[Federal Register Volume 65, Number 58 (Friday, March 24, 2000)]
[Notices]
[Pages 15982-16033]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 00-4591]



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Part III





Department of Justice





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Antitrust Division



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United States v. Cargill, Incorporated; Public Comment and Plaintiff's 
Response; Notice

  Federal Register / Vol. 65, No. 58 / Friday, March 24, 2000 / 
Notices  

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DEPARTMENT OF JUSTICE

Antitrust Division

[Civil No. 98-CV-1875 (GK)]


United States v. Cargill, Incorporated; Public Comment and 
Plaintiff's Response

    Pursuant to the Antitrust Procedures and Penalties Act, 15 U.S.C. 
16(b)-(h), the United States of America hereby publishes below the 
comments received on the proposed Final Judgment in United States v. 
Cargill, Incorporated and Continental Grain Company, Civil No. 98-CV-
1875 (GK), filed in the United States District Court for the District 
of Columbia, together with the Untied States' response to the comments.
    Copies of the comments and response are available for inspection in 
Room 215 of the U.S. Department of Justice, Antitrust Division, 325 
Seventh Street, NW, Washington, DC 20530 (telephone: 202/514-2481) and 
at the office of the Clerk of the United States District Court for the 
District of Columbia, 333 Constitution Avenue, NW, Washington, DC 
20001. Copies of these materials may be obtained upon request and 
payment of a copying fee.

Constance K. Robinson,
Director of Operations, Antitrust Division.

UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLUMBIA

    In the matter of: United States of America, Plaintiff, v. 
Cargill, Incorporated, and Continental Grain Company, Defendants, 
Civil Action No. 99-1875 (GK).

UNITED STATES RESPONSE TO PUBLIC COMMENTS

    Communications with respect to this document should be addressed 
to: Roger W. Fones, Chief; Donna N. Kooperstein, Assistant Chief; 
Robert L. McGeorge, Michael P. Harmonis, Attorneys; Transportation, 
Energy & Agriculture Section, Antitrust Division, U.S. Department of 
Justice, 325 Seventh Street, NW, Washington, DC 20530, (202) 307-
6361.
February 11, 2000.

Table of Contents

I. Factual Background
    A. The Parties To The Transaction
    B. The Proposed Acquisition
    C. The Complaint
    D. The Proposed Settlement
    E. Compliance With Antitrust Procedures And Penalties Act
II. Legal Standard Governing The Court's Public Interest 
Determination
III. Summary Of Public Comments
IV. The Department's Analysis Of The Transaction
    A. The Relevant Merger Law
    B. Framework For The Department's Competitive Analysis
    1. Monopoly Analysis
    2. Monopsony Analysis
    C. Overview Of The Department's Analysis Of Competitive Issues 
In This Transaction
    1. Background
    2. Analysis Of Cargill As A Seller Of Standard-Grade Grain 
Products
    3. Analysis Of Cargill As A Seller Of Specialty Products
    4. Analysis Of Cargill As A Buyer Of Grain
    5. Analysis Of Cargill As An Operator Of River Elevators 
Designated By CBOT For Settlement Of Futures Contracts
    6. Summary Of The Department's Competitive Analysis
V. The Department's Responses To Specific Comments
    A. Remedy
    B. Market Definition
    C. Cargill's Power Over Price
    D. Futures Markets
    E. Specialty Markets
    F. Nebraska Grain Markets
    G. Concentration In Other Agriculture Markets
    H. Ban On All Agribusiness Mergers
    I. Vertical Integration
    J. Non-Economic Concerns
    K. Administration And Legislative Actions
    L. The OCM Comments
    M. A Hearing Is Unnecessary In This Case
    N. The 60-Day Comment Period Should Not Be Extended
Conclusion

United States Response to Public Comments

    Pursuant to the Antitrust Procedures and Penalties Act, 15 U.S.C. 
16(b) (``AAPA''), plaintiff, the UNITED STATES OF AMERICA, acting under 
the direction of the Attorney General, hereby files comments received 
from members of the public concerning the proposed Final Judgment in 
this civil antitrust suit and the Response of the United States to 
those comments.

I. Factual Background

A. The Parties to the Transaction

    Cargill, Incorporated (``Cargill'') and Continental Grain Company 
(``Continental'') are grain traders. They employ grain distribution 
networks--primarily composed of country elevators, rail terminals, 
river elevators, and port elevators--to buy grain from farmers and 
other suppliers, store it, and move it to their domestic and foreign 
customers. In addition, both firms are engaged in related businesses 
such as grain processing and cattle feeding.

B. The Proposed Acquisition

    On October 9, 1998, Cargill entered into an agreement with 
Continental to acquire its gain trading business (conducted by 
Continental's Commodity Marketing Group). Cargill is not acquiring 
Continental's processing or finance divisions, which Continental will 
continue to operate as independent businesses after Cargill's 
acquisition of its grain trading business.

C. The Complaint

    On July 8, 1999, the United States Department of Justice (the 
Department) filed a Complaint with this Court alleging that Cargill's 
acquisition of Continental's Commodity Marketing Group would 
substantially lessen competition for grain purchasing services in nine 
relevant markets, in violation of Section 7 of the Clayton Act (15 
U.S.C. 18). In those markets, Cargill would have gained the power to 
artificially depress the prices paid to U.S. farmers and other 
suppliers for their grain and oilseed crops--including corn, soybeans, 
and wheat (collectively referred to as ``grain'').
    The Complaint also alleged that the transaction would have resulted 
in Cargill and one other grain company controlling approximately eighty 
percent of capacity at the Chicago and Illinois River elevators that 
are authorized by Chicago Board of Trade (CBOT) to accept delivery for 
the settlement of corn and soybeans futures contracts.\1\ That 
concentration would have increased the risk of manipulation of futures 
prices.
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    \1\ For corn futures contracts, CBOT-authorized delivery points 
are located in Chicago and on the Illinois River as far south as 
Peoria; for soybean contracts, these facilities are in Chicago and 
along the entire length of the Illinois River.
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    Finally, the Complaint alleged that a non-compete provision of the 
Cargill/Continental agreement was a division of markets in violation of 
Section 1 of the Sherman Act, 15 U.S.C. 1. Because the Cargill/
Continental acquisition agreement prohibited Continental from re-
entering the grain distribution business for five years, the Complaint 
charged that it gave Cargill more time than would be reasonably 
necessary to gain the loyalty of former Continental suppliers and 
customers, and therefore, the agreement constituted an unlawful 
division of markets.

D. The Proposed Settlement

    The Department, Cargill, and Continental filed a joint stipulation 
for entry of a proposed Final Judgment settling this action on July 8, 
1999. In each of the nine markets where the Department has determined 
that the consolidation of competing Cargill and Continental grain 
elevators would give grain companies the power to artificially depress 
the price of grain that they pay farmers and other suppliers, the Final 
Judgment requires the divesture of either the Cargill grain elevator or 
the Continental grain elevator serving that

[[Page 15983]]

market. The Final Judgment also requires divestitures of elevators on 
the Illinois River to ensure that concentration among firms controlling 
CBOT-authorized delivery points does not provide opportunities for 
manipulation of CBOT corn and soybean futures contracts.
    Continental's divestitures to preserve competition for the purchase 
of grain from farmers and other suppliers include:

     Its river elevator at Lockport, Illinois;
     Its river elevator at Caruthersville (Cottonwood 
Point), Missouri;
     Its rail elevator at Salina, Kansas;
     Its rail elevator at Troy, Ohio;
     Its port elevator at Stockton, California; and
     Its port elevator at Beaumont, Texas.

