AFPC Conducts Study of Agribusiness Mergers

Kelly MarshallAg Group, Agribusiness

afpcThe agriculture industry is quickly changing.  While producers are usually quick to accept change that means advancements in technology or improvements in environmental conservation, the recent rash of mergers hasn’t been as readily accepted.

In response to this shift in the industry, the Corn Producers Association of Texas (CPAT) and the Southwest Council of Agribusiness (SWCA) have requested an analysis of potential impacts from the Agricultural and Food Policy Center (AFPC) at Texas A&M.

“A delicate balance and competition in the market is key to ensuring quality, quantity and costs of technologies and resources are available to the farmers producing quality, healthy food, fiber and goods for the American consumer,” CPAT President Bruce Wetzel said. “The impact of these mergers has the potential to go beyond the short term on seed prices and development – leaving an impression on the industry for years down the road.”

According to the executive summary of AFPC’s study, the changes in market concentration resulting from the mergers meet criteria “that the Department of Justice and Federal Trade Commission would consider them ‘likely to enhance market power’ in the seed markets for corn and cotton.” Based on these findings, more studies should be done to evaluate the impact on other production inputs from the proposed merger of these large suppliers.

Results have been sent to member of Congress and relevant committees in hope of Congressional oversight.  The organizations also plan to send the study to the Department of Justice.  You can read an online summary here.