JBS-Swift & Co. CEO Wesley Batista argued Wednesday at a Senate Judiciary subcommittee hearing that his company's pending acquisitions of National Beef Packing Co. and Smithfield Beef Group would not reduce market competition.

Some cattle producers generally have raised the concern that the merger would effectively reduce the number of cattle buyers to three from five, subjecting cattle producers to depressed prices and costing consumers more at retail. Sen. Herbert Kohl (D-Wis.) shares those concerns, which is why he called for a hearing of the Antitrust, Competition Policy and Consumer Rights subcommittee.

Batista told the panel JBS-Swift plans to continue its strategy of maximizing production, improving plant operations and increasing sales domestically and abroad, which requires the purchase of more cattle. As it relates to the "beef belt" — northern Texas, Oklahoma, Iowa, Kansas, Nebraska and eastern Colorado — JBS, Cargill, Tyson and regional and local plants "will continue to compete intensely for the purchase of cattle," he said.

Steve Hunt, CEO of U.S. Premium Beef, the majority owner of National Beef, added that "the livelihood of all cattle producers depends on the health and the growth of the beef industry, which is why we agree with JBS's vision."

But opponents to packer consolidation, including R-CALF CEO Bill Bullard, aren't buying, saying the buying power JBS would have would put many independent producers out of business, especially the fewer than 80,000 beef cattle operations that have herd sizes of more than 100 head.

"This group … would be at greatest risk of being forced to exit the industry due to the price effects of monopsony power because it is presumed that this group is comprised of more full-time cattle producers wholly dependent on competitive cattle prices for their livelihoods," he testified.

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