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NFU: Study Shows Ag Market Concentration Increasing

by 5m Editor
17 April 2007, at 10:51am

US - Agricultural market concentration is rising steadily, according to a study released today by National Farmers Union.

NFU released the findings of a NFU-commissioned study conducted by Drs. Mary Hendrickson and William Heffernan of the University of Missouri on the concentration of agricultural markets. The statistics revealed increased concentration in every industry except ethanol production.

The NFU study documents that the top four beef packers dominate 83.5 percent of the market, four pork packers control 66 percent of that market and the top four poultry companies process 58.5 percent of the broilers in the United States. Tyson Foods is listed in the top four of each of these categories. The retailing industry has been gradually increasing its degree of concentration, with the top five companies controlling 48 percent of U.S. food retailing, compared to 24 percent a decade ago.

“This study supports what we have long known,” NFU President Tom Buis said. “In the absence of public policy intervention, consolidated and non-competitive markets flourish, while independent family farmers disappear. Congress must take action to restore competition in the marketplace. The 2007 Farm Bill is the perfect opportunity to make that happen.”

The study also found that ethanol production is the only agricultural sector in which concentration has steadily decreased. Today, the top four companies control 31.5 percent of the marketplace. In 1987 the top four companies owned 73 percent. Farmer owned ethanol plans account for 39 percent of total capacity.

“Renewable fuels is one of the most exciting areas of agriculture and is a clear example of the impact and potential for public policies that encourage competition and reward local ownership,” Buis said. “It is important to continue this trend for ethanol but also expand rural ownership to our other agriculture-related sectors.”

Buis will testify before the House Agriculture Subcommittee on Livestock, Dairy and Poultry, chaired by Rep. Leonard Boswell, D-Iowa, at a Tuesday hearing to discuss market concentration.

To see the full report of Concentration Of Agricultural Markets - April 2007, click here.

5m Editor