Remarks as Prepared
Thank you for inviting me to address the National Farmers Union. I bring greetings from the Attorney General. In defining the Justice Department’s top priorities, the Attorney General has placed reinvigorating antitrust enforcement at the center of the department’s focus on “Ensuring Economic Opportunity and Fairness.”
As the Associate Attorney General, I oversee a portfolio that touches on a wide range of issues, from voting rights to competition and consumer protection. I am excited to address this group because farmers have a special place in our economy. You help put food on the table for American families. You drive innovation in food and consumer products. You anchor communities across the country. In fact, in my home state of Pennsylvania, farms employ people in every single county in the Commonwealth, generating more than 579,000 jobs and $26 billion dollars in revenue.
It is therefore vital that farmers benefit from a free, fair and competitive economy for agricultural products. Competition means more choice when deciding where to buy and sell, and ultimately more money in the pockets of American farmers. This also helps American consumers, the American economy, our national security and our health. We all succeed when farmers succeed. We all benefit from robust competition in agricultural markets.
During the pandemic, processors in several agricultural markets, such as poultry, beef and hogs, have generated record profits. American farmers have seen just the opposite. While consumers are paying more, farmers are making less. The gap between the price at auction and the price at the grocery store has left many farmers with serious questions about the power of these processors.
It also underscores the problem of a market structure where one or just a few buyers have the power to effectively set prices for the goods family farmers sell. When buyers have the ability to dictate terms to their workers or suppliers, like farmers, they can squeeze them for lower wages or lower prices without passing any savings on to consumers.
These problems go beyond cattle, poultry or hogs. As President Biden recently recognized in an executive order urging a whole-of-government approach to combatting consolidation, “[c]onsolidation in the agricultural industry is making it too hard for small family farms to survive.” As a result, fewer and fewer companies control the production of fruits, vegetables, dairy and other essentials.
This has real consequences for American farmers and families. Fewer choices means lower prices when you sell and higher prices when you buy. It shifts power from local communities to large corporations. It makes food more expensive without benefiting those who grow it.
The department takes these concerns seriously, and as the President’s order requires, we are taking a government-wide approach to address them.
As an example, the department is working with the United States Department of Agriculture (USDA) to strengthen and enforce the Packers and Stockyards Act, which was passed in 1921 and celebrated its 100th anniversary just last week.
The Packers and Stockyards Act was inspired by a report from the Federal Trade Commission finding that “five great packing” companies had “attained such a dominant position that . . . [t]he producer of livestock [was] at the mercy of these five companies.” Their tactics included illegal conspiracies and antitrust violations, as well as a broad range of unfair and deceptive practices. As the FTC noted at the time, packers “employ[ed] practically every tried method of unfair competition known,” including short weighing and price discrimination, and also “invent[ed] new and ruthless methods” when it suited them. The result, in the words of the Supreme Court, was that packers could “arbitrarily . . . lower prices to the shipper, who sells” and “arbitrarily . . . increase the price to the consumer, who buys.”
These problems are familiar. Too much power in the hands of a few buyers creates a bottleneck between producers and consumers. As a result, payments to farmers go down and consumer prices go up. Grocery stores see shortages while farmers struggle to sell their goods.
The Packers and Stockyards Act was designed to help. It took on specific practices by requiring stockyards to maintain accurate weights and promptly pay shippers. It also allowed USDA, with help from the Department of Justice, to pursue other unfair and deceptive practices that the packers might invent in the future. The Packers and Stockyards Act can be an important tool for addressing anticompetitive, unfair and deceptive practices, but we can and must do more to realize its potential. President Biden’s Executive Order on Competition is a good start. It calls on USDA “to strengthen [its] regulations concerning unfair, unjustly discriminatory or deceptive practices” under the Packers and Stockyards Act.
USDA has already announced its intention to pass new rules implementing the President’s Executive Order on Competition. The Department of Justice has expressed its support for these efforts, including our willingness “to work hand in hand with the USDA to use our combined enforcement authorities” to protect American farmers, ranchers and consumers. I also have personally directed the Antitrust Division to “work with the Department of Agriculture to support the revision of Packers & Stockyards Act rules.” Additionally, USDA has invested $500 million dollars to support new entrants in meat and poultry processing, which will expand the choices available to farmers and consumers.
