Washington, DC—U.S. Senator Tim Johnson (D-SD) today urged Agriculture Secretary Tom Vilsack and Attorney General Eric Holder to come to South Dakota to gain a better understanding of competition issues affecting the agriculture industry in the 21^st century.  Vilsack and Holder recently announced that they plan to hold workshops around the country next year to examine the issue, and Johnson has made the case that South Dakota would be an excellent choice for a hearing on agricultural concentration and competition.

“This would be the first time the Departments of Agriculture and Justice have joined together for a hearing of this kind.  I want to thank the Secretary and Attorney General for turning a spotlight on this important issue, and I know the perfect place to keep the discussion going. South Dakota’s more than 30,000 farms and ranches, as well as the diversity of production of livestock and field crops, makes our state an ideal location to contribute to the national dialogue on competition in agriculture,” Johnson said.    

A Copy of the Letter Johnson sent to Agriculture Secretary Tom Vilsack and Attorney General Eric Holder follows:

Secretary Tom Vilsack                                                Attorney General Eric Holder

United States Department of Agriculture      United States Department of Justice

1400 Independence Ave., SW                                    950 Pennsylvania Ave., NW

Washington, DC 20250                                  Washington, DC 20530

Dear Secretary Vilsack and Attorney General Holder,

I write to request that a public workshop focused on the issues of competition and concentration in agricultural markets and agricultural industries be held in the state of South Dakota.  The agricultural sector in South Dakota is a substantial economic driver in the state, and the ongoing pressures independent farmers and ranchers face from large agribusinesses merit such a workshop be conducted there.

In 2008, South Dakota claimed 31,300 farms and ranches and ranked fifth nationally for total land in farms and ranches.  The state offers a variety of perspectives, and is among the nation’s leaders in the production of livestock and field crops, while maintaining a diverse agricultural production system (see table).

A study by South Dakota State University concluded that in 2006 agriculture accounted for 36.3% of the state’s total economic activity, or $21.3 billion when considering both production agriculture and the resulting impact on agricultural businesses.  According to the same report, 173,101 people were directly or indirectly employed as a result of South Dakota’s agricultural activities.  The success of Secretary Vilsack and Attorney General Holder the agricultural sector clearly has a tremendous impact on South Dakota’s economic health and the vitality of our rural communities.

South Dakota farmers have been some of the most entrepreneurial producers in the nation in employing new varieties of seed in their farming operations.  Also, the state’s farmers rank among the top adopters of no-till cropping methods and the use of specific herbicide combinations linked to new seed technologies.  However, farmers and ranchers in the state are facing serious challenges this fall with depressed prices and decreased opportunities for price discovery options for their final product.  The livestock sector in particular is facing difficult economic challenges. Shrinking marketing opportunities for livestock producers increases the economic stress level producers face.

While new technology traits have proven advantageous for farmers in securing a more robust and dependable crop, there are only a few companies upon which farmers rely for this technology.  There are also relatively few companies that purchase and process raw farm products.  As you know, the top four firms’ share of the beef packing sector has increased from 39% in 1985 to 69% in 2006. Likewise, the top four firms’ share of the hog processing sector has increased from 32% in 1985 to 64% in 2006. 

The first-ever joint workshops on agricultural concentration and resulting effects on marketing opportunities for agricultural producers will be of great interest to South Dakotans, and I am confident that holding such a workshop in South Dakota would provide very insightful information.

Thank you in advance for your attention to this request.

                                              Sincerely,

                                              Tim Johnson

                                              United States Senate

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