The Deputy Secretary of USDA says the Trump administration continues to address consolidation in the ag industry.
Speaking on a National Ag Law Center webinar recently, Stephen Vaden says one of the biggest concerns is the fertilizer market and the concentration by Mosaic and Nutrien. “It should have never been allowed to happen in the first place that those two companies were able to so constrain the supply of so many of the fertilizers that our farmers depend on that they were able to get pricing power.”
He says anti-competitive behavior has put U.S. farmers at a major disadvantage. “It’s unacceptable. This administration is going to do everything it can to ensure that farmers have the fertilizer they need at a price they can pay and a price that allows food to be purchased at a price that the consumer can pay. We’re not going to allow these two companies to do anything to undermine this or another new market participant.”
Vaden says, “The two companies have operations in Canada where they openly – their word ‘work together’, my word ‘collude’– to control prices up there. That would be such a clear violation of the antitrust laws of the United States, but they don’t bring that venture down here to the United States.”
Vaden says similar concerns have emerged with farm equipment manufacturers. “It’s not just right to repair. It’s the right to pick where you purchase from. Ask any farmer who’s bought a piece of equipment recently. Can you pick which dealer you purchase from? The answer is no.” According to Vaden, those restrictions can lead to unnecessary and added costs for farmers who choose to buy equipment outside their local dealer network.
EDITOR’S TAKE:
It will be interesting to see how USDA and the Trump Administration attempt to address these situations. It is no secret that consolidation has been occurring in agriculture since the early 20th century. Farms and ranches have gotten larger, with fewer owners. At one point in our history, nearly 50% of the population was directly involved in production agriculture. Today that number is less than 1.2%. As a result, consolidation has also taken place at other levels of food and agricultural production. At the same time, productivity on the farm has risen dramatically through the use of technology and other labor-saving techniques. Do we have oligopolies or monopolies at the supplier level? The answer is probably yes. Is it a major concern for farmers/ranchers – that answer is also likely to be yes. What can be done to increase competition or lower prices? Maybe USDA has the answer. We’ll keep our eye on this issue.
You, however, can help control those operating costs for farmers/ranchers in your area. How? By promoting AgPack®, which provides nearly $50,000 in exclusive rebates and discounts on products they can use on the farm/ranch. It is an amazing opportunity for you to conquest more truck sales with every farm/ranch customer who enters your dealership. Make sure to always ask that all important question – “Are you a farmer/rancher?”
