Agriculture Antitrust News Roundup

Photo courtesy of iStock

March has been a busy month for agriculture antimonopoly news. From new antitrust investigations to global supply chain disruptions, Food & Power put together a roundup of the latest happenings:

The Justice Department opens an investigation into wage fixing by poultry companies. In 2019, a class-action lawsuit alleged that the country’s largest poultry processors met annually off the books at an industry conference to share information about how much they were paying plant workers and conspire to suppress wages across the industry. Federal antitrust enforcers recently opened their own similar investigation, according to annual security filings by Pilgrim’s Pride and reporting by the Wall Street Journal. In public guidance the DOJ has said that sharing information about terms and conditions of employment with competitors can constitute a civil antitrust violation even without an explicit conspiracy agreement.

Poultry executive price-fixing trial continues. Ten poultry executives are standing trial again after jurors failed to reach a verdict last December in a price-fixing case brought by the DOJ. Poultry executives face criminal charges for allegedly sharing pricing and bidding information to raise chicken prices, following a federal investigation and guilty plea by Pilgrim’s Pride. At issue is whether or not executives engaged in an intentional conspiracy to fix prices, or merely shared pricing information, which the defense maintains is not illegal.

Sen. Elizabeth Warren and Rep. Mondaire Jones introduce bill to block large mergers. The Prohibiting Anticompetitive Mergers Act, introduced Wednesday, would ban any mergers that give one firm a 33% share of the market or 25% share of its relevant labor market. It would also make deals worth more than $5 million illegal, make it easier for antitrust enforcers to block mergers, and require enforcers to consider harms to workers when evaluating a merger. The bill also establishes processes for reviewing and breaking up past harmful mergers, including mandatory breakups of any merger since 2000 that resulted in a 50% market share or “brought material harm to the competitive process.”  

Poultry tournament system rules sit with the Office of Management and Budget. Last month the U.S. Department of Agriculture submitted a proposed rule to the OMB titled “Transparency in Poultry Grower Contracting and Tournaments.” This would be the first of three promised rules to update and strengthen enforcement of the Packers & Stockyards Act, which sets fair terms of trade in the meatpacking industry. This forthcoming rule will regulate tournament payment systems, which rank poultry growers against their peers and gives bonuses to well-performing growers at the expense of under-performing growers, who receive pay cuts. The payment system has been criticized for unfairly cutting farmers’ pay based on minute factors that can be out of their control.

USDA is studying consolidation in fertilizer, seeds, and food retail markets and wants public input. The agency will open a request this week soliciting information to address rising concerns about fertilizer prices and fulfill outstanding research goals. As a part of President Joe Biden’s July executive order, USDA needs to publish reports on the harms of consolidation and exclusionary or predatory conduct in food retailing and on solutions to ensure patents and other intellectual property tools do not reduce competition for seeds and other farm inputs.

As if on cue, Yale Law School hosted a conference Saturday on antimonopoly issues in food retail. The daylong event featured 20 presentations, including one by Food & Power’s Claire Kelloway, on topics such as the harms of slotting fees and category captain arrangements, deed covenants blocking grocery store construction, inadequate disclosure of conflicts of interest in agriculture economics studies, and the role of cooperative or public food markets. A conference compendium of final papers is forthcoming.

Farmers and repair advocates ask the Federal Trade Commission to challenge Deere’s repair monopoly. In a 43-page complaint, the National Farmers Union, six state-level Farmers Unions, and other farm or repair nonprofits charged John Deere with restricting repair of its equipment and violating antitrust laws. By withholding access to essential repair software and tools, Deere prevents farmers from repairing tractors or working with independent repair shops, driving up costs and wait times, the complaint argues.

War in Ukraine threatens global wheat supplies. Russia and Ukraine are leading world producers of wheat, corn, and sunflower oil. Put together the International Food Policy Research Institute estimated that their food exports make up 12% of all food calories traded in the world. Between sanctions against Russia and Ukraine’s decision to halt major food exports, wheat and other agriculture commodity prices are expected to rise above already historic levels. Trade disruptions and rising prices will particularly hurt countries in the Middle East and North Africa that import the bulk of their wheat from Ukraine. Unregulated speculation by financial institutions in commodity markets could exacerbate the situation, according to the Institute for Agriculture and Trade Policy. Relatedly, Russia also controls significant portions of the fertilizer supply chain, raising further concerns about how war will disrupt the global food supply.