By Joy Powell, quotes Mary Hendrickson
Minneapolis Star Tribune
March 1, 2005
Online at: http://www.startribune.com/stories/535/5265928.html
Led by Tyson Foods and Cargill Inc., four beef packers now control 83.5 percent of the beef-packing industry, as concentration continues to rise in almost all major agricultural markets, a new study says.
This most likely will lead to higher prices for consumers as prices are set by four or five large companies, said Dave Frederickson, president of the National Farmers Union, which commissioned the report.
"They have been able to document clearly that concentration is causing some huge problems for American agriculture," Frederickson said of the report by Mary Hendrickson and William Heffernan of the University of Missouri at Columbia.
The study indicates that multinational companies, including Arkansas-based Tyson and Minnesota-based Cargill, steadily have increased their stronghold in every major market except ethanol.
"These are the firms that are making the decisions about what food's grown, where it's grown, how it's grown and essentially who's going to get to get to eat it," Hendrickson said. "We've given up decision-making as farmers and as consumers to this integrated global food system."
Four firms, including Hormel Foods Corp. of Austin, Minn., control 64 percent of the pork-packing industry.
In flour milling, the top four millers control 63 percent of the market, led by the Horizon Milling venture formed by Cargill and CHS, followed by Archer Daniels Midland.
In soybean crushing, the top three firms control 71 percent of the market, with Cargill ranking third behind ADM and Bunge. In animal feed plants, the top four companies control 34 percent of the market, with Arden Hills-based Land O'Lakes first, followed by Cargill Animal Nutrition.
Cargill also lists as a leader in turkeys and other areas of the food system. Cargill officials were not available for comment Monday.
Such consolidation threatens the independence of U.S. farmers, according to leaders of National Farmers Union, which on Monday night concluded a four-day convention in Lexington, Ky.
Findings also were significant in U.S. supermarkets.
Wal-Mart Stores, Kroger Co., Albertsons Inc., Safeway Inc. and Ahold USA Inc. controlled 46 percent of U.S. food retailing in 2004.
Hendrickson said the selling of food in the United States long had been competitive until concentration began rising seven years ago.
"Since 1998, we've seen an incredible consolidation among the top retailers -- to the point where you have the top two retailers now selling about 25 percent of the food that moves through supermarkets in this country," she said. "And that's up from the top five selling 27 percent of it in 1997."
Frederickson said the data will be given to Congress in the hopes that lawmakers will pass legislation aimed at restoring balance in the marketplace.