These efforts build on the department’s longstanding partnership with the USDA. For example, in 1999, we signed a Memorandum of Understanding with the USDA. Our collaboration under the Memorandum of Understanding goes both ways. In some cases, USDA refers matters to the division. In other cases, we work closely with USDA to leverage their expertise in understanding how a merger might affect specific agricultural markets. And we have benefited tremendously from this partnership, including in recent cases involving grain elevators and crop insurance. Last year, we worked with USDA in issuing a pandemic-related business review letter to the National Pork Producers Council. We have also held joint workshops to hear directly from farmers, growers, ranchers, and producers.
We are working with USDA and other agencies to fight excessive concentration in other agricultural markets, too, including markets for seeds, fertilizer, feed, pesticides and equipment. These industries have a significant impact on the ability of small and independent farmers to make a living. We will therefore vigorously police mergers that may lessen competition in these and other markets, such as our successful challenge to JBS’s proposed acquisition of National Beef. We will also bring cases to challenge anticompetitive conduct in already-concentrated industries when the facts and the law support it.
We will also continue to advance the interests of American farmers and consumers through our amicus program, which allows us to put forward legal positions in lawsuits we did not bring. That includes urging courts not to use the Capper-Volstead Act to immunize an alleged monopolist accused of harming independent farmers, the very people the Capper-Volstead Act was meant to protect.
The department’s criminal program also depends on working closely with other federal agencies to pursue price fixing, bid rigging and market allocation across the economy, including in agricultural markets ranging from food to farmland.
For example, prosecutors at the Antitrust Division partnered with the FBI, Department of Commerce and USDA to investigate and prosecute a long-running, nationwide conspiracy to fix the price of broiler chickens — a staple food for millions of Americans. To date, our investigation has resulted in cases against 14 executives and employees, and three companies. That includes Pilgrim’s Pride, one of the nation’s largest chicken producers, which pleaded guilty in February and was fined $107 million dollars for its role in the conspiracy — the highest fine ever obtained for a domestic antitrust conspiracy.
Fixing the price of commodities like chickens robs farmers and consumers of the benefits of a competitive economy. It means farmers get less, consumers pay more, and criminals profit. The department will not hesitate to investigate and prosecute these kinds of schemes. That includes, where appropriate, prosecuting the executives responsible because nobody is above the law.
The department has also aggressively prosecuted bid rigging. For example, in May 2021, the department obtained an indictment against two individuals for accepting a $40,000 side-payment to stop bidding in an auction for farmland and timber rights in Kentucky.
Bid rigging is particularly troubling in agricultural markets because farmers, growers, and ranchers depend on auctions to sell many of their goods, from produce to livestock. The Antitrust Division is dedicated to deterring and detecting crimes that would distort these auctions and affect farmers. That conduct is unjust, and it is illegal.
In addition to working with our federal agency partners, many of our cases start with reports from members of the public. We welcome reports about price fixing, bid rigging, market allocation or other anticompetitive conduct through the Antitrust Division’s Citizen Complaint Center, which you can find on the Department of Justice’s website justice.gov.
I’d like to end by emphasizing that we understand that this work is urgently needed. Consolidation in agricultural markets has reached a tipping point, making it hard for small family farms and growers to survive. Farmers are being forced to bargain with large processors when they buy and sell goods, squeezing your profits while Americans pay more at the grocery store. Poultry farmers, hog farmers, cattle ranchers and other agricultural workers are struggling under the weight of consolidation, climate change and other crises.
While the antitrust laws play an important role in helping to keep markets competitive, they will not address all of the complex issues facing American agriculture. That is why the President’s Executive Order recognized that Federal agencies with different mandates and different tools must work together to meet their common goals. And that’s why the department is going to work closely with USDA to combine its law enforcement abilities with the regulatory and enforcement tools used by the USDA to make the markets fairer for farmers and ranchers.
But I firmly believe that vigorous antitrust enforcement is an essential part of addressing many of these problems. American farmers aren’t asking for a handout. They want an opportunity to compete on a level playing field. To buy at a price set by the free market, not unlawful monopolists. To sell at a price driven by competition, not their most powerful customers. And, just like every other American, American farmers, ranchers and producers are entitled to these benefits and a free, fair and competitive economy.