While all our eyes are on a trade war with China, Brazilian behemoth meatpacker JBS is positioned to swoop in and take over U.S. markets with our own bailout money.
This week, as reported in Meatingplace, JBS officials informed the world that JBS is “at the best moment in its history…to capture market opportunities. Exclusive organic growth is no longer a priority.” JBS will grow by taking over other companies, further strengthening its stranglehold on the market.
JBS is taking advantage of the U.S.-China trade war at the expense of U.S. farmers and ranchers. While China has suspended the purchase of U.S. agricultural products, it has turned to JBS’ Brazilian operations to supply its demand. JBS owner Wesley Batista stated that they have secured the ability to launch further acquisitions “mainly to supply the growing demand from China.”
Most outrageous is the fact that JBS has gained this new monopolistic corporate position with the help of the U.S government. Thus far, JBS has received $78 million in pork contracts – that’s 26% of the USDA allocation for pork purchases – through the USDA’s Trade Mitigation Program intended to help U.S. farmers and ranchers hurt by the ongoing trade disputes with China and funded by U.S. taxpayers.
JBS should be thanking you, the American taxpayer, farmer, and rancher for JBS’ historic moment in time, for it is U.S. policies and foreign handouts that has fueled JBS’ opportunity for profiteering and expansion.
JBS is not a newcomer to using government influence to fuel its expansion. In 2017, Joesley Batista, owner of JBS, admitted that without his and his brother Wesley’s illegal activities in Brazil, including bribing over 1,800 Brazilian politicians, they would not have had the ability to take over the U.S. beef market. Through bribes they were able to secure the necessary funds from the Brazilian state-development bank known as BNDES to go on a spending spree buying up 40 rivals on four continents, including the U.S. In 2007 they were able to acquire Swift & Co., and in 2008 they acquired Smithfield Foods’ beef production units and Pilgrim’s Pride’s poultry production units, giving them a dominant U.S. position in both beef and poultry. Since then JBS has acquired Cargill’s pork division, Plumrose USA (bacon, ham and deli meat business), and others. These acquisitions have given JBS control of the U.S. meat market. By the Batistas’ own admission, their market concentration in the beef, pork and poultry industry was gained through unfair and illegal competition.
With the U.S. bailout dollars continuing to flow to JBS, it is becoming more and more evident that JBS has strong influence over our U.S. Department of Agriculture and Secretary Sonny Perdue. Congress shares responsibility for the monopolization of our food and agriculture system in recent decades, and must take action now to pass the Food and Agribusiness Merger Moratorium and Antitrust Review Act and the Buy American Agriculture Act.
The Food and Agribusiness Merger Moratorium and Antitrust Review Act would initiate a moratorium on large agriculture, food and beverage manufacturing and grocery retail mergers to allow time to assess the impact corporate consolidation has on farmers, workers, consumers and communities. It also recommends improvements to antitrust enforcement.
The Buy American Agriculture Act would stop the USDA from lining the pockets of global corporations at the expense of U.S. taxpayers and family farmers. It would require that whenever possible, purchases of agricultural commodities and seafood made by the secretary of the USDA be from domestically owned enterprises. It would also require the secretary to publish the rationale for awarding the purchasing contracts and whether those enterprises are domestically owned.