Increased monopolization of US food supply
University of Missouri study
by Rocky Mountain Farmers Union
April 18, 2007
(Denver) - Rocky Mountain Farmers Union (RMFU) expressed alarm at the data presented in a University of Missouri study released Monday showing the continuing trend of monopolization of the U.S. food supply. The study, which was commissioned by National Farmers Union, shows that in all areas of food and fuel processing, as well as in food retailing, the big guys are getting bigger while other competitors are losing market share. The only industry bucking this trend is ethanol production.
According to the study, four firms controlled 83.5 percent of all beef processing in 2005, as compared with 72 percent just 15 years ago in 1990. The top four pork processing firms have nearly doubled their market share, increasing from 34 percent of the market in 1989 to 64 percent in 2005. Similar trends were found for poultry processing, animal feed plants, flour milling, and soybean crushing industries.
“The other disturbing aspect to this study is that the same companies that process our food also own a large percentage of the livestock,” said RMFU President Kent Peppler. “This affords these companies tremendous control over both farm prices and consumers’ retail food prices.”
The one industry that is starkly counter to this trend is ethanol production. In 1987, four firms had 73 percent of U.S. ethanol production, whereas by 2002, the top four companies had an ethanol market share of only 49 percent. In 2005, the top four companies had a 31.5 percent share of the market, and independent, farmer-owned ethanol processing plants accounted for 39 percent of U.S. ethanol production.
“The growth of U.S. ethanol processing industries shows that smaller, community-based, farmer-owned companies can compete with multi-national corporations in the processing of agricultural products,” Peppler said. “The success of the homegrown ethanol industry also serves as an indicator of the positive impact that can result from good public policies which promote investment in local economies.”
The University of Missouri study also showed an increase in the retail food industry, with the top five grocery conglomerates controlling 48 percent of the market in 2006. This compares with 24 percent in 1997. With nearly $100 billion in annual sales last year, Walmart accounts for nearly on ein every five consumer food dollars spent. Food retail concentration is also a growing global problem according to figures in the report.
As Congress begins to formulate the 2007 farm bill, RMFU is pushing for the inclusion of a competition title and other policies that will increase competition in U.S. agricultural markets. These include policies such as tax credits for ethanol production and other community level production facilities, as well as programs that encourage development of value-added cooperatives, food that is directly marketed to consumers, and other local business opportunities. RMFU also advocates enforcement of current anti-trust laws and implementation of mandatory country-of-origin food labeling contained in the 2002 farm bill.
Rocky Mountain Farmers Union is a general farm organization representing 25,000 families in Colorado, Wyoming and New Mexico.
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