Department of Justice investigates possibility of predatory pricing
FROM hot and dry North Dakota wheat fields to sultry Arkansas henhouses, farmers are grumbling about the increasing corporate control of agriculture.
Now federal officials are indicating that they share the concern. The United States Department of Justice recently launched an investigation of leading corn millers, looking into the possibility of predatory pricing by processors of farm goods.
The department's antitrust division subpoenaed three of the largest grain processors in the US: Archer-Daniels-Midland Company, Cargill Inc., and A.E. Staley Manufacturing Company.
The grand jury investigation in Chicago involves "the possibility of anticompetitive practices in the food- and feed-additive industries, and it is international in scope," says Jim Sweeney, a department spokesman in Washington. He declined to elaborate.
The increasing concentration of agricultural companies has been a controversial issue for years. Although the Justice Department has acted against the corn processing industry before, meatpacking is frequently singled out as a sector allegedly involved in collusion and unfair pricing.
The antitrust investigation has so far concentrated on the narrow but lucrative sector of corn milling. Specifically, it is looking at production of high-fructose corn syrup, a sweetener used in a myriad of products including soft drinks, fruit juices, candy, chemicals, tobacco, condiments, processed meats, alcoholic beverages, breads, and snack foods.
Investigators are also looking into the production of lysine, an amino acid added to livestock feed, and citric acid, which is used to make beverages, foods, pharmaceuticals, and photographic materials.
"We feel confident that when the documents and the examination [are] conducted, the facts will speak for themselves," says Garland West, a spokesman for Cargill based in Minneapolis. He says Cargill will fully cooperate with the probe.
The stakes of the investigation are huge. Industry sources declined to apply a reliable dollar figure to the output of corn millers, but the nine members of the Corn Refiners Association in 1993 shipped 18.58 billion pounds of high-fructose corn syrup, according to the Washington-based association. (There are two corn refiners not part of the association.)