Associated Press
DES MOINES -- Both of Iowa's U.S. senators last week asked federal antitrust officials to oppose the sale of Farmland Industries' pork processing division to rival Smithfield Foods.
"Today's announcement that Smithfield Foods plans to purchase Farmland Foods is bad news for the future of our nation's independent pork producers and for Iowa," Sen. Tom Harkin, D-Iowa, said. "It represents even more economic concentration and vertical integration in an already rapidly consolidating industry."
In a letter sent July 15, Sen. Chuck Grassley, R-Iowa, asked the Antitrust Division at the Department of Justice "to carefully scrutinize this proposal and consider the projected impact on independent producers."
The bankrupt Farmland Industries Inc. announced last week that it has agreed to sell its pork unit -- its remaining major business -- to rival Smithfield Foods for $363.5 million, signaling the end of efforts by the nation's largest agricultural cooperative to rebuild.
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With annual sales of about $1.8 billion, Farmland Foods is the sixth largest pork producer in the nation. Smithfield Foods is the country's largest pork producer and processor.
"Farmland is a significant buyer of hogs, especially in Iowa and the Midwest," said Harkin, ranking Democrat on the Senate Agriculture Committee. "With this move Smithfield is further strengthening its power and leverage over family pork producers."
Grassley has sought to have federal regulators more carefully review agribusiness mergers to ensure competition. "If a Smithfield acquisition of Farmland is allowed, it could shut out the family farmer from fair and open markets. I believe it would have a serious, adverse impact on family farmers and independent producers in Iowa," Grassley said.
