A cattle producers' lobbying group is criticizing the U.S. Department of Justice for not blocking a proposed merger of the world's largest beef producer and North America's second-largest chicken processor.
"We think the Justice Department completely ignored the buying power JBS could have in controlling significant portions of poultry and beef supplies," said Bill Bullard, CEO of Montana-based R-CALF. "That gives them tremendous leverage over the prices they pay for beef and poultry. Studies have shown that, as poultry prices decrease, so, too, does beef consumption."
But the editor of a national cattle-buyers publication says the acquisition of Pilgrim's Pride Corp. by Brazil-based JBS S.A. would not be a bad deal for American cattle producers or beef and poultry consumers.
"I don't think there's any correlation in (JBS') owning of a poultry company and there being any effect on the beef cattle industry," counters Steve Kay, editor of California-based Cattle Buyers Weekly. "I think JBS will remain an even stronger cattle buyer going forward."
The Justice Department had started an investigation in September into possible anti-trust violations by the proposed Pilgrim's Pride acquisition but notified JBS in October that it was terminating its investigation.
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