact on markets around the country, and we need a thorough investigation to make sure this acquisition is in the best interest of American consumers.”
Dorgan has long supported efforts to promote competition in the livestock industry, and has pushed to prohibit meat-packer ownership of livestock and the practice of allowing meat-packing firms to use so-called “captive supplies” of livestock to drive down prices on the open market.
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