Scandal runs deep in the Brazilian meatpacking industry. JBS SA and Marfrig Global Foods, the world’s top two meat processors, have each been involved in multiple bribery schemes in order to obtain loans. Perhaps more concerning is the fact that these Brazilian companies used “ill-gotten financing to acquire American companies,” according to United States Cattlemen’s Association (USCA) President Kenny Graner.
On December 3, USCA wrote a letter to Secretary of the Treasury Steven Mnuchin requesting a review of Marfrig Global Foods’ acquisition of nearly 81.7 percent of National Beef Packing Company, a member of America’s “Big Four” packers. Marfrig acquired 51 percent of National Beef in 2018 for $969 million, bumping the Brazilian packer to the second largest in the world, only behind neighboring JBS SA. This acquisition allowed Marfrig Global Foods new market access to South Korea and Japan, countries that had seized Brazilian beef imports upon news of meat inspector bribery and tainted meat, USCA explained in the letter.
Just last month, Marfrig announced another acquisition that would increase their majority shareholding to nearly sole ownership of American-based National Beef for the price of $860 million.
USCA is “firmly opposed” to any further consolidation in America’s meatpacking industry. Today, four major companies control nearly 80 percent of America’s slaughter capacity, two of which are majority owned by Brazilian companies. Beyond consolidation, USCA said foreign investment in America’s agricultural interests is a concerning pattern.
“Today, nearly 30 million acres of U.S. agricultural land is held by foreign investors. Once Americans lose out on that capacity – whether it be land, feedlots, meat processing facilities, or other resources – it may be that we will never have the opportunity to buy it back,” Graner said. “In short, the growing trend of foreign interests acquiring U.S. agricultural resources jeopardizes the ability of our nation to feed itself. In our view, this is a direct threat to our democracy.”
Brazil’s bad rap goes beyond bribery scandals. The USDA banned importation of Brazilian beef in 2017 due to “recurring concerns about the safety of the products intended for the American market,” according to an agency press release.
“USCA believes this near ownership investment of a U.S. based meatpacking company by a foreign corporation threatens national security interests by unnecessarily risking the safety of our nation’s food supply,” the group wrote. “Brazil has proven time and time again to wholly reject the food safety standards that U.S. regulators have put in place to ensure not only the health of the domestic livestock herd, but also the safety of its citizens.”
USCA’s request isn’t the first of its kind. Just one month before Marfrig’s most recent acquisition, Senator Bob Menendez (D-NJ) and Senator Marco Rubio (R-FL) requested Secretary Mnuchin to order a review of JBS SA. The pair of Senators asked that the Committee on Foreign Investment in the United States (CFIUS) “assess the implications for security and safety of America’s food supply and, in turn, our national security.”
USCA requested CFIUS conduct a full review of Marfrig Global Foods’ acquisition of National Beef and asked that the outcome be “explicitly written out and publicly published.”
In urging Secretary Mnuchin and CFIUS to conduct the investigation, Graner said it would “fulfill President Donald Trump’s campaign promise to put America first by ensuring the long-term sustainability of America’s farming and ranching families.”BACK