    Prior to entering into the proposed Final Judgment, Continental 
also terminated its minority interest in a river elevator at Birds 
Point, Missouri. Accordingly, no divestitures were required to protect 
competition in this market.
    In order to protect against manipulation of CBOT futures markets, 
Continental was required to divest its Chicago port elevator.\2\
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    \2\ Continental's divestiture of its Lockport river elevator is 
a remedy for concentration among authorized CBOT delivery stations, 
as well as remedy for concentration among grain buyers in that area.
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    Cargill's divestitures to preserve competition for the purchase of 
grain from farmers and other suppliers were:

     Its river elevator at East Dubuque, Iowa;
     Its river elevator at Morris, Illinois; and
     Its port elevator at Seattle, Washington (with the 
option to retain its port elevator at Seattle if it does not acquire 
the Continental port elevator at Tacoma).

    In addition, the Final Judgment requires Cargill to enter into a 
throughput agreement making one-third of the daily loading capacity at 
its Havana, Illinois River elevator available to an independent grain 
company to avoid undue concentration among firms controlling CBOT 
delivery points.\3\
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    \3\ Cargill's divestiture of its Morris facility serves to 
protect against CBOT concentration problems, as well as 
concentration among buyers of grain in that market.
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    The proposed Final Judgment also prohibits Cargill from acquiring 
any interest in the facilities to be divested by Continental pursuant 
to the proposed Final Judgment or the river elevator at Birds Point, 
Missouri in which Continental formerly held a minority interest.
    Finally, the proposed Final Judgment prohibits the non-compete 
provision of the Cargill/Continental agreement from remaining in force 
for more than three years.

E. Compliance With Antitrust Procedures and Penalties Act

    To date, the parties have compiled with the provisions of the 
Antitrust Procedures and Penalties Act as follows:
    (1) The Complaint and proposed Final Judgment were filed on July 8, 
1999;
    (2) Defendants filed settlement pursuant to 15 U.S.C. 16(g) on July 
19, 1999.
    (3) The Competitive Impact Statement (``CIS'') was filed on July 
23, 1999;
    (4) The proposed Final Judgment and CIS were published in the 
Federal Register on August 12, 1999, 64 F.R. 44,046 (1999);
    (5) A summary of the terms of the proposed Final Judgment and CIS 
was published in the Washington Post, a newspaper of general 
circulation in the District of Columbia, for seven days during the 
period August 10, 1999 through August 16, 1999;
    (6) The sixty-day period specified in 15 U.S.C. 16(b) commenced on 
August 12, 1999 and terminated on October 12, 1999;
    (7) The United States hereby files the comments of members of the 
public and the Nebraska Attorney General's amicus brief (bound 
separately as Appendix A) together with the Response of the United 
States to the comments and brief, pursuant to 15 U.S.C. 16(b); and
    (8) The United States will move this Court for entry of the Final 
Judgment after the comments and the Response are published in the 
Federal Register. The Final Judgment cannot be entered before the 
publication. 15 U.S.C. Sec. 16(d).

II. Legal, Standard Governing the Court's Public Interest 
Determination

    Upon the publication of the public comments and this Response, the 
United States will have fully compiled with the APPA. After receiving 
the United States' motion for entry of the proposed Final Judgment, the 
Court must determine whether it ``is in the public interest.'' 15 
U.S.C. 16(e). In doing so, the Court must apply a deferential standard 
and should withhold its approval only under very limited conditions. As 
Judge Greene observed in the AT&T case:

    If courts acting under the Tunney Act disapproved proposed 
consent decrees merely because they did not contain the exact relief 
which the court would have imposed after a finding of liability, 
defendants would have no incentive to consent to judgment and this 
element of compromise would be destroyed. The consent decree would 
thus as a practical matter be eliminated as an antitrust enforcement 
tool, despite Congress' directive that it be preserved.

United States v. American Tel. & Tel. Co., 552 F. Supp. 131, 151 
(D.D.C. 1982), aff'd mem. sub nom. Maryland v. United States, 460 U.S. 
1001 (1983).
    The United States Court of Appeals for the District of Columbia has 
noted that ``constitutional questions * * * would be raised if courts 
were to subject the government's exercise of its prosecutorial 
discretion to non-deferential review.'' Massachusetts Sch. of Law at 
Andover, Inc. v. United States, 118 F.3d 776, 783 (D.C. Cir. 1997) 
(citing United States v. Microsoft Corp., 56 F.3d 1448, 1457-59 (D.C. 
Cir. 1995). Rather, the district court should review the proposed Final 
Judgment ``in light of the violations charged in the complaint and * * 
* withhold approval only [a] if any of the terms appear ambiguous, [b] 
if the enforcement mechanism is inadequate, [c] if third parties will 
be positively injured, or [d] if the decree otherwise makes `a mockery 
of judicial power.' '' Id. at 783 (quoting Microsoft at 1462).
    With this standard in mind, the Court should review the comments of 
members of the public concerning the proposed Final Judgment and the 
United States' Response to those comments. As this Response makes 
clear, entry of the proposed Final Judgment is in the public interest.

III. Summary of Public Comments

    Sixty-seven individuals, eight public officials, and nineteen 
organizations expressed their views on the proposed Final Judgment. 
These comments and questions are summarized below.
    Sixty-five individual farmers filed comments. Some are disappointed 
because they believe the transaction does nothing to raise the prices 
they receive when they sell their grain. Others are concerned that the 
markets in which they sell their grain have become so concentrated that 
the grain companies will be able to depress prices paid to farmers for 
their grain. Still others are concerned that Cargill will be able to 
monopolize ``specialty or niche'' markets or lessen competition in 
grain futures markets. Finally, some of the commenting farmers believe 
there should be a complete ban on mergers and acquisitions in the 
agribusiness sector.
    Congresswoman Jo Ann Emerson, Missouri Attorney General Jeremiah 
Nixon, and several farm organizations, including the Missouri Farm 
Bureau Federation, Missouri Soybean Association, and Permiscot County 
Farm Bureau, addressed their comments to Section IV(D) of the proposed 
Final Judgment, which directs Continental to divest its river elevator 
at Cottonwood Point, Missouri, near Caruthersville. After noting that 
Bunge Corp. is one of

[[Page 15984]]

