N.D. Stockmen's Association requests oversight
DICKINSON - The North Dakota Stockmen's Association's board of directors at its quarterly meeting on March 12 agreed that recent events in the meat packing industry were cause for concern.
On March 5, JBS, the world's largest meat processor. stated its intent to purchase National Beef and Smithfield Beef Group.
"We've been concerned for probably the last 10 to 15 years about the consolidation of the packing industry and to an extent, the retail industry," NDSA Executive Vice President Wade Moser said.
The board voted to closely monitor the acquisition, which could have serious repercussions on the beef industry, Moser added.
If the deal is approved, JBS and its three remaining competitors will control an estimated 76 percent of the nation's beef slaughter capacity, the NDSA states.
Like most other businesses, however, JBS is subject to antitrust legislation. The Department of Justice's Antitrust Division and the Federal Trade Commission's Bureau of Competition must approve the buyout.
"They need to make sure that this acquisition does not further reduce the competition," Moser said. "If it does, they need to deny the approval of the sale."
Moser feels the regulatory bodies that oversee these buyouts may not have performed the necessary due diligence in the past, and said the NDSA is pushing to make sure it occurs this time.
"We really think that they need to pay attention," Moser said. "And we don't think they have paid enough attention over the last 10 to 15 years."
JBS, a South American company, first expanded its business into the U.S. in 2007 when it acquired Swift and Company, which at the time was the third largest beef producer in the world.
The newly consolidated company is now the largest beef processor in the world.
Moser said often times, the efficiency of these companies is second to none, but, "There comes a time when that efficiency starts to work for the company only and it starts to affect the other businesses in that industry.
The NDSA is continuing to monitor the acquisition and hopes the regulatory bodies do their job.
"That's their job, they know what antitrust is," Moser said. "To guys on the outside it sure looks like they're gobbling up a lot of competition."
Other items discussed at the association meeting included:
-Opposition of the expansion of trade with Argentina due to its incidence of highly contagious foot-an-mouth disease.
-Updates regarding several environmental issues and federal legislation regarding them, such as the National Ambient Air Quality Standards; the Spill Prevention, Control and Countermeasure Rule; the Concentrated Animal Feeding Operation Rules; and bills designed to regulate ammonia and the ozone.
-Recent positive tuberculosis tests in Minnesota in cattle herds, as well as the State Board of Animal Health's new regulations regarding beef imported from Minnesota.
-The North Dakota Legislature's interim work on a bill that would prohibit the sale of hunting rights separate from surface rights.
-The NDSA's recruitment plan for 2008.
-Accepted the retirement of Moser at the end of 2008 and the resignation of NDSA West River fieldman Blaine Northrup of Grassy Butte. Moser will retire after 26 years as the NDSA's executive vice president. Northrup, who has worked for the NDSA for over 15 years, has accepted a lead livestock investigator position with the state of Nevada.
-Selected Mark Huseth of McLeod, N.D., Russ Danielson of Harwood, N.D., and Ed Schafer, originally from Bismarck, N.D., to be recognized as honorary members of the NDSA. Honorary membership is among the highest honors the NDSA bestows.
Huseth is a cow-calf producer and current NDSA president. Danielson is an animal science professor at North Dakota State University and Schafer is the new U.S. secretary of agriculture.
One other major issue discussed during the meeting is the current border dispute among Texas, Arizona, New Mexico and California with Mexico. Texas issued an order on March 4 to not allow cattle coming from Canada to pass into Mexico.
The order came because of Canadian and Mexican officials signing an agreement that allows Canada to trade breeding cattle less than 30 months old. On the other hand, Mexico prohibits imports of U.S. breeding cattle, with the exception of dairy heifers under 24 months of age.
"Mexico is a critical market for U.S. cattle producers, importing about 2.2 million metric tons of beef each year," Moser said. "That's why it is so important to reopen our trade with them and correct the country's trade inequity, which Texas and other states have highlighted in recent weeks."