Poultry grower Trina McClendon was three years into her 15-year contract with Sanderson Farms, America’s third-largest poultry processor, when she was offered a new take-it-or-leave-it contract that would slash her farm’s income by a third.
It wasn’t just McClendon’s 350-acre farm. All of Sanderson’s Mississippi growers were being asked to accept a deep cut, one that would result in the loss of tens of thousands each.
The surprise came two days after another big reveal. Sanderson Farms had just announced it would be acquired for $4.5 billion. The deep pockets behind the deal: a joint venture backed by grain traders Cargill, the biggest privately held company in the U.S., and Continental Grain, which owns poultry processor Wayne Farms.
That acquisition is now getting scrutinized by federal antitrust regulators, because it would create further consolidation in an industry already reeling from it. The top four poultry processors currently control more than 54% of the market; this deal would mean more than 50% alone rests with the top three firms.
“Send a clear and concise message to Sanderson Farms, Cargill and Continental Grain that the consolidation of our food industry is detrimental,” McClendon told lawmakers on a House antitrust panel Wednesday.
The hearing, which I previewed for you last week, focused on the link between price hikes, profiteering and consolidation in the food industry. At the end of her testimony, McClendon asked for three things: Stop the merger, enforce existing antitrust legislation, and temporarily halt all agribusiness mergers.
I’m not going to bet on that last one, but I appreciate a bold ask.
That’s my Reporter’s Notebook Edition for this week. I’ll leave you with a comment from subcommittee chair David Cicilline (D–R.I.), who called me after the hearing to discuss rising food prices, which have already been hit by inflation, climate change and supply-chain woes: “Food prices have skyrocketed. We have a responsibility to find out why that’s happening. To the extent that corporate greed and profiteering from the pandemic is part of it, we want to make sure that stops.”
— Chloe Sorvino, Staff Writer
This is Forbes’ Fresh Take newsletter, which every Thursday brings you the latest on the big ideas changing the future of food. Want to get it in your inbox every week? Sign up here.
U.S. Probes Big Meat’s Link To Inflation. Unprecedented consolidation in the U.S. food industry may be a cause of rising prices and empty grocery-store shelves. The White House, supported by independent economic analysts, has asserted there’s a link between inflation and the dwindling number of food suppliers. The House of Representatives antitrust subcommittee, chaired by Democrat David Cicilline of Rhode Island, took on the topic on Wednesday.
Why Is Food Insecurity So Widespread In The Grocery Industry? The food industry has yet to reckon with the food insecurity, poverty and precarity that are so widespread among grocery workers, writes Errol Schweizer.
DoubleDragon, Jollibee Ramp Up $482 Million Warehouse Portfolio Ahead Of IPO As E-Commerce Booms. CentralHub Industrial Centers—a joint venture between real estate tycoon Edgar Sia’s DoubleDragon Corp. and billionaire Tony Tan Caktiong’s Jollibee Foods—is ramping up the construction of warehouses across the Philippines to tap growing demand from e-commerce companies, reports Jonathan Burgos.
The Royalties For Cherry Garcia Ice Cream Are For Sale. The unique opportunity to won part of the royalties from the original rock and roll ice cream flavor Cherry Garcia will disappear fast, reports Hudson Lindenberger.
Most Independent Restaurants Experienced A Sales Decrease Of More Than 50% In December. A new Independent Restaurant Coalition survey shows that nearly 50% of businesses without federal grants were forced to lay off staff because of a COVID-19-related closure or lack of sales, and 42% are in danger of filing or have filed for bankruptcy, writes Alicia Kelso.
Somedays, burrata and ripe figs are all that I crave.
Chloe Sorvino leads coverage of food and agriculture as a staff writer on the enterprise team at Forbes. Her nearly eight years of reporting at Forbes has brought her to In-N-Out Burger’s secret test kitchen, drought-ridden farms in California’s Central Valley, burnt-out national forests logged by a timber billionaire, a century-old slaughterhouse in Omaha, and even a chocolate croissant factory designed like a medieval castle in Northern France. Her book on the fight for the future of meat is forthcoming from Simon & Schuster’s Atria Books in September 2022.
Thanks for reading the twentieth edition of Forbes Fresh Take! Let me know what you think. Subscribe to Forbes Fresh Take here.