000143 Proposed Pork Merger Raises ConcernJanuary 25, 2000Des Moines, IA - The Iowa attorney general filed a lawsuit seeking to block the sale of Murphy Family Farms in Iowa to Smithfield Foods Inc., saying the deal would violate state law. “We allege a Smithfield acquisition of Murphy farms would violate Iowa law that prohibits meat processors from owning, controlling or operating a feedlot in Iowa,” Attorney General Tom Miller said after filing the lawsuit in Humboldt County District Court in Dakota City. Smithfield Foods, of Smithfield, Va., and Murphy Farms, Rose Hill, NC, the nation's two largest hog producers, announced a $290 million merger Sept. 2, 1999, after producer pork prices hit rock bottom. The state is seeking injunctions to block the merger, which is expected to complete as early as this week, according to the attorney general. “If Smithfield acquires Murphy Farms, it will retain essential control of pork production at about 300 sites in Iowa where Iowa producers have swine production contracts with Murphy Farms,” Miller said. Farm groups have asked the Justice Department to take a closer look at such mergers, complaining that farmers are losing their independence and bargaining power as the number of food processors, grain traders and farm suppliers shrink. In November, the U.S. Senate rejected a proposed 18-month moratorium on agribusiness mergers.
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