There will be “serious potential damage” to the US beef industry if Brazilian group JBS is allowed to seal its two planned acquisitions in the sector, local cattle producers have claimed.


Earlier this month, JBS struck deals to buy two beef businesses in the US for a total of US$1.2bn.


The planned acquisitions of Smithfield Foods’ beef operations and National Beef Packing Co., the fourth-largest beef processor in the US, have angered some local cattle producers and politicians.


A group of US politicians have written to the Justice Department to campaign against the deals. “We are concerned that this purchase would reduce competition and live cattle prices in the US cattle and beef industry by further limiting market choices and access for independent beef producers,” the letter stated.


“There are strong antitrust implications to this acquisition, and we recommend that the US Department of Justice thoroughly investigate the possible consequences that will result from this merger.”

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Allowing three of the top five largest beef processors in the US to consolidate would be devastate the cattle market, the letter said.


“By limiting access to beef producers, independent producers will only have ready access to one beef process and will confront unfavourable pricing due to the captive supply of cattle.”


Industry body R-CALF USA said giving JBS the green light to close the acquisitions would “destroy competition” in the sector.


“Anyone who’s independent in the cattle industry should be paying close attention to this and calling their Senators and Representatives to oppose a Brazilian-owned firm becoming the largest meatpacker in the United States,” R-CALF USA marketing committee co-chair Dennis Thornsberry said.


“If we don’t stop this merger, I think we’re headed to where the poultry and hog industries are now – where the producers are just contract growers.”

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