Last week, I'd read Christopher Vondracek's article in the Star Tribune, DOJ sues data firm, alleging Minnesota meatpackers were 'co-conspirators' in antitrust scheme, with a sense of grim recognition. The lede reminded me of the sort of conditions that gave rise to the Grange and such:
The Department of Justice has sued an Indiana-based meatpacking data firm in federal court in Minnesota, alleging the company allowed the nation's largest meatpacking giants to violate a 130-year-old antitrust law.
In a nearly 70-page lawsuit filed on Sept. 28, federal attorneys charge Agri Stats, Inc., of Fort Wayne, Ind., with an "anticompetitive scheme" enabling processors of chicken, pork and turkey to subscribe to an exclusive service that distributed "unique insights" about their competitors' prices and inventory.
The data that processors received — along with consultant services — helped the meatpackers align prices, drive up meat prices for consumers and generate industry-wide profits. . .
In another strong rural policy story at the Minnesota Reformer, Madison McVan bring that story home, humanizing it with the tale of a farm family from the Cannon Falls area.
Minnesota joins Biden administration push against concentration in agriculture
By Madison McVanMary Lundell has experienced firsthand the changes in the agriculture industry from her 140-acre family farm on the outskirts of Cannon Falls.
Back when her grandfather ran the farm, it was filled with turkey, hogs, cattle and chickens. Now, she and her husband grow only corn and soybeans — the two biggest cash crops in the U.S.
The farm has followed a nationwide trend, becoming more specialized and less diversified. At the same time, Lundell has witnessed another trend in the agriculture industry — increased consolidation.
The local fertilizer company was taken over by Ag Partners, Lundell said. So was the gas company where the Lundells purchase diesel for their farm equipment, and the market where they sell their products.
“All these small little co-ops are gone. It’s now one big company,” Lundell said.
In the meat industry, just four companies exert massive control over slaughter and meat processing, ranging from 53% of chicken processing to 85% of beef.
Lundell and her husband shared their experience Tuesday with Jonathan Kanter, assistant attorney general for the antitrust division in the U.S. Department of Justice. Kanter visited Minnesota this week to speak with Minnesota lawmakers and Attorney General Keith Ellison about antitrust enforcement, a Biden administration priority after decades of a bigger-is-better mentality in D.C.
Minnesota lawmakers increased funding this year for the attorney general’s office to hire additional attorneys and boost antitrust enforcement.
Ellison recently joined 17 other state attorneys general in suing Amazon, alleging the company is a monopoly that uses its power to suppress competition.
“The Minnesota state Legislature has been at the forefront, and innovative in its agenda, with respect to competition and antitrust enforcement,” Kanter said.
Kanter leading major meat industry antitrust case in Minnesota court
Kanter’s division filed a lawsuit last month in the U.S. District Court in Minnesota against Agri-Stats, a data services company that collects and distributes detailed information on meat companies.
Meat processors provide Agri-Stats with sensitive information, including costs, output and prices, according to the complaint. In return, Agri-Stats sent processors “loosely anonymized” reports, which “enables and encourages processors to increase prices and restrict output to boost profits industry-wide.”
In other words, sharing detailed data to fix prices and thereby increase profits, the DOJ alleges.
The DOJ accused companies — including Cargill, Tyson, Butterball, JBS and Sanderson Farms — of using Agri-Stats reports to raise prices, at least in part by restricting the domestic supply of chicken, turkey and pork.
Austin-based companies Hormel and Jennie-O have been Agri-Stats members. JBS, a Brazilian company and another Agri-Stats member, owns a large pork processing plant in Worthington and a poultry plant in Cold Spring through its poultry subsidiary, Pilgrim’s Pride.
Last year, the antitrust division of the DOJ also brought a case against poultry processors for wage suppression. The complaint in the Agri-Stats lawsuit alleges the company distributed detailed compensation and employment information among meat companies, information they could use to suppress wages.
MFU secures authors for antitrust bills next legislative session
Kanter also met with leaders from the Minnesota Farmers Union, which advocates against monopolies and corporate control in the agriculture sector and beyond.
MFU antimonopoly director Justin Stofferahn said the group will advocate for a series of bills in the upcoming legislative session meant to combat corporate concentration in Minnesota.
One would create an “abuse of dominance standard” — in other words, establish a legal definition for market dominance, based on market share or ability to control prices — and prohibit dominant companies or groups of companies from engaging in certain anticompetitive behavior.
Rep. Emma Greenman, DFL-Minneapolis, and Sen. Erin Murphy, DFL-St Paul, agreed to introduce the legislation, MFU spokesperson Janet Kubat said.
Another pair of bills would increase penalties for violations of antitrust laws and update price discrimination language in Minnesota law to match the federal Robinson-Patman Act.
Rep, Steve Elkins, DFL-Bloomington, and Sen. Bonnie Westlin, DFL-Maple Grove, will author those bills, Kubat said.
This Minnesota Reformer article is republished online under Creative Commons license CC BY-NC-ND 4.0.
Photo: Danny Lundell (left) discusses consolidation in agriculture with Jonathan Kanter, assistant attorney general for the antitrust division in the U.S. Department of Justice, at Lundell Family Farms in Cannon Falls on Oct. 24, 2023. Photo by Madison McVan/Minnesota Reformer.
Related posts:
- MN Farmers Union president: A legislative agenda for Minnesota’s family farmer
- Where’s the meat? Solving a bottleneck in the meat supply chain vital to farmers’ profitability
- Wabasso hog farmer & @LSPNow organizer Paul Sobocinski speaks truth to power on PBS
- Paul Sobocinski Star Tribune LTE: Cracks in industrial food system have been there all along
- Session Daily: Struggling farmers could see relief from loan fees with passage of Lippert's HF3739
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- Paul Sobocinski: MN rural reality & factory farms
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