Antitrust Times Two

Both of these stories have been out for a while, but I think they still deserve some air time.

Seed Control

The Department of Justice announced that it is investigating a potential antitrust claim against seed companies for their essential takeover of U.S. agriculture. Ten companies account for 65% of seed sales with intellectual property implications. Four companies control half of the proprietary market (seeds with IP protections) and 43% of the common market (public and IP protected seeds). Check out the Farmer to Farmer's report here. As if this weren't bad enough, Monsanto itself controls 90% of U.S. grown soybeans and 80% of U.S. grown corn. When you consider how many forms of processed foods contain some form of U.S. grown corn or soybeans, we're talking about an unbelievably large market share.

The AP recently reported on Monsanto's competition-squeezing practices. The AP report notes concern that, if Monsanto chooses to up its prices, all the cheap processed food that we've gotten used to may not be so cheap anymore. (Maybe then people will eat less bad food. Or we'll just be fat and poor.)

In indirectly related news, Grist recently reported that soybean yields have increased to the point that they are now leading to deforestation in the Amazon. We're sacrificing carbon sinks in favor of cheap food additives AND profiting Monsanto at the same time.

Speaking of soybeans...

Dean Foods

(Dean is the owner of WhiteWave, which produces Silk Soymilk.)

While dairy farmers have posted average losses of $180,000 this year, Dean Foods, the largest dairy distributor in the U.S., has seen profits increase by 30%. As a result, a group of dairy farmers in the Northeast have filed a class action suit against Dean Foods and Dairy Farmers of America. The suit alleges that Dean and DFA monopolized dairy distribution, forcing farmers to sell through them if they wanted to remain in the market. Farmers currently make about $1 per gallon of milk, which is only 2/5 of the actual price.

As things get worse for dairy farmers, it isn't only the loss of small family farms that we have to worry about. When farmers don't make any money, they can't afford to pay their workers well. Barry Estabrook just wrote in The Atlantic Online about the plight of dairy workers following the death of a 20-year-old illegal immigrant who was caught in a manure removal conveyor belt.

Whatever the result of this investigation and this suit, they both emphasize the true costs of cheap food.

UPDATE: The DOJ has filed an antitrust suit against Dean for its 2009 acquisition of Foremost Farms. MarketWatch article here.