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14 April 2010 - Your thoughts on the threat of monopolies to agriculture

Two weeks ago on Samuelson Sez, I talked about the threat of lack of competition and monopolies to farms and ranches in the United States, and I asked for your response. Well you did respond and as promised, this week I share some of your thoughts.

Beginning with a Wisconsin farmer who said...."I was a Monsanto 'seed partner' until a couple of years ago. I've worked with Syngenta traits, too. Been in the seed business over 40 years on a family farm scale. The big seed/trait/chemical companies want all the business. They have a definite monopoly and will continue to do so as long as the legal system lets them."

A dairy farmer in Maryland said..."One of the issues facing the dairy supply-side is the price discovery system. We no longer use the daily Class III values that were derived from the Minnesota-Wisconsin system. That system polled the cheese plants to establish a real-time Class III price. We now establish the Class III price for the whole country based on a small volume of butter and cheese traded on the CME by a very limited number of traders!"

A farmer in South Carolina shared this..."About 15 years ago, we had 4 stockyards in a 50-mile radius of our hometown, incvluding one in town; today there is one left and it is 50 miles away.Yes. I think the hog industry is way too concentrated to the point that farmers are not getting a sustainable price for their animals."

From Illinois, a farmer said..."One of our packer buyers told me the packers used to set the price on beef. Now on Mondays and Tuesdays they fill orders for special programs, then on Wednesday Wal-Mart comes and tells the packers what they will pay. The packers have a competition problem with the large retailers moving the market."

From Missouri..."Yes, it is true that we have a monopoly at work in the seed industry. We have a major company that owns most of our smaller corn and soybean seed companies (about 30) and has agreements and contracts with most of the rest of them. Giving them control of about 95% of the genetics. The question as to what to do about this problem is very complicated, but it may take a 'Ma-Bell'-style break-up to stop this trend."

And finally, from a Georgia farmer..."Agribusinesses have gotten way too big. Because our government has not enforced our anti-trust laws, the farmer has a lack of choices in his seed, fertilizer and chemicals. The monopoly companies are now telling the farmer what to plant and when to plant the crop."

Thank you for your response. But not all producers said lack of competition is a threat. You might be surprised at what some farmers said was an even bigger threat to their well-being than lack of competition. You can read those comments next week.

Again, thanks for sharing on this week's Samuelson Sez.