the major grain purchasers in the vicinity of Cottonwood Point, these 
commentators urge the Department of Justice not to permit divestiture 
of the Cottonwood Point facility to Bunge.
    New Mexico Attorney General Patricia Madrid has no opposition to 
the proposed Final Judgment, although she is concerned about there 
being one less significant competitor in the national grain trading 
market after the transaction. Attorney General Madrid, therefore, urges 
the Department to actively advocate administrative and legislative 
actions that will invigorate competition in the agricultural sector of 
our economy.
    Minnesota Attorney General Mike Hatch believes the proposed Final 
Judgment does not go quite far enough to ameliorate antitrust concerns 
raised by the transaction. He is concerned that grain markets are 
already too highly concentrated and that agriculture industries, in 
general, are experiencing high rates of vertical consolidation. Under 
the circumstances, Attorney General Hatch recommends that the proposed 
Final Judgment be modified to prohibit Cargill from acquiring any other 
of its competitors in grain export, transport, and storage markets.
    Nebraska and South Dakota Attorneys General Don Stenberg and Mike 
Barnett the issue with the relevant geographic markets as defined in 
the Complaint. They believe the Department of Justice should not have 
focused on overlapping draw areas for country, rail, river or port 
areas, but rather suggest the relevant market should be enlarged to 
include the entire United States or even the rest of the world. Given 
that Cargill and Continental are two of our nation's largest grain 
trading companies, these--Attorneys General are of the view that the 
two firms should not be permitted to merge under any circumstances. In 
addition, Attorney General Stenberg's comments in his amicus brief 
mirror many of the concerns expressed by the Organization for 
Competitive Markets, discussed infra.
    North Dakota Attorney General Heidi Heitkamp filed a comment 
expressing her appreciation for the ways in which this law suit has 
preserved competition for farmers at the local level in North Dakota. 
She, nevertheless, remains concerned about powerful concentrations of 
agribusiness firms that North Dakota farmers must face. Based on that 
concern, she suggests that the Department should reconsider the 
adequacy of divestitures required by the proposed Final Judgment and 
instead, seek to enjoin the transaction in its entirety. In particular, 
Attorney General Heitkamp thinks the time has come to rethink antitrust 
analysis in the farm sector to give greater consideration to non-
economic concerns.
    John W. Helmutch, an agricultural economist, filed a comment that 
set forth his suggested analytical framework for the Department's use 
in analyzing the transaction. In his view, it is essential for the 
Department to assess market concentration, the extent of information 
available to grain traders and farmers in the market, and the potential 
adverse competitive effects on grain futures markets and other 
agribusinesses beyond grain trading, such as livestock markets. Mr. 
Helmuth asks if we have made these assessments.
    A.V. Krebs believes the Department's analysis is deficient because 
it fails to consider whether the transaction will permit Cargill to 
force its own standards, practices, marketing arrangements, and prices 
on farmers, processors, and merchandisers in grain markets throughout 
the United States.
    Professor C. Robert Taylor of Auburn University is concerned that 
the Department did not adequately consider the extent of vertical 
integraiton in the agricultural sector. Minnesota and Nebraska 
Attorneys General Mike Hatch and Don Stenberg and Catholic Charities of 
Sioux Cit, Iowa voice the same concernin their comments.
    Jon Lauck, writing on behalf of the Organization for Competitive 
Markets (``OCM''), filed a comment that was critical of the 
Department's analysis in several respects. OCM states that the 
Department's analysis failed to consider: (1) The impact of 
concentration in agriculture markets other than grain buying; (2) the 
continuing potential for anticompetitve behavior in the post-merger 
market; (3) whether the divested facilities will continue to be 
competitive forces in the hands of new owners, particularly if the new 
owners do not have a ``network'' of elevators that buy grain; (4) the 
impact on potential entry into grain buying markets; (5) the 
ramifications of competition in overseas grain markets; (6) the 
implications of economic disorganization of farmers which can be 
exploited by powerful buyers; (7) information disparities in 
agriculture markets; (8) the lack of benefits of the merger; (9) a 
range of statutes that Congress intended courts to consider when making 
decisions about agriculture markets; and (10) that the consent decree 
risks leaving farmers without an effective outlet for legal redress. 
OCM's conclusion is that the proposal Final Judgment is not an adequate 
remedy and that the transaction should be prohibited in its entirety.
    Several farm, rural-life, and religious groups voice concerns about 
general levels or market concentration in agriculture industries. These 
groups include the American Agriculture Movement, Animal Welfare 
Institute, Clean Water Action Alliance, Farmland Co-op Inc., Institute 
for Agriculture and Trade Policy (``IATP''), Kansas Cattlemen's 
Association, Minnesota Catholic Conference, National Catholic Rural 
Life Conference, and the Office of Hispanic Ministry. In the main, they 
believe the Department's analysis does not adequately consider 
concentration in agriculture markets beyond grain buying. In their 
view, these non-grain markets are already too concentrated, and so 
Cargill ought not be permitted to acquire Continental under any 
circumstances.
    The Kansas chapter of the National Farmers Organization (NFO) 
expressed concern about declining grain ``basis levels.'' Thus, they 
are concerned that Kansas farmers will receive lower prices for their 
grain after the transaction. The Kansas NFO did not address the 
adequacy of the proposed Final Judgment.
    National Farmers Union (``NFU'') filed comments opposing the 
transaction because the transaction does not increase competition in 
grain markets. NFU also believes the proposed Final Judgment is 
deficient because it does not ensure that divested facilities will 
remain competitive. NFU also believes the proposed Final Judgment fails 
to address the roles played by Cargill and Continental in export 
markets.
    Rural Life Office of Dorchester, Iowa expressed concern that the 
transaction may facilitate Cargill's exercise of market power in 
``organic and specialty'' markets.
    Women Involved in Farm Economics (``WIFE'') is concerned that the 
transaction as proposed, by unifying the second and third largest grain 
traders in Nebraska, might depress grain prices to Nebraska farmers and 
permit Cargill to control their export market. WIFE did not object to 
the proposed Final Judgment.

IV. The Department's Analysis of the Transaction

    We begin our response to public comments with an overview of the 
legal standards for analyzing mergers and acquisitions, our 
investigation of Cargill's proposed acquisition of Continental's 
commodity marketing business, and our analysis of the relevant 
competitive issues in this case. Thereafter, we respond to specific 
points raised by commentators.

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A. The Relevant Merger Law

    Section 7 of the Clayton Act, 15 U.S.C. 18, prohibits mergers and 
acquisitions whose effect may be substantially to lessen competition 
``in any line of commerce * * * in any section of the country.'' The 
purpose of Section 7 is to prevent acquisitions or mergers before they 
create harm. `` `The intent here * * * [is] to cope with monopolistic 
tendencies in their incipiency and well before they have attained such 
effects as would justify a Sherman Act proceeding.' '' Brown Shoe Co. 
v. United States, 370 U.S. 294, 318 n. 32 (1962) (quoting S. Rep. No. 
81-1775 at 4-5).
    The antitrust laws apply to the exercise of market power over 
sellers (monopsony power), just as they do to the exercise of market 
power over buyers (monopoly power).\4\ See Mandeville Island Farms v. 
American Crystal Sugar Co. 334 U.S. 219, 235-44 (1948) (a case arising 
under Sections 1 and 2 of the Sherman Act). Section 7, in particular, 
applies to monopsony power gained via acquisitions or mergers. See 
United States v. Rice Growers Ass'n of California, 1986 WL 12562 (E.D. 
Cal. 1986) (acquisition by one miller of another found to lessen 
competition in purchase of California paddy rice); United States v. 
Pennzoil Company, 252 F. Supp. 962, 981-985 (W.D. Pa. 1965), (merger 
found to lessen competition in purchase of Penn Grade crude oil).
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    \4\ As noted in the U.S. Department of Justice/Federal Trade 
Commission's Horizontal Merger Guidelines Sec. 0.1 (issued 1992, 
revised 1997): ``The unifying theme of the Guidelines is that 
mergers should not be permitted to create or enhance market power or 
to facilitate its exercise. Market power to a seller is the ability 
profitably to maintain prices above competitive levels for a 
significant period of time * * * Market power also encompasses the 
ability of a single buyer (a `monopsonist'), a coordinating group of 
buyers, or a single buyer, not a monopsonist, to depress the price 
paid for a product to a level that is below the competitive price * 
* *''
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    To predict whether an acquisition may substantially lessen 
competition or tend to create a monopoly, the reviewing court must 
determine: (a) The ``line of commerce'' or product market in which to 
assess the transaction, (b) the ``section of the country'' or 
geographic market in which to assess the transaction, and (c) the 
acquisition's probable effect on competition in the product and 
geographic markets. The probable effect often can be assessed by 
determining the level of concentration based on the market shares of 
the parties to the proposed transaction and their competitors in the 
product and geographic markets. See United States v. Philadelphia 
National Bank, 374 U.S. 321, 362-63 (1963).

