The Silence of the Lambs
Posted on September 17, 2020
There are many reasons to dislike JBS USA, the world’s—and America’s—largest meatpacker.
In 2017, for example, JBS heirs and bosses, Joesely and Wesley Batista, cut a plea deal to escape prosecution in a bribery scandal that involved an incredible 1,829 politicians in their native Brazil. Both, however, later served six months in jail on other, business-related charges.
The heart of the scandal, according to Brazilian prosecutors, was how JBS used bribes to get huge government-backed loans it then used to buy its way to the top of the global meat heap. That path ran through the U.S. where JBS bought Swift, Smithfield Beef, poultry giant Pilgrim’s Pride, and Cargill’s pork business in a 2007-to-2015 shopping spree.
The Brazilian big-footing worried U.S. farmers and ranchers who were already facing too-few buyers in the fast consolidating meat business. But few in Congress, the Department of Justice (DOJ) or the U.S. Department of Agriculture (USDA) seemed bothered by the Batista boys’ smelly past or JBS’s improbable rise to the top of the U.S. protein pyramid.
And that’s where our public servants remained until a month ago when American lamb producers landed on JBS’s corporate dinner plate.
On July 16, JBS won a bankruptcy auction to purchase a lamb slaughtering plant across the street from one of its cattle plants in Greeley, CO, its U.S. headquarters. Shortly thereafter, JBS announced it would convert the lamb plant to a beef facility to expand its nearby operation.
This small move by JBS (which, ironically, had sold the Greeley lamb plant to a lamb cooperative in 2015) sent Congress into a tizzy, something JBS’s earlier, questionably financed buyouts had never done.
The reason, according to industry experts, was that JBS’s plan to convert the lamb plant to beef would eliminate an estimated 20 percent of U.S. lamb-slaughtering capacity.
As bad as that would be, wrote a dozen U.S. senators and representatives in a July 29 letter to the DOJ, it also meant JBS could “eliminate a major domestic competitor” while replacing “significant quantities of American-raised lamb with import products” because JBS “is the largest importer of lamb in the United States.”
Given JBS’s meat market dominance, it’s troubling that it could seemingly grab the U.S. lamb sector by the throat so easily. A generation ago, one JBS sniff of the U.S. lamb market would have set off antitrust alarms from Washington, D.C. to Washington state.
Equally troubling is what happens when an all-but-certain bottleneck chokes the remaining lamb plants and, consequently, lamb prices collapse. How many lamb feeders will survive that slaughter?
Even more troublesome is that there’s little DOJ and USDA can do because, so far, JBS has not done anything illegal—at least under today’s narrowly defined, rarely enforced antitrust law.
In fact, JBS had every right to bid for the failed Greeley lamb facility. When the court accepted its winning bid, JBS then gained the legal right to do what it wanted with the plant, even remaking it into a beef plant.
Moreover, if the remake boosts JBS’s lamb exports to the American market, it still will have done nothing illegal. That’s just business; that’s the American way.
Which is exactly how Brazil’s JBS became America’s biggest meatpacker and Chinese-owned Smithfield Foods became America’s largest sow owner and hog slaughterer: we let them.
If there’s any crime here it’s how Big Agbiz, Congress, and every White House in memory spent decades undermining federal antitrust enforcement as if it was some antique notion of public fairness that had no role in “modern” global markets dominated by transnational corporations.
As such, a generation of farmer and rancher pleas for government antitrust investigations into meatpackers, seed companies, fertilizer cartels, ag lenders, milk coops, livestock and poultry integrators, grain merchandisers and others fell on deaf ears.
Now, remarkably, those same ears hear the silence of the lambs and the only thing left for them to do is write letters to each other.
© 2020 ag comm