JBS USA’s option to buy properties from XL Foods in an agreement following the E. coli scare has some U.S. cattle producers concerned.
Management of the XL Foods plant in Brooks, Alberta was transferred to JBS USA Holdings Inc. before reopening last week.
As part of the agreement, JBS can purchase XL Foods’ Canadian and U.S. operations for $50 million in cash and $50 million in JBS SA shares. Two of the U.S. slaughtering plants reportedly offered in the deal are in Omaha, Neb. and Nampa, Idaho.
The possible sale has some American cattle producers concerned.
The Canadian Press reports the Ranchers-Cattlemen’s Action Legal Fund (R-CALF) predicts the sale would make JBS USA a dominant player in the beef industry. Bill Bullard, CEO of R-CALF sent a letter to U.S. Attorney General Eric Holder, U.S. Department of Agriculture (USDA) Secretary Tom Vilsack, and USDA Grain Inspection Packers and Stockyards Administration (GIPSA) Administrator Larry Mitchell asking them to consider the impact on cattle producers and consumers if the sale occurs.
Bullard asks for the deal to be blocked if it would lead to further consolidation in the beef market.
“It is now confirmed that the threat to our cattle industry’s fast-receding competitive marketplace is real and so our requests for an investigation and enforcement action against this threat are now in play,” Bullard said.
According to CTV News, JBS USA and the Canadian Cattlemen's Association aren't concerned about R-CALF's lobbying efforts.