The US Department of Justice and US Department of Agriculture’s public workshop and hearing on livestock showcased problems with concentration in agricultural, disappearing cash markets in cattle and virtually destroyed cash markets in swine, and the problems arising from the dangerous combination of too few packers and too little cash market activity.
The session held at Fort Collins, Colorado, was attended by US Attorney General Eric Holder, US Secretary of Agriculture Tom Vilsack, US Assistant Attorney General Christine Varney (Antitrust), Colorado Governor Bill Ritter, and Attorneys General from Colorado and Montana.
David Domina participated by invitation from the Departments of Justice and Agriculture in this panel dealing with competition issues. The panel’s objective was to discuss concentration, i.e., the dwindled number of packers in the industry and market structure.
During the panel, Mr. Domina rebutted comments by the American Meat Institute’s general counsel and lobbyist, Mark Dopp. Dopp contended concentration levels and market structure have been unchanged in cattle for many years. Domina took extreme issue with Dopp.
Drawing an obvious parallel, Domina asked the assembled group, estimated at 2,000 by some sources, if it feels like American is safer because 74% of the nation’s deposit assets are held by four banks? Not a single audience member responded affirmatively.
Domina then asked, rhetorically, “Well, if you don’t feel safer because four banks hold your money, do you really feel safer that four companies hold more than 64% of your meat?”
Before the Fort Collins session, Domina and Auburn University agriculture economist, Robert Taylor, PhD, issued their assessment of the state of livestock markets in 2010. Domina and Taylor’s paper on beef, and to a lesser extent swine, markets has been circulated extensively. It may be read here.
Watch video clips of David Domina's comments on Market Structure