October 14, 2008
In 2007, JBS S.A., Latin America's largest beef processor, purchased Swift & Co., the third largest beef processor in the United States. In March 2008, JBS-Swift then announced the acquisition of National Beef, LLC and Smithfield Beef Group, Inc., which included 100 percent interest in the Five Rivers Ranch cattle feeding operation with a one-time feeding capacity of 811,000 head. These acquisitions have renewed concerns about industry consolidation.
A recent study suggests that there are both good and bad elements of these acquisitions. Darren Hudson, the Larry Combest Agricultural Competitiveness Chair at Texas Tech University and one of the study's authors, says this wave of consolidation is a little different than what occurred in the 1980s.
"While capturing efficiencies and lowering costs are certainly goals, the Five Rivers acquisition means that JBS-Swift is strongly moving into cattle feeding," Hudson said.
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