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NFU Testifies on Effects of Concentration on U.S. Food Supply
North Dakota Ag Connection - 01/21/2022

This week, the House Judiciary Committee, Antitrust Subcommittee held a hearing on "Addressing the Effects of Economic Concentration on America's Food Supply."

In testimony submitted by National Farmers Union, President Rob Larew documented the extreme corporate concentration in America's farm and food system and discussed steps that must be taken to ensure a more resilient food supply for consumers and a competitive marketplace for family farmers and ranchers.

"A small handful of dominant firms control the market for most farm inputs (such as seed, crop protection, fertilizer, and in equipment manufacturing), processing, food manufacturing, wholesale distribution, food service, and retail grocery," Larew told the committee. "These very large firms in the middle of the supply chain wield immense market power, as oligopolists or oligopsonists (and in some cases as monopolists or monopsonists), compared to farmers and consumers."

The four-firm concentration ratios (CR4), a commonly used metric for illustrating market concentration that specifies the market share for the top four firms in an industry, is high in nearly all sectors that touch the food supply chain, he pointed out.

In 2018, the CR4 for companies slaughtering and processing beef, pork, and chicken was 85 percent, 70 percent, and 54 percent, respectively, Larew said. While the magnitude of national-level industry consolidation may be lower for broilers, concentration is often higher in more localized markets.

As of 2015, the top four firms for corn and soybean seeds controlled 85 percent and 76 percent of the market, respectively; this compares to 59 percent for corn seed in 1975, and 42 percent for soybean seed in 1988, he added.

Four firms account for approximately 84 percent of the global herbicide and pesticide market, and just two companies manufacture about half of the tractors and other essential farm machinery used by farmers. Market share in retail grocery is also heavily consolidated, with the top four retailers controlling approximately 65 percent of sales in 2018, Larew added.

Read Larew's full testimony at https://bit.ly/3FGTm9O.


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