April 23, 2014
The Informant Film Trailer!
Concentration in the Food Industry

"Our competitors are our friends. Our customers are the enemy." - James Randall, former president of ADM

The production, distribution and sale of food involve a diverse variety of industries, from farms to factories, from grain processors to grocers. Most agribusiness and food processing/sales sub-sectors are dominated by just a handful of corporations (see the list below). The U.S. food industry has undergone a dramatic transformation over the last 110 years. In 1900 some 40 percent of the population lived on farms, but today no more than 2 percent does. Between 1960 and 2000, the number of farms declined from 3.2 million to 1.9 million, while average size increased by 40 percent and productivity by 82 percent. Most farms raise a single commodity, and many are part of a corporate system of "vertical" integration. According to one study, for example, nearly 60 percent of the nation's broilers (chickens) are produced by just four companies - Pilgrim's Pride, Tyson, Perdue and Sanderson Farms -the vast majority on large "factory farms." (NFU).


Image: Socially Responsible Agriculture

Recent mergers among the nation's largest grain firms - including Cargill's acquisition of Continental Grain, and ConAgra's purchase of Peavey and Standard Milling - similarly left just four firms in control of over 60 percent of the nation's grain business. ADM is the largest soybean crusher (processor), followed by Bunge and Cargill, as well as the largest ethanol (corn) producer in the world. It is the third largest oilseed, grain and sugar processor. (NFU)

In meatpacking, ConAgra's acquisitions of Armour Meats, Swift, Monfort, E.A. Miller and Northern States Beef, coupled with Cargill's purchases of Spencer Beef and Sterling Beef, have played a key role in raising the four largest meatpackers' market control of the field from 28 percent in 1980 to 70 percent or more. (James Brock, "Merger Mania and Its Discontents: The Price of Corporate Consolidation," Multinational Monitor, Jul/Aug 2005, at http://www.multinationalmonitor.org/mm2005/072005/brock.html)

Mergers created four giant food processors (Tyson Foods, Pepsico, Kraft and Nestle) that sold over $23 billion each in 2007. (Food Processing Top 100 List, available at http://www.foodprocessing.com/Media/MediaManager/FPTop100_2008.pdf

At the retail level, Wal-Mart now delivers at least 30 percent and sometimes more than 50 percent of the entire U.S. consumption of products ranging from soaps and detergents to compact discs and pet food. (Barry C. Lynn, Cornered: The New Monopoly Capitalism and the Economics of Destruction, New York: Wiley, 2010).


Image: muledriver

According to industry observers, this increased concentration of most parts of the agribusiness/food industry has created a variety of adverse consequences for consumers, family farmers, and the environment. For example, Food and Water Watch reported in 2007 that CAFOs (confined animal feeding operations) and other factory farms produce massive quantities of manure that have severely polluted the surrounding water and air, displaced family farmers, and caused an increase in meat tainted with antibiotic-resistant bacteria.("Farms to Factories")

The Farmer to Farmer Campaign on Genetic Engineering reports that farmers have faced fewer choices and higher prices as the ownership of seeds has concentrated in fewer corporate hands. Monsanto, for example, now accounts for at least 60 percent of the corn and soybean seed markets through direct sales and seed trait licensing agreements with other companies. ("Out of Hand: Farmers Face the Consequences of a Consolidated Seed Industry," Farmer to Farmer Campaign, 2009. Available at http://farmertofarmercampaign.com/)


Image: Farm Sanctuary

The consequences for consumers are little better. Author Barry Lynn describes the illusory choices offered to most American consumers in his book, Cornered:

"For those Americans who believe in what we were taught in civics class and Econ 101, the most disturbing revelation was not even the fragility of our food systems, but that some of our most cherished beliefs about how the U.S. economy works appear no longer to be true. ...Instead of having infinite choice, as we thought, we are really presented with a wall of standard-issue cans and pouches that are distinguished only by the words and colors on their labels." And so:

  • Colgate-Palmolive and Procter & Gamble split more than 80 percent of the U.S. market for toothpaste.
  • In large retail stores, almost every beer is manufactured or distributed by either Anheuser-Busch InBev or MillerCoors, including imports like Corona, Beck's, and Tsingtao; regional beers like Rolling Rock; once independent microbrews like Redhook and Old Dominion.
  • Campbell's controls more than 70 percent of the shelf space devoted to canned soups.
  • In the modern snack aisle, Frito-Lay has captured half the business of selling salty corn chips and potato chips.
  • Nine of the top ten brands of bottled tap water in the United States are sold by PepsiCo (Aquafina), Coca-Cola (Dasani and Evian), or Nestlé (Poland Spring, Arrowhead, Deer Park, Ozarka, Zephyrhills, and Ice Mountain).


