It's no secret that the U.S. meat industry -- not long ago made up of a patchwork of small- and medium-sized family farms -- is now dominated by a handful of agribusiness goliaths.
One of the biggest is Smithfield Foods, the nation's biggest pork company, which over the last year has embarked on a merger spree, seizing greater and greater shares of the market. And the latest news is that they plan to grow even more:
[Smithfield] said Monday it has agreed to buy Kansas City-based Premium Standard Farms -- the country's second largest pork producer and sixth-largest pork processor -- for $674 million in cash and stock, plus the assumption of $117 million in Premium Standard's debt. [...]
The deal means that Smithfield -- already by far the largest hog producer and processor -- will become even larger. Before the purchase, Smithfield had 52,500 employees at various locations, including thousands in Smithfield. The company did $11.4 billion in annual sales of pork, beef and poultry in its last fiscal year.
The purchase is only the latest in a continuing slew or purchases by Smithfield. In July, Smithfield bought out the branded meats business of ConAgra Foods -- including ConAgra's famous Butterball brand -- in time for the holidays. In June it acquired Sara Lee's European meats division.
The deal is so big -- and Smithfield's potential meat empire so vast -- that the story quotes a Prudential analyst as saying "there's less than a 60 percent probability the deal will go through" on anti-trust grounds.
If the merger does happen (target date: early 2007), what will it mean for the public? After noting the dangers to consumers from price-fixing, a New York Times editorial spells out the consequences for rural America:
There is little or no role for the independent farmer in this landscape. The logic is simple: Why bother to buy pigs from farmers when you can own them yourself? If this deal closes, more than half the pigs Smithfield kills would be pigs it already owns, a percentage that is sure to increase. The hog farmers' job would no longer be farming. They would be janitors in confinement barns across rural America where the packers' huge herds of pigs are crammed in stalls to live out their short lives.
[T]hat would be the ultimate efficiency of American agriculture - doing away with the farmer by doing away with competitive markets.
Meanwhile, workers at Smithfield -- especially its main plant in southeast North Carolina -- continue to speak out and organize to change plant conditions that have made the company a poster child for labor rights violations (pdf). Workers and their allies will be rallying at Smithfield Corporate headquarters in New York City tomorrow, where the city council is also considering a resolution against the corporation:
Civil rights, faith, immigrant rights and labor leaders will gather in front of the Smithfield Corporate offices at 499 Park Avenue on Friday, September 29 to protest the company's widespread abuse of workers and its failure to recognize their desire to join a union.
Smithfield Packing is the target of a growing national consumer campaign because of its abusive treatment of the over 5,500 predominantly Latino and African-American workers at its Tar Heel, North Carolina plant where workers have been fighting to organize a union for over 12 years. New York City is one of the company's largest markets. The city council will consider a resolution at its next meeting in October, introduced by Councilman Miguel Martinez, to stop purchases of pork products from the plant in Tar Heel, North Carolina. The bill will also urge supermarkets in the city to no longer stock the product.