B. Framework for the Department's Competitive Analysis

    As the case law suggests, the core issue in competition analysis is 
whether the proposed transaction likely would create or enhance market 
power or facilitate its exercise. This investigation focused on both 
monopoly and monopsony issues (that is, whether Cargill would likely 
gain market power through its acquisition of Continental's grain 
trading business in its roles as a seller or as a buyer of grain).
1. Monopoly Analysis
    The Horizontal Merger Guidelines, which outlines the Department's 
enforcement policy for horizontal acquisitions and mergers subject to 
Section 7 of the Clayton Act, define market power in monopoly 
situations as the ability of a seller profitably to maintain prices 
above competitive levels (or to reduce quality or service below 
competitive levels) for a significant period of time. Horizontal Merger 
Guidelines at Sec. 0.1. An acquisition can facilitate the exercise of 
market power by increasing the likelihood of coordinated interaction 
among competing firms or by creating a market structure in which firms 
find it profitable to unilaterally raise prices or reduce output. See 
id. at Sec. 2.
    To determine whether the proposed acquisition would create, enhance 
or facilitate the exercise of market power, Department staff first had 
to define the markets within Cargill and Continental compete. Under the 
Horizontal Merger Guidelines, a market is defined as a set of products 
or services within a geographic area such that a hypothetical 
monopolist could profitably impose a ``small but significant and 
nontransitory'' price increase or decrease. Id. at Sec. 1.0.
    If the evidence shows that a hypothetical monopolist of any given 
product or service profitably could impose such a price increase, that 
product or service is defined as the relevant product market. Id. at 
1.11. If, on the other hand, the evidence shows that a sufficient 
number of customers would substitute other products or services to make 
such a price increase unprofitable, those products or services are also 
included in the product market. Id. This process continues until a 
group of products or services is identified for which a small but 
significant and nontransitory price increase would be profitable. Id.
    Similarly, if the evidence shows that a hypothetical monopolist of 
the relevant product or service could impose such a price increase in 
any given region, that region is defined as the relevant geographic 
market. Id. at 1.21. If, on the other hand, the evidence shows that a 
sufficient number of customers would switch to products or services 
provided at locations outside the region to make such a price increase 
unprofitable, those locations are also included in the geographic 
market. Id. This process continues until a group of locations is 
identified for which a small but significant and nontransitory price 
increase would be profitable. Id.
    Once the relevant product and geographic markets are defined, 
Department staff must evaluate the competitive impact of the proposed 
acquisition. A merger is likely to be problematic if the merged firms 
are two of a relatively small number of sellers in the market. Under 
these circumstances, the merged firm may gain unilateral power to raise 
prices, or the existence of only a few other firms in the market may 
facilitate tacit collusion.
2. Monopsony Analysis
    As a general proposition, the analysis of competitive issues in 
monopsony cases is the mirror image of the more common analysis of 
competitive issues in monopoly cases.\5\ For example, instead of 
determining whether the merging firms are two of a small number of 
sellers in the relevant product and geographic market, and whether the 
merged firm would gain sufficient market power to raise prices to 
consumers, monopsony analysis focuses on whether the merging firms are 
two of a small number of buyers in the relevant product and geographic 
market, and whether the merged firm would gain sufficient market power 
to depress prices paid to its suppliers. Likewise, instead of 
determining whether the buyers could defeat an attempt by a monopolist 
to increase prices by a small but significant and non-transitory amount 
by switching to alternative products or alternative suppliers, the 
issue in a monopsony investigation is whether the sellers could defeat 
an attempt by a monopsonist to depress prices by producing other 
products or by selling their products to more distant buyers.
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    \5\ As noted in Section 0.1 of the Horizontal Guidelines: ``The 
exercise of market power by buyers (`power') has adverse effects 
comparable to those associated with the exercise of market power by 
sellers. In order to assess potential monopsony concerns, the Agency 
will apply an analytical framework analogous to the framework of 
these Guidelines.''

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[[Page 15986]]

C. Overview of the Department's Analysis of Competitive Issues in This 
Transaction

1. Background
    Cargill and Continental are international grain traders, and so the 
Department's investigation encompassed grain markets throughout the 
world. In the course of this investigation, conducted by a team of 
approximately twenty lawyers, paralegals, and economists, the 
Department's staff: reviewed over 400 boxes of documents furnished by 
Cargill and Continental pursuant to our second request discovery 
procedures; deposed Cargill and Continental executives; reviewed 
relevant legal and economic literature; consulted with officials of the 
Department of Agriculture, the Commodity Futures Trading Commission, 
and state attorney general offices; and interviewed over one hundred 
farmers, farm organization officials, agricultural economists, grain 
company executives, and other individuals with knowledge of the 
industry and competitive conditions.
    The Department's staff found that grain typically moves from farms 
to country elevators, from which it moves to river elevators and rail 
terminals, and then to domestic purchasers or to port elevators for 
export to the rest of the world. We found that Cargill and Continental 
often compete with each other at various stages of their grain 
distribution networks as they buy, store, distribute, and sell 
agricultural commodities. Accordingly, the investigation encompassed 
all aspects of their worldwide grain businesses in order to identify 
any portions of their respective grain distribution networks where they 
compete with each other.
    In our investigation, we focused on the use of these grain 
distribution networks to facilitate four different aspects of the grain 
business:
    1. Selling standard grades of grain (Primarily, corn, wheat and 
soybeans);
    2. Selling less widely-traded grain products (super commodities, 
special commodities, and other niche products);
    3. Buying grain; and
    4. Providing elevator services at delivery facilities that are 
designated by the CBOT for the settlement of corn and soybean futures 
contracts.
    As to the first two categories, the investigation indicated that 
the transaction would not create market power in the sale of these 
products; and very few of the public comments dealt with these aspects 
of the grain business. Most of the comments concerned the Department's 
conclusions on the third and fourth aspects of the Cargill and 
Continental grain businesses.
2. Analysis of Cargill as a Seller of Standard-Grade Grain Products
    Cargill and Continental compete in a national (or international) 
market in their roles as sellers of standard agricultural commodities. 
Although they are big grain companies in absolute terms, they have 
relatively small shares of the output markets in which they compete. 
One way to assess concentration among grain traders is grain storage 
capacity.\6\ By this measure of concentration, collectively they had 
less than eight percent of total U.S. off-farm grain storage capacity--
before the divestitures required by the Final Judgment.\7\
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    \6\ Market share data is difficult to obtain and not entirely 
reliable in this industry. One limitation of this measure of 
concentration is the ``double counting'' problem that occurs when a 
firm handles the same bushel of grain several times--for example, 
when it buys wheat at a country elevator, transfers it to its rail 
terminal and subsequently its flour mill, and sells it to a baker.
    \7\ See section V(B) of this Response.
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    Food processors, cattle feeders, and other buyers of agricultural 
commodities rely upon competition among a fairly large number of big 
grain companies with nationwide grain distribution networks and nearby 
regional grain companies to ensure competitive prices. Commodity prices 
tend to be fairly consistent in grain companies' output markets 
throughout the country when adjusted for transportation costs. With 
these competitive conditions, it was not surprising that the officials 
from cereal companies, bakers, and other buyers of wheat, corn, and 
soybeans whom we interviewed consistently indicated that they thought 
the transaction would not give Cargill the power to raise prices for 
standard commodities.
    In summary, our investigation determined that the relevant 
geographic market for grain companies' sale of grain is at least as 
broad as the national market. With a combined Cargill/Continental share 
of less than eight percent of that market, it is highly unlikely that 
this transaction could create or enhance market power for sellers of 
these commodities to any appreciable degree.
3. Analysis of Cargill as a Seller of Speciality Products
    Although we concluded that this transaction would not give Cargill 
or other grain companies market power as a seller of standard grade 
grain products, we considered the possibility that Cargill and 
Continental might be two of a relatively small number of sellers of 
less widely-traded commodities and that the consolidation of these 
business might give Cargill market power as a seller of these products. 
Niche grain products include super commodities (crops with specific 
characteristics, such as high oil content corn), special commodities 
(crops that are not widely traded, such as white corn), and organic 
crops.
    Our investigation determined, however, that there are no niche 
product market sin which Cargill and Continental are two of a 
relatively small number of competitors. Consequently, we concluded that 
the transaction will not create opportunities for Cargill to gain 
sufficient market power to raise the prices on any of the niche 
products that it sells.
4. Analysis of Cargill as a Buyer of Grain
    Although Cargill and Continental compete for the sale of grain in 
national and international markets, our investigation revealed that 
they compete for the purchase of grain in relatively small local or 
regional markets. Shipping grain by truck is relatively costly and 
time-consuming. Farmers, therefore, tend to truck their grain within 
limited geographic areas surrounding their farms--usually to buyers who 
operate nearby country elevators or to buyers who operate river, rail 
or port elevators if their farms are fairly close to those facilities. 
Operators of river elevators and rail terminals may transport grain 
farther distances to buyers who operate port elevators and domestic 
processing plants--reflecting the relatively low cost of transporting 
bulk commodities long distances by rail or barge as compared with truck 
transportation. The draw area of one grain company's country, river, 
rail or port elevator overlaps the ``draw area'' of a competing 
elevator if their facilities are close enough to each other so that the 
costs of shipping grain to the two elevators are not significantly 
different.
    During the course of our investigation, the Department reviewed 
every local or regional market in which Continental competed with 
Cargill for the purchase of grain before the transaction. Department 
staff began this process by identifying every geographic market in 
which Cargill and Continental operate facilities with overlapping draw 
areas.\8\ We then determined how many grain companies other than 
Cargill and