Image: hellochris

Just about everyone concerned about concentration in agribusiness and the food markets has suggested that, at a minimum, there is a dire need for strengthened enforcement of existing antitrust laws and regulations. Attorneys working for the Organization for Competitive Markets - a leading food market policy group - recently concluded a major examination of agricultural market concentration with this warning:

"In the long run, the concentration and integration risk will continue to drive food prices up, bring an end to the nation's affordable food policy, and contribute to a rapidly deteriorating agriculture and rural economy. ...[M]arket concentration in too few corporate hands poses price, biosecurity, and lack of redundancy risks to all American consumers. Corrective action is an urgent national need." (OCM)

For More Information:

"The Debilitating Effects of Concentration in Markets Affecting Agriculture," Organization for Competitive Markets (OCM), 2009. http://www.competitivemarkets.com

"Power hungry: six reasons to regulate global food corporations," ActionAid International, 1/05.
http://www.actionaid.org

National Farmers Union report (NFU) on Concentration in Agricultural Markets (prepared by Mary Hendrickson and William Heffernan of the U. of Missouri), April 2007. Available at: http://www.nfu.org/wp-content/2007-heffernanreport.pdf.

Food and Water Watch, "Turning Farms Into Factories" (report), 2007. Available at:
http://www.foodandwaterwatch.org/food/factoryfarms/turning-farms-into-factories/FarmsToFactories.pdf

"Out of Hand: Farmers Face the Consequences of a Consolidated Seed Industry," by Kristina Hubbard, Farmer to Farmer Campaign (2009), available at: http://www.farmertofarmercampaign.org

List of top companies in each Food/Agribusiness Industry Sector:

Seeds:
  1. Monsanto
  2. DuPont
  3. Syngenta
  4. Group Limagrain
Beef Packers:
  1. Tyson
  2. Cargill
  3. Swift & Co.
  4. National Beef Packing Co.
Pork Packers:
  1. Smithfield
  2. Tyson
  3. Swift & Co.
  4. Cargill
Dairy Processors:
  1. Den Foods
  2. Kraft
  3. Land O'Lakes
  4. Saputo Inc.
Soybean Crushing:
  1. ADM
  2. Bunge
  3. Cargill
  4. Ag Processing
Ethanol Production (corn):
  1. ADM
  2. US Biofuels
  3. VeraSun Energy Corp.
  4. Hawkeye Renewables
Pesticides:
  1. Bayer
  2. Syngenta
  3. BASF
  4. Dow AgroSciences
Fertilizers:
  1. PotashCorp (Canada)
  2. Yara (Norway)
  3. Mosaic (Cargill) (USA)
  4. Israel Chemicals (Israel)
Biotech:
  1. Amgen (USA)
  2. Genentech (USA)
  3. Monsanto
  4. Gilead Sciences
Oilseed, Grain and Sugar Processing:
  1. Cargill (USA)
  2. Bunge Ltd. (Bermuda)
  3. ADM (USA)
  4. Marubeni (Japana)
  5. Noble Group (UK)
Chicken (aka "Broilers"):
  1. Pilgrim's Pride (bankruptcy)
  2. Tyson
  3. Perdue
  4. Sanderson Farms
Organic:
  1. Heinz
  2. Dean
  3. Kellogg
Food Processors:
  1. Nestle
  2. ]Kraft
  3. Unilever
  4. General Mills
Grocers/Retailers (Global):
  1. Wal-Mart
  2. Carrefour (France)
  3. Tesco (UK)
  4. Schwarz Group (Germany)
  5. Aldi (Germany)
  6. Kroger (US)
Grocers/Retailers (US Only):
  1. Wal-mart
  2. Kroger
  3. Albertson's
  4. Safeway
General Food & Beverages:
  1. Nestle
  2. PepsiCo
  3. Kraft
  4. Coca-Cola
  5. Unilever