By Mark Zdechlik
April 16, 1999
This weekend a top official from the U.S. Department of
Justice will be in the Twin Cities to hear from farmers concerned about
dropping prices and growing consolidation in agri-business. Many farmers
struggling to get by, suspect one reason the prices they're being offered for
their crops and livestock are so low is because there are fewer companies
competing for their business.
MINNESOTA-BASED CARGILL'S PROPOSED ACQUISITION of the grain-trading interests
of one of its major competitors - Continental Grain of New York - has become
something of a poster child in the debate over agri-business consolidation.
Critics, including Senator Paul Wellstone, say the arrangement, would give Cargill
control of a third of all U.S. grain exports. Cargill says to function in a world
market that's no longer controlled by a handful of central governments, agri-businesses need more resources on both the production and marketing sides.
Cargill spokeswoman Linda Thrane says selling grain now is much more
complicated than it was 5 global markets developed.
Thrane says when struggling global markets recover, U.S. farmers now suffering
from low commodity prices , will benefit from the turnaround. And Thrane says
having the option of marketing their products through companies like
Cargill to a variety of customers all over the world will net farmers the best
prices.
University of Minnesota Applied Economics Assistant Professor Brian Buhr says the notion growing agri-business giants are to blame for the erosion
of commodity prices is simplistic. Buhr says while some U.S. industries are
dominated by just a few companies, agri-business remains extremely
competitive despite the wave of mergers.