Merger of Sanderson Farms and Cargill is a bad deal for farmers and consumers

Why conspire with your competitors when you can just merge?

Over the last two years, giant corporate meat companies have been settling lawsuits to the tune of hundreds of millions of dollars that allege they conspired with each other to fix prices, lower workers’ and farmers’ pay and raise the price of meat for both wholesale and retail customers.

On July 22, Cargill and Continental Grain Co. announced the completion of their acquisition of Sanderson Farms. In 2021, Missouri Rural Crisis Center (MRCC) co-wrote a letter to the U.S. Department of Justice urging them to vigorously scrutinize the mega merger of Sanderson Farms, Cargill, Continental Grain and Wayne Farms.

Sanderson Farms is currently the third largest broiler chicken company in the U.S. It operates a poultry processing plant in Moultrie and a hatchery in Adel. Broilers are Georgia’s top agricultural product.

Wayne Farms (owned by Continental Grain Company) is the seventh largest. This merger will increase the market share of the top three processors from 46% to 51% and create a firm with approximately 15% of the U.S. broiler chicken market.

The growing level of consolidation in industries like the broiler chicken industry creates more opportunities for companies to conspire with each other to interfere with the market. Deals like these lead to increased market share for fewer companies, and the opportunity for anticompetitive practices increases.

Also, this merger could (read: will) negatively impact grain farmers by eliminating a major grain buyer from the market. Instead of Sanderson buying grain from the open market as they do now, they will now be combined with Cargill, one of the biggest grain distributors in the world.

For decades, MRCC members, farmers and consumers across our country have been sounding the alarm of the negative impacts of mergers like these that put independent livestock producers out of business, allow corporations to charge consumers more, extract wealth from our communities, pollute our land, water and air and weaken our national security.

This commentary first appeared in the Missouri Independent, a Georgia Recorder States Newsroom sibling outlet.