Cargill’s Wand Waving

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It may be July, but the Star Tribune gave some of the biggest agribusiness firms around a nice Valentines on July 21. On the opinion page, the newspaper’s editorial board lauded firms like Cargill and CHS for using all the tools at their disposal to “feed the world.” At one point, the Star Tribune editorial made a plea to readers on behalf of the big boys when it opined that Cargill would just like the government to “let free markets work their magic.” That’s a real gag-inducer. Or, as William Pappas wrote in a July 25 letter-to-the-editor: “I was struck dumb by your July 21 lead editorial.” Here’s a hint at the kind of free-market magic Cargill has conjured: It and three other firms now control at least 83 percent, 66 percent and 55 percent, respectively, of the nation’s beef, pork and turkey slaughter, according to the University of Missouri’s most recent “Concentration of Agricultural Markets” report. Three firms control 55 percent of flour milling. Guess who’s No. 1 on that list? A partnership between Cargill and CHS. According to conventional economic wisdom, when four firms control more than 40 percent of a market, it’s no longer a competitive one. This isn’t about allowing the laws of supply and demand to rule, and it’s certainly not about feeding hungry people. It’s about the kind of market control that forces farmers to take whatever price is offered and consumers to pay whatever is demanded. When seeking that kind of control, Cargill and its ilk want one kind of magic — a disappearing act on the part of fair competition.

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