March 30, 2022

Legislators concerned about potential poultry merger

Legislators concerned about potential poultry merger 

By: Sydney Sheffield 

Recently, Sanderson Farms has proposed a merger with Wayne Farms, which has raised concerns among those in the House and Senate.  Sanderson Farms is among the top four poultry producers nationally and some believe the merger would increase price-fixing schemes as well as hurt farmers and consumers.

With food prices at an all-time high, the letter expresses extreme concern that further consolidation will raise poultry prices even higher for Americans. Currently, chicken prices have increased by 15% compared to pre-pandemic prices, with cut pay for farmers and limits protections for workers.

U.S. Senator Elizabeth Warren (D-MA) and Representative Mondaire Jones (D-NY) along with a number of other Democratic representatives sent a letter to the Department of Justice (DOJ) about the matter. “This proposed mega merger raises significant antitrust concerns in an industry already marked by price fixing, labor violations, and intense consolidation. In particular, this mega merger could increase the major poultry companies’ monopoly and monopsony power, allowing them to raise prices for consumers while cutting pay for farmers and other poultry-industry workers,” the letter said. “Given these concerns, we urge the Department of Justice (DOJ) to conduct a thorough review of the proposed Sanderson-Wayne deal to ensure that it does not harm American farmers and consumers.” 

The lawmakers raised alarms that the companies involved in the proposed Sanderson-Wayne merger are already implicated in several price-fixing lawsuits. In 2019, Sanderson Farms was subpoenaed by the DOJ for a price-fixing lawsuit with Tyson Foods Inc. and Pilgrim Pride Corp. In 2018, the company was involved in a lawsuit alleging that coordinated production cuts with other major poultry companies resulted in a “roughly 50% increase in the price of broiler chickens” and cheated consumers out of approximately $330 each year since 2008. 

Senator Warren has previously requested for the Justice Department to investigate the impact of price-fixing and consolidation within the poultry industry on consumers and farmers. The letter concludes, asking the DOJ to “scrutinize the proposed Sanderson-Wayne transaction to determine whether it violates the antitrust laws, and the DOJ should oppose the merger if it does.”

Gary Wertish, Minnesota Farmers Union President said “increased consolidation does not benefit farmers, nor consumers. Instead, it concentrates power into the hands of a few and leaves farmers with fewer market opportunities and consumers with higher prices.”

Read the full letter here.