Thicke Applauds Anti-Trust Meeting in Ankeny; Cites Loss of Competition in Major Markets
by FrancisThickeFAIRFIELD – Francis Thicke, candidate for Iowa Secretary of Agriculture, said today he is pleased that the U. S. Departments of Agriculture and Justice are undertaking an investigation into antitrust enforcement issues related to agricultural markets.
“Antitrust enforcement by the federal government has been ignored for so long that it will take Teddy Roosevelt-style trust busting to bring competitive markets back to agriculture,” said Thicke, who plans to participate in the first of a series of five workshops planned by the two federal departments this Friday in Ankeny.
While many farmers and industry experts at the workshop will discuss the growing concentration and loss of competition in the seed industry, Thicke said that his comments will focus on a broad view of the increasing monopolistic influences prevalent across most major agricultural markets today.
“The effects of excessive market power by a few firms has been studied for years,” said Thicke. “It has been shown that if four or fewer firms control 40% or more of a market, then it no longer functions as a competitive market.” He pointed out that, as of 2007, four firms controlled 85% of the beef packing market, four firms controlled 66% of the pork packing market, four firms controlled 59% of the broiler market, and four firms controlled 55% of the turkey market.
“Clearly we are beyond the point of open competition in our agricultural markets,” Thicke asserted. “When there are so few large firms in a market, controlling firms begin to act in concert whether or not they are directly communicating pricing with each other.”
Thicke, who owns and operates a dairy farm near Fairfield, said that the dairy industry makes a good case study of the effects of market concentration. “Recent estimates are that one firm, Dean Foods, controls a full 40% of the dairy-processing market, and that firm has acquired more than 100 dairy manufacturing plants in the last 15 years,” he said.
“With that level of market concentration and control, it is not surprising that while dairy farmers were experiencing record losses in 2009, this largest U. S. dairy processor was experiencing record profits,” Thicke pointed out.
Thicke noted that for many years dairy farmers have been repeatedly and increasingly squeezed by cycles of a marketplace phenomenon that economists call “asymmetric pricing.” Thicke explained that this occurs in the dairy industry in this way: “When prices rise for dairy farmers, milk prices rise in the grocery stores; but when prices fall for dairy farmers, milk prices remain the same or fall proportionately less in grocery stores.” Therefore, repeated occurrences of this cycle result in dairy farmers receiving an increasingly smaller portion of the dollars consumers spend on dairy products.
“I commend the USDA and Department of Justice for holding this series of workshops to listen to concerns about loss of competition in agricultural markets,” said Thicke. “I am sure they will get an earful. I urge them to heed the concerns that they hear expressed, then take action to bring competition back to American agriculture,” he concluded.
2 Comments
Hello, it’s nice to “meet” you.
I understand your dairy practice is “grass-based”… do you feed corn at all?
Thank you.
We do feed some grain to our cows: about five to six pounds per day during the summer when they are on grass, and about 10 to 12 pounds per day during the winter, when they are on stored feed.
Over time we are going towards reducing the amount of grain fed, as we gradually transform the genetics of our herd towards cows that produce well and maintain their body condition without grain.
We use barley and wheat for our grain source instead of corn.
Francis