[[Page 15987]]

Continental operated grain elevators in each of those markets and 
conducted detailed and specific analyses of all of the approximately 
three dozen local or regional markets that are served by less than 
twelve grain company elevators. The analysis for each of these 
geographic markets included interviews of farmers, officials of farm 
organizations, independent elevator operators, and other people with 
knowledge of these local and regional markets, determinations of local 
or regional grain transportation costs, and other relevant information 
about competitive conditions in these markets. We concluded that 
sufficient numbers of competitive grain buyers would remain after the 
consolidation of the Cargill and Continental elevators in most of those 
local or regional markets to make it highly unlikely that grain 
companies could gain the power to depress the prices they pay for 
grain.
---------------------------------------------------------------------------

    \8\ At this stage of the process, we eliminated only the 
Continental elevators that are located so far away from the nearest 
Cargill elevator that it is inconceivable that the Continental 
elevator and nearest Cargill elevator might be drawing an 
appreciable amount of grain from the same farmers.
---------------------------------------------------------------------------

    In nine local or regional markets, however, farmers located within 
the overlapping Cargill/Continental draw areas depend on competition 
among Cargill, Continental, and only a few other grain companies to 
obtain a competitive price for their grain. Cargill's acquisition of 
Continental's elevators in these markets, therefore, could create 
sufficient market power to enable the few grain companies competing in 
those markets to depress grain prices.
    Sections VI and VII of the Complaint refer to these overlapping 
Cargill/Continental draw areas as ``captive draw areas.'' This term 
identifies highly concentrated markets in which Cargill and Continental 
are two of a relatively small number of grain buyers and in which the 
transaction is likely to create or enhance monopsony market power for: 
operators of port elevators in the Pacific Northwest port range; 
operators of port elevators in the central California port range; 
operators of port elevators in the Texas Gulf port range; operators of 
river elevators along the Illinois and Mississippi rivers; and 
operators of rail terminals in the vicinities of Salina, Kansas and 
Troy, Ohio.
    In order to prevent the loss of competition for the purchase of 
grain that would result from Continental's exit from these markets, the 
Department insisted that Cargill divest either its elevator or 
Continental's elevator in the markets to a new entrant who would 
operate the facility as a grain elevator and compete for the purchase 
of grain from farmers in the facility's draw area. Cargill and 
Continental have divested, or are in the process of divesting, the 
following facilities:
      
      
      

          Continental Facilities                      Acquirer
Lockport, IL river elevator...............  Louis Dreyfus Corporation.
Caruthersville, MO river elevator.........  Louis Dreyfus Corporation.
Salina, KN rail elevator..................  Declined to renew its lease.
Troy, OH rail elevator....................  Mennel Milling Company
 Beaumont, TX port elevator...............  Louis Dreyfus Corporation.
Stockton, CA port elevator................  Penny Newman Grain Co.
 Birds Point, MO river elevator 9.........  Terminated minority
                                             interest.
            Cargill Facilities                        Acquirer
East Dubuque, IL river elevator...........  Consolidated Grain & Barge.
Morris, IL river elevator.................  Louis Dreyfus Corporation.
Seattle, WA port elevator.................  Louis Dreyfus Corporation.
 
\9\ The proposed Final judgment does not require a divestiture of the
  Birds Points facility since Continental terminated its minority
  interest in that facility before the execution of that settlement
  agreement.

5. Analysis of Cargill as an Operator of River Elevators Designated by 
CBOT for Settlement of Futures Contracts
    Our investigation indicated that the acquisition would give Cargill 
and one other firm approximately 80% of the authorized delivery 
capacity for settlement of CBOT corn and soybeans futures contracts. In 
the light of these market shares and other market information, we 
determined that Cargill's acquisition of Continental would make it 
easier for Cargill unilaterally, or in coordination with the few 
remaining firms in the corn and soybean futures markets, to manipulate 
corn and soybean futures contracts in violation of section 7 of the 
Clayton Act.
    The divestitures of Continental's Lockport river elevator and 
Cargill's Morris river elevator are needed to prevent the loss of 
competitors that otherwise would have occurred as a result of 
consolidation among operators of delivery facilities authorized for the 
settlement of CBOT corn and soybean futures contracts. Further 
divestitures required by the Final Judgment to remedy these concerns 
include Continental's Chicago port elevator and one-third of the 
capacity of Cargill's river elevator at Havana, Illinois.
6. Summary of the Department's Competitive Analysis
    In summary, the Department found that Cargill's acquisition of 
Continental's Commodity Grain Marketing Group, as originally 
structured, would violate the antitrust laws. Cargill's acquisition of 
grain elevators in nine local or regional markets in which there are 
relatively small numbers of elevators operated by other grain companies 
would have created or enhanced the ability of grain companies to 
exercise monopsony powers in those geographic markets. Cargill's 
acquisition of Continental's CBOT-authorized delivery points would have 
resulted in undue concentration of these facilities and increased 
opportunities for manipulations of CBOT futures markets. And, the non-
compete provision of the Cargill/Continental agreement would have 
harmed competition by unduly restricting Continental's right to re-
enter the grain trading business in the future.
    The Department has concluded that the restructuring of the 
transaction as required by the proposed Final Judgment resolves these 
competitive concerns. The divestitures required by the Final Judgment 
should preserve the competitive conditions that existed before the 
acquisition and ensure that farmers in the affected markets will 
continue to have effective alternatives to Cargill when selling their 
crops. The entry of new operators of CBOT-authorized delivery stations 
should prevent manipulation of CBOT corn and soybean futures markets. 
And, the requirement that the non-compete provision of the Cargill/
Continental agreement remain in force for no more than three years 
should ensure that Cargill does not preclude continental's re-entry 
into the grain distribution business for longer than is required to 
give Cargill a fair opportunity to gain the loyalty of former 
Continental suppliers and customers.

