Recent Acquisitions of U.S. Meat Companies (CRS Report for Congress)
| Release Date |
Revised March 10, 2009 |
| Report Number |
RS22980 |
| Report Type |
Report |
| Authors |
Renee Johnson, Specialist in Agricultural Policy |
| Source Agency |
Congressional Research Service |
| Older Revisions |
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Summary:
In July 2007, JBS-a Brazilian company regarded as the world's largest meat processor-purchased the U.S. beef processor Swift & Co., then the third-largest U.S. beef processingcompany. In February and March 2008, JBS signed agreements to acquire the fourth- and fifth-largestU.S. beef packers, National Beef Packing Company and the Smithfield Beef Group,respectively. These planned acquisitions have undergone customary regulatory review by the U.S.Department of Justice's (DOJ's) Antitrust Division.On October 20, 2008, DOJ and 13 states filed a complaint in U.S. District Court to block the JBSbuyout of National Beef Packing Company, citing concerns that it could contribute to higherconsumer prices and also lower producer prices. That same day DOJ announced it would notchallenge the JBS acquisition of Smithfield Beef Group, and JBS subsequently acquired thisbusiness. The proposed JBS acquisition of Five Rivers Ranch Cattle Feeding, which was part ofthe Smithfield deal, also took place, making JBS the largest cattle feeder in the United States.Some in Congress publicly applauded DOJ's lawsuit to block the JBS buyout of National BeefPacking Company. Opinion within the U.S. meat industry was mixed. Some were concerned thatif JBS were to acquire National Beef in addition to Smithfield, this would make JBS the largestU.S. beef producer, with a combined share of about 30% of the U.S. commercial cattle slaughtermarket (assuming it did not divest some facilities).In February 2009, discussions between JBS and DOJ broke down and JBS decided not topurchase National Beef Packing Company.
