WASHINGTON – Sen. Charles Grassley has asked the Justice Department to investigate the purchase of Cargill’s pork division by JBS USA Pork.
The Iowa Republican questions whether the $1.45 billion deal will restrict competition and leave consumers paying more for pork.
“I urge the antitrust division to thoroughly examine this proposed acquisition to preserve a competitive market in the pork industry,” Grassley wrote to Assistant Attorney General William Baer in a letter dated Monday.
Grassley said he wants to make sure the sale does not “facilitate … anti-competitive and predatory business practices in the industry.” The purchase will consolidate 71 percent of the nation’s pork processing capacity among four companies, he added.
Grassley expressed concern not only for consumers but for farmers’ “marketing options” in his own state which includes a giant Cargill meat processing plant in Ottumwa.
A Cargill spokesman responded to news of Grassley’s request for an investigation with an e-mail statement to the Star Tribune.
“We’ve made the appropriate filings with the U.S. Department of Justice, which is standard procedure for a transaction of this type,” spokesman Michael Martin said. “We look forward to their review.”
When the purchase plans became public in late June, Martin told the Star Tribune that Minnetonka-based Cargill was “not looking to sell our pork business, however JBS approached us with an offer we had to consider.”
According to Grassley: Cargill currently controls 8.4 percent of the nation’s pork processing capacity. JBS controls 11.2 percent. At 19.6 percent, the combined company would rank second in the U.S. to Smithfield Foods, which commands 26 percent.
Most of Cargill’s 5,100 pork processing employees work in the Iowa plant and another in Beardstown, Ill. The two facilities processed 9.3 million hogs in 2014. JBS is also set to get five feed mills and four hog farms from Cargill.
JBS entered the U.S. pork market by acquiring Swift & Co. in 2007. The company has three major pork processing facilities, including a plant in Worthington, Minn.
Staff writer Mike Hughlett contributed to this report.