V. The Department's Responses to Specific Comments

    We now turn to the comments that raise questions about our analysis 
or that suggest relief different or supplemental to that contained in 
the proposed Final Judgment. Copies of this Response without appendix 
are being mailed to all who filed comments.

A. Remedy

    Several commentators questioned whether the acquirers of the 
divested facilities would be competitive.\10\ The proposed Final 
Judgment sets forth procedures designed to ensure that the firms that 
acquire the divested facilities will vigorously compete to buy grain 
from farmers in their geographic markets.
---------------------------------------------------------------------------

    \10\ Minnesota Attorney General Mike Hatch, South Dakota 
Attorney General Mark Barnett, National Farmers Union, and Western 
Organization of Resource Councils.
---------------------------------------------------------------------------

    Pursuant to the proposed Final Judgment, Cargill and Continental 
provided widespread notice of the availability of the facilities that 
they were required to divest in newspapers

[[Page 15988]]

of general circulation, provided appropriate information concerning 
these facilities to prospective acquirers, and submitted reports to the 
Department concerning these inquiries and subsequent negotiations. They 
received over one hundred written expressions of interest in the 
facilities to be divested,\11\ and now have entered into definitive 
agreements to divest all of the facilities that they were required to 
transfer to new entrants under the terms of the Final Judgment.
---------------------------------------------------------------------------

    \11\ As a further indication of widespread interest in the 
divested facilities, the number of potential acquirers who obtained 
detailed information pursuant to confidentiality agreements ranged 
from thirteen (for the Seattle port elevator) to twenty-one (for the 
Morris and Caruthersville river elevators).
---------------------------------------------------------------------------

    To ensure that the new entrants have the capability to compete with 
Cargill and other incumbent grain companies in their markets, the 
United States reviewed the proposed divestiture agreements, obtained 
further information from the proposed acquirers, and conducted an 
independent investigation into the background and capabilities of the 
proposed acquirers. Under the Final Judgment, the United States has the 
sole right to disapprove any prospective acquirer if it concludes that 
the proposed acquirer might not operate the divested facility as part 
of a viable, ongoing business. The Department's investigation indicated 
that each of the proposed acquirers has the financial capability, 
expertise, and incentive to become a vigorous, independent competitor 
in the relevant market. Louis Dreyfus and Consolidated Grain & Barge 
are major grain companies who will use these acquisitions to expand 
into markets that they do not presently serve. Mennel and Penny Newman 
are smaller, but they are experienced grain traders who presented sound 
business plans for assimilating the Troy rail elevator and Stockton 
port elevator in their respective grain distribution businesses.
    In summary, the divested facilities will be controlled by new 
entrants with the background, expertise, and incentive to compete 
effectively for the purchase of grain produced in these markets. With 
these divestitures, therefore, it is not likely that this transaction 
will create or enhance the exercise of market power by Cargill or other 
grain companies enabling them to depress prices paid to farmers for 
their crops in any market.\12\
---------------------------------------------------------------------------

    \12\ Antitrust relief should `` `cure the ill effects of the 
illegal conduct, * * * assure the public freedom from its 
continuance,' * * * and it necessarily must `fit the exigencies of 
the particular case.' '' See Ford Motor Company v. United States, 
405 U.S. 562, 575 (1972) (quoting United States v. United States 
Gypsum, 340 U.S. 76, 88 (1950)) and International Salt Co. v. United 
States, 332 U.S. 392, 401 (1947)). The proposed Final Judgment meets 
these criteria by preserving competition in domestic grain markets, 
as it existed prior to the transaction. In the absence of any 
evidence to indicate that the transaction raises antitrust concerns 
elsewhere, there is no basis for prohibiting Cargill ``from 
acquiring any other direct competitors in grain export, transport, 
and storage markets,'' as suggested by Minnesota Attorney General 
Mike Hatch. If Cargill were to attempt to acquire competitors in 
additional markets, the Department will have the opportunity to 
investigate those acquisitions and to seek remedies for any 
transactions that violate the antitrust laws.
---------------------------------------------------------------------------

    For the divestitures required to forestall undue concentration 
among firms who control river elevators designated for the settlement 
of CBOT corn and futures contracts, the Department insisted on 
additional criteria. We required that the proposed acquires (Louis 
Dreyfus at Morris and Lockport, NIDERA at Chicago, and Prairie Central 
at Havana) demonstrate that they satisfy all requirements for obtaining 
CBOT designation as an authorized delivery point (including CBOT's 
financial standards) in addition to the criteria established for the 
other divestitures.
    Turning to one specific local market, Congresswoman Jo Ann Emerson, 
several farm groups, and one individual farmer in southeastern Missouri 
cautioned against allowing Bunge Corp, to acquire the Continental river 
elevator at Caruthersville (Cottonwood Point), Missouri because Bunge 
is already one of the major grain buyers in that local market.\13\ The 
United States agrees with their analysis. Bunge will not acquire that 
facility; instead it will be acquired by Louis Dreyfus.
---------------------------------------------------------------------------

    \13\ Missouri Farm Bureau Federation, Missouri Soybean 
Association, Pemiscot County Farm Bureau, and Clyde Southern.
---------------------------------------------------------------------------

B. Market Definition

    Several commentators argue that the United States failed to 
recognize that Cargill and Continental operate on a national scale and 
to realize that this transaction would concentrate the national grain 
market for the purchase and sale of grain.\14\ We believe that we used 
the correct market definitions in our competitive analysis.
---------------------------------------------------------------------------

    \14\ Nebraska Attorney General Don Stenberg, South Dakota 
Attorney General Mark Barnett, National Farmers Union, WIFE, and 
Reena Kazmann.
---------------------------------------------------------------------------

    Under standard antitrust analysis (as applied to monopsony cases), 
we determine the boundaries of relevant geographic markets by 
determining whether it would be profitable for the only buyer of grain 
in the geographic market to depress the price that farmers receive for 
their grain by a small, but significant, and non-transitory amount. In 
this case, the farmer's alternatives when he looks for buyers of his 
crops include the closest grain buyer and other buyers located 
relatively near the closest buyer.\15\ In most markets, we found that 
the additional trucking costs would preclude farmers from shipping 
their crops more than about twenty to thirty miles beyond the nearest 
grain elevator to get a small, but significant, increase in the price 
paid for his grain.
---------------------------------------------------------------------------

    \15\ The cost of shipping grain from farm to grain elevator is 
more relevant than the distance from farm to grain elevator, but 
cost and distance are roughly proportionate to each other in most 
cases.
---------------------------------------------------------------------------

    In this case, therefore, it was appropriate to focus our monopsony 
analysis on local or regional markets consisting of areas in which: (a) 
Cargill and Continental had elevators that were close enough to each 
other to compete for the purchase of grain originating in their 
overlapping draw areas; and (b) there were a relatively small number of 
competitors near enough to the Cargill and Continental facilities to be 
reasonable outlets for farmers located in the overlapping Cargill/
Continental draw areas. These are the markets in which the transaction 
could create market power if too few competitors remained after Cargill 
acquired nearby Continental grain elevators.
    Our investigation began with an examination of all local or 
regional markets in which Cargill and Continental operated grain 
elevators that were close enough together to compete for the purchase 
of grain from the same farmers. After eliminating the local or regional 
markets served by relatively large numbers of other grain company 
elevators, we found that Cargill and Continental were two of a 
relatively small number of grain companies who competed for the 
purchases of grain in nine local or regional markets and concluded that 
the transaction would have created monopsony market power in those 
markets.
    Not one of the comments that we received indicated that we 
overlooked a specific local or regional market in which the transaction 
was likely to create competitive problems. Instead, the commentators 
who said that we overlooked a relevant geographic market directed our 
attention to national, international or export markets.
    If the relevant geographic market were nationwide, we would have 
been forced to conclude that the transaction is not likely to lessen 
competition among grain buyers. Using total U.S. off-farm grain 
elevator capacity as a measure of market share in the grain 
distribution industry, Cargill had about a 5.7% share of the market and 
Continental about 1.2%

