Harkin Wants Smithfield-Murphy Merger Probed

September 7, 1999

Sen. Tom Harkin (D-IA) wants the Justice Department "to give the most stringent scrutiny" to Smithfield Food's proposed acquisition of Murphy Family Farms. "The sheer magnitude of this acquisition should raise serious antitrust concerns," says Harkin.

"The proposed Smithfield-Murphy merger has caused great concern in the agriculture and agribusiness sectors," Harkin said in a letter to Assistant Attorney General for Antitrust Joel Klein. "The potential market effects of one company being the top hog producer and processor are enormous."

However, it is estimated that the merged companies will control about 12% of the domestic pork trade, a market share likely not to trigger antitrust concerns. Tyson Foods, for example, controls about 30% of the poultry business.

Harkin and Sen. Charles Grassley (R-IA) host a conference today in Cedar Rapids, IA, on concentration and consolidation in agriculture. USDA Under Secretary Mike Dunn and Klein will attend the conference.

"It is mergers like this and that between Cargill and Continental that have prompted tremendous concerns about economic concentration in agriculture," says Harkin. "USDA and the Department of Justice must understand that this merger will result in a less competitive market for hog producers...The stakes are tremendously high for consumers, pork producers, other pork processors and our economy as a whole."

Smithfield's acquisition of Murphy "sends the clear message to pork producers that they must find more effective ways to manage risk while sharing in the end value of their products," said John McNutt, president, National Pork Producers Council. NPPC believes niche marketing, producer cooperatives "and other such alignments are examples of the literally thousands of relationships that offer meaningful opportunities for future success for pork producers."