Scott Shearer, writing for the National Hog Farmer Weekly Preview, reports that a new study by the Government Accountability Office (GAO) has found that concentration in the food processing of “beef, pork, or dairy sectors or the retail sector, overall, has not adversely affected commodity or food prices.”The report was put together by looking at several trends in retail food expenditures and prices, trends in concentration, trends in the prices farmers receive, and “the effects of concentration on commodity and food prices.” The report also contained other findings. These findings show that concentration in the food marketing chain has generally increased “in all agricultural sectors since the 1980s.” In 2007, less than 2% of all farms accounted for 50% of total sales. The largest four hog slaughtering firms saw their market share increase to 63% in 2007 from 36% in 2005. From 1982 to 2005 the share of sales from grocery stores of these four firms increased from 16% to 36%.
The report also found that, while farmers receive higher monthly prices for their commodities, these price increases have “increased less than food prices and inflation . . .” From January 1982 to April 2009 food prices rose by 128% while “prices in the general economy rose 102%." Over the same time prices farmers received from commodities like grains, beef, pork, and dairy only rose by 34%. Senators Herb Kohl (WI) and Chuck Grassley (IA) requested the study.
Recently the Department of Justice and the United States Department of Agriculture announced the two departments would conduct joint workshops dealing with issues of competition in the agriculture industry. Vertical integration and buying power are among the issues the workshops will cover. However, other issues can be discussed at the workshops, including concentration and food cost issues. The workshops are scheduled for 2010.
To see a previous United States Agriculture and Food Law and Policy Blog posts on the cost to raise a child in the United States click here, or on the joint workshops click here. To read the Shearer article in the National Hog Farmer Weekly Preview click here.
Posted: 08/18/09