[[Page 15989]]

before the transaction (and before the combined capacity was reduced by 
the divestitures required under the Final Judgment).\16\ The combined 
share of less than eight percent of the market is far below any 
appropriate threshold for suggesting that this transaction is likely to 
significantly lessen competition among grain buyers. Thus, the combined 
Cargill/Continental share of the national grain market masks the 
anticompetitive effects of this transaction, as originally structured, 
at the local or regional level.
---------------------------------------------------------------------------

    \16\ The 1999 Grain & Milling Annual estimates total U.S. off-
farm grain storage capacity to be 7,938,190,000 bushels. Id. at 7. 
Cargill had total capacity of 452,399,560 bushels; Continental 
169,346,000 bushels. Id. at 21, 22. The combined Cargill/Continental 
capacity is 7.83% of total U.S. off-farm grain storage capacity.
---------------------------------------------------------------------------

    Other commentators suggest that the U.S. grain export market may be 
a relevant market.\17\ Cargill and Continental are two of the United 
States' largest agricultural exporters (with combined export market 
shares of about 40% for corn, 30% for soybeans, and 25% for wheat); 
but, U.S. export market shares are not meaningful indications of 
concentration in any relevant grain output market.The customers for 
Cargill and Continental U.S. grain exports (i.e., grain buyers in 
foreign countries) rely on competition among relatively large numbers 
of U.S. and foreign grain sellers. These sellers include Cargill, 
Continental, other big international grain traders, such as Bunge, 
Louis Dreyfus, Peavey (a division of ConAgra), and ADM, smaller 
regional grain traders, and (in most cases) their own domestic 
producers. With such large numbers of competing sellers in these 
markets, it is not likely that this transaction will create or enhance 
monopoly market power.
---------------------------------------------------------------------------

    \17\ Nebraska Attorney General Don Stenberg, South Dakota 
Attorney General Mark Barnett, National Farmers Union, and WIFE.
---------------------------------------------------------------------------

    Cargill and Continental port elevators were a major focus of our 
investigation, but not because of their impact on buyers in foreign 
markets. We devoted substantial efforts to the investigation of this 
level of the Cargill and Continental grain distribution networks 
because: (a) In several port ranges, they compete with each other for 
the purchase of grain from farmers and other suppliers in their port 
elevators' overlapping draw areas; and (b) there are relatively small 
numbers of other grain companies in some of those port ranges. In fact, 
we found competitive problems requiring the divestiture of four of 
Continental's six port elevators.

C. Cargill's Power Over Price

    Many of those who file documents are concerned that Cargill may 
have the power to depress grain prices paid to farmers after it 
acquires Continental.\18\ We too had that concern, and as explained in 
section IV of this memorandum, we concluded that the acquisition as 
originally proposed would have adversely affected farmers in local or 
regional markets who had no reasonable choice but to sell their grain 
to Cargill, Continental, and only a few other grain companies. As 
explained in section V(A) of this memorandum, the divestitures required 
by the proposed Final Judgment protect those farmers. Only if the Court 
were not to require the divestitures set forth in the proposed Final 
Judgment would grain companies gain the power to depress prices paid to 
farmers and other suppliers in these markets.\19\
---------------------------------------------------------------------------

    \18\ Nebraska Attorney General Don Stenberg, South Dakota 
Attorney General Mark Barnett, Animal Welfare Institute, National 
Catholic Rural Life Conference, and Office of Hispanic Ministry, 
Greta Anderson, Vivian Anderson, Kay Barnes, Isabelle Barth, Mary 
Beckrich, Amanda Bray, Loris von Brethorst, Marilyn Borchardt, Mike 
Callicrate, G.M. Carlson, Mary Casserand, Laurie Chancellor, Donald 
B. Clark, Roger and Shari Cummings, Peggy B. Daugherty, Lyman and 
Darline Denzer, Steve Dewell, C.K. Dresae, Llewellyn and Karen 
Engelhart, Dan and Judy Gotto, Bob Gregory, Mary Hargrafen, 
Minnesota AG Mike Hatch, Veron E. Heim, John W. Helmuth, Barbara 
Hook, Jeff Horejsi, Robin Kleven, Riley Lewis, Todd Lewis, Lawrence 
Marvin, Margot Ford McMillen, Darlene Milbradt, Winton Nelson, 
Jennifer Poole, Rae Powell, Lois Shank, Lyle D. Spencer, Ellen 
Stebbins, Elenor Steburg, Daniel J. Swartz, and Professor C. Robert 
Taylor.
    \19\ A.V. Krebs posed the question whether farmer and others who 
deal with Cargill will be forced to conform to Cargill's standards 
for marketing grain after the acquisition. The answer is no. The 
proposed Final Judgment ensures that the transaction will not create 
or enhance the ability of Cargill to exercise market power in 
domestic grain markets. Absent market power, Cargill cannot impose 
its will on the firms with whom it does business.
    Several individual farmers and the National Farmers Union oppose 
the acquisition because it will not have the effect of increasing 
prices or competition in grain markets. The goal of antitrust is to 
prevent transactions that would reduce existing competition. The 
antitrust laws provide no legal basis for using the power to 
challenge proposed mergers to increase competition in any market.
---------------------------------------------------------------------------

D. Futures Markets

    Several comments stated that the United States failed to consider 
the impact of the transaction on futures markets.\20\ In fact, we 
devoted considerable attention to that issue. Our analysis of the 
futures issue included reviews of all agricultural futures markets and 
economic literature on the subject, interviews of farmers, farm 
organization officials, grain company executives, and other people who 
rely on futures markets, and extensive consultations with officials 
from the Commodity Futures Trading Commission (CFTC).
---------------------------------------------------------------------------

    \20\ Minnesota Attorney General Mike Hatch, John W. Helmuth, and 
Keith Mudd.
---------------------------------------------------------------------------

    We concluded that the transaction, as originally structured, would 
have given Cargill and Archer Daniels Midland Co. (ADM) approximately 
eighty percent of the delivery capacity for the settlement of CBOT corn 
and soybean futures contracts, thereby increasing opportunities for 
manipulation of those futures markets. Under the transaction, as 
originally structured, Cargill would have acquired eight Continental 
elevators that were authorized to accept deliveries for the settlement 
of CBOT corn and soybean futures contracts. The proposed Final Judgment 
requires the divestiture of three CBOT-authorized delivery stations on 
the northern portion of the Illinois river--Continental's port elevator 
at Chicago, Continental's river elevator at Lockport, and Cargill's 
river elevator at Morris. In addition, Cargill is required to make one-
third of its loading capacity at a fourth facility--its Havana river 
elevator--available to an independent grain company under a throughput 
agreement in order to gain an additional facility on the southern 
portion of the Illinois River for the settlement of soybean futures 
contracts.
    During our review of the divestitures proposed by Cargill and 
Continental, we reviewed the prospective acquirers' backgrounds to 
ensure that they had the requisite financial and operational 
capabilities and incentives to become vigorous independent competitors. 
In cooperation with officials from the CFTC, we also obtained credible 
assurances that the acquirers could obtain CBOT authorization to accept 
deliveries in settlement of corn and soybean futures contracts. The 
Department concluded that the divestitures will leave sufficient CBOT-
authorized delivery capacity in the control of firms other than Cargill 
and ADM to protect against manipulation of CBOT corn and soybean 
futures markets.

