NOBULL: JBS acquires US operations of XL Foods – “…far exceeded the level of monopolization…”

JBS acquires US operations of XL Foods

By Meatingplace Editors on 4/5/2013

JBS USA on Thursday announced its intention to buy XL Foods beef packing plants in Omaha, Neb. and Nampa, Idaho, effective April 8, 2013.

In doing so, JBS exercised its option to buy the U.S. plants, as part of the deal announced in January when it bought XL Foods’ Canadian operations. JBS in October took over management of the XL Foods Lakeside plant in Brooks, Alberta, in the wake of a massive beef recall after E. coli O157:H7 was detected in product samples.

The Omaha plant has capacity to process 1,100 head of cattle per day. The Nampa plant also has capacity of 1,100 head of cattle per day, although it is currently idle and JBS announced it has “no immediate plans to reopen the facility.”

The announcement follows the U.S. Department of Justice ending its anti-trust investigation into the potential acquisition of the two U.S. plants.

The cattle producers’ trade group R-CALF USA and some other agricultural organizations last December sent a letter to the DOJ asking for an expanded investigation into the possibility of JBS buying the two US-based beef packing plants.

The groups did not want to see further consolidation in the meat packing industry. According to R-CALF, four meat packers now control 85 percent of the steer and heifer slaughter in the United States.

“Our industry is already concentrated at an unprecedented level,” R-CALF CEO Bill Bullard said in an interview with Meatingplace. “We have far exceeded the level of monopolization and concentration in the marketplace that is known to elicit anti-competitive behavior and poor economic performance.”