Look to the facts in any regulation of marketplace
In a recent op-ed "Monopolies are killing our farms" [April 16] Timothy Wise called on the U.S. Department of Justice to be a "new sheriff in town" and get tough with large agriculture companies, but he did not offer any legal basis for enforcement action. His suggestion came by way of comment on a public hearing held by the DOJ and the U.S. Department of Agriculture last month in Ankeny, Iowa.
It focused on crop-related issues yet Mr. Wise singled out not just a large seed company but Smithfield Foods -- a livestock producer and maker of pork products -- for special criticism. Mr. Wise's vague complaint against Smithfield reflects his assumptions about our power in the marketplace; he focused in particular on a thoroughly scrutinized and reported transaction with Premium Standard Farms in 2007.
Yet Mr. Wise acknowledged that DOJ antitrust authorities scrutinized that transaction; he actually quoted the 2007 conclusion of DOJ's career antitrust attorneys that the company "is not likely to harm competition, consumers or farmers."
Our business model is shaped by the demands of our large customers, who naturally enjoy their own market power, and consumers, who want wholesome food at a low price produced in a responsible manner. A key indicator of the societal responsibility we feel is reflected in our commitment to the environment. In fact, 578 Smithfield Foods facilities worldwide have been ISO 14001 certified, long considered the gold standard of environmental management.
We produce hogs, and buy hogs from independent producers who contract with us and are able to negotiate a fair price. Their contracts help them get credit and build long-term business plans.
Mr. Wise's assertion that producers in the Southeast have only one buyer to deal with simply isn't accurate. Producers who choose to sell on the open market typically have multiple potential customers with whom to negotiate for the best price -- and prices reflect that reality.
Through the hearings that began at Ankeny, the Obama administration is taking a look at the state of the agriculture marketplace. We expect that they will look to the facts and the laws that govern our marketplace. We live up to those laws every day as we provide quality food at a fair price to American families.
Senior Vice President
Chief Sustainability Officer
Smithfield Foods Inc.