E. Specialty Markets

    Several commentators indicated that the United States failed to 
consider whether the transaction would enable Cargill to monopolize 
speciality or niche commodity markets.\21\ As noted in section IV(B)(3) 
of this Response, we did study this issue, but our investigation

[[Page 15990]]

produced information showing that the transaction would not create or 
enhance market power in any markets for the purchase or sale of niche 
products (including super commodities, special commodities, and organic 
grain products).
---------------------------------------------------------------------------

    \21\ Minnesota Attorney General Mike Hatch, Rural Life Office, 
Office of Hispanic Ministry, and Roger and Shari Cummings.
---------------------------------------------------------------------------

    In summary, our investigation uncovered no niche product market in 
which Cargill and Continental were two of a relatively small number of 
buyers or sellers. Our investigation, which encompassed all niche 
products handled by either Cargill or continental, revealed that 
either: (a) They did not compete with each other before the transaction 
or (b) there were sufficient numbers of other grain companies in the 
market to deny Cargill the opportunity to gain monopoly or monopsony 
market power.

F. Nebraska Grain Markets

    Several members of the WIFE organization in Nebraska expressed 
concern about the ability of Cargill to depress prices paid to Nebraska 
farmers. As mentioned previously, the main focus of our competitive 
analysis was to determine whether the transaction was likely to create 
sufficient market power for Cargill to depress prices paid to farmers 
in any local or regional market. Since our preliminary investigation 
identified several markets in Nebraska in which Cargill and Continental 
compete for the purchase of grain, we devoted considerable attention to 
local markets within he state. After conducting numerous interviews 
with farmers and farm organizations in those areas, calculating local 
grain transportation costs, and considering other relevant competitive 
data, however, we concluded that there were no local markets in 
Nebraska in which Cargill and Continental were two of a relatively 
small number of competitors for the purchase of grain. In each Nebraska 
market where Cargill and Continental compete with each other for the 
purchase of grain, we found that there were sufficient numbers of 
alternative nearby buyers remaining after the Cargill/Continental 
consolidation to defeat any attempt by grain companies to depress 
prices paid to farmers in those areas. Accordingly, we did not seek 
divestitures of any grain elevators in Nebraska.

G. Concentration in Other Agriculture Markets

    Some comments express concern over concentration in markets other 
than grain--for example, markets pertaining to beef and pork packing, 
cattle feedlots, broiler and turkey production, animal feed plants, 
flour and corn milling, soybean crushing, and ethanol production.\22\ 
The comments suggest that the Department's analysis of the Cargill 
transaction may be deficient because it fails to give due consideration 
to these and other agriculture markets.
---------------------------------------------------------------------------

    \22\ Nebraska Attorney General Don Stenberg, AAM Inc., Clean 
Water Action Alliance, IATP, Kansas Cattlemen's Association, and 
Minnesota Catholic Conference, Marilyn Borchardt, John W. Helmuth, 
and Richard and Margene Eiguren.
---------------------------------------------------------------------------

    The Department disagrees. No facts have arisen that lead us to 
believe that Cargill's acquisition of Continental will harm competition 
in markets other than those identified in the Complaint.
    The Department filed the Complaint and entered into the proposed 
Final Judgment after an extensive investigation. During this 
investigation, we examined competition and the likely effects of the 
transaction in every market where both Cargill and Continental provide 
competing products or services. We focused on the grain and grain 
futures markets alleged in the Complaint because these are the markets 
in which Cargill and Continental compete with each other and the 
markets in which competition could diminish after this transaction.
    We are aware of other agribusiness industries in which one or both 
firms operate--including beef and pork packing, broiler and turkey 
production, flour and corn milling, soybean crushing, cattle feedlots, 
animal feed plants, and ethanol--but none of these industries is 
affected by the transaction since Continental is not selling its 
processing division to Cargill. Having carefully reviewed the facts, 
the Department has found no reason to believe that the transaction 
would have an adverse impact on competition in markets other than the 
grain markets alleged in the Complaint.

H. Ban on All Agribusiness Mergers

    Some commentators suggest that current concentration levels in 
agriculture markets justify an absolute ban on mergers and acquisitions 
in the agriculture sector.\23\ The antitrust laws provide no legal 
basis for such a ban, and the Department has no power to prevent the 
consummation of any transaction except to prevent or cure specific 
violations of the antitrust laws. Section 7 of the Clayton Act is the 
principal federal statutory provision dealing with mergers and 
acquisitions and, as explained above, it prohibits transactions that 
may harm competition in specific markets. Concentration levels are an 
important part of the analysis, but the ultimate test under Section 7 
is whether the acquisition may tend to substantially lessen competition 
and that is the showing we must be prepared to prove in court, based on 
the facts in any given case.
---------------------------------------------------------------------------

    \23\ May Beckrich, Dick Lundebreck, David Olson, and Professor 
C. Robert Taylor.
---------------------------------------------------------------------------

I. Vertical Integration

    Several commentators express concern about a trend toward vertical 
integration in agricultural industries, and they ask if the Department 
gave due consideration to that trend.\24\ The Department is aware that 
some agricultural sectors are experiencing an increase in vertical 
integration. While a trend toward integration can be anticompetitive in 
certain circumstances, we did not find that such concerns are presented 
by the Cargill-Continental transaction.
---------------------------------------------------------------------------

    \24\ South Dakota Attorney General Mark Barnett, AAM Inc., 
Animal Welfare Institute, Catholic Charities, Clean Water Action 
Alliance, Jan Lundebrek, David Olson, and Professor C. Robert 
Taylor.
---------------------------------------------------------------------------

    Vertical integration occurs when several stages of production, 
processing, distribution, and marketing are brought together in one 
firm. In broilers, for example, many of the big firms are involved in 
breeding, hatching, growing, processing, and packaging activities. 
Vertical integration also appears to be increasing in other 
agricultural sectors.
    In many circumstances, vertical integration is actually 
procompetitive, allowing firms to reduce their costs. See Herbert 
Hovenkamp, Federal Antitrust Policy, The Law of Competition and Its 
Practice, 332-36 (1994). However, there may be circumstances in which 
vertical mergers raise antitrust concerns, usually by either increasing 
barriers to entry, facilitating collusion or circumventing regulation. 
Id. at 346-48.
    Since the Cargill-Continental transaction is a horizontal, rather 
than vertical, acquisition, it does not raise significant vertical 
issues. The Department did not uncover evidence suggesting that the 
transaction, as restructured, would have anticompetitive effects at any 
level in the production chain or result in an increase in vertical 
integration that would be competitively problematic. In short, the 
Department was aware of, and did consider, trends toward vertical 
integration in various agricultural sectors, but concluded that such 
trends did not provide a basis for seeking broader relief with respect 
to this transaction.

J. Non-economic Concerns

    North Dakota Attorney General Heitkamp urges the Department to go 
beyond antitrust analysis and give greater consideration to unspecified

[[Page 15991]]

``non-economic concerns.'' While she does not say so directly, Attorney 
General Heitkamp may be suggesting that the antitrust laws be used to 
preserve family farms.
    Our prosecution of this matter protects the interests of all 
farmers, large and small. The proposed Final Judgment is designed to 
eliminate the risk that Cargill's acquisition of Continental will 
lessen competition anywhere in the United States. Department staff 
first identified all markets in which Cargill and Continental are 
competitors, and then, in every one of these markets, assessed the 
extent to which the acquisition raises concerns about a loss of 
competition that would cause competitive problems. Ultimately, we 
identified nine relevant markets in which farmers were likely to be 
adversely affected by the creation of monopsony market power that would 
enable Cargill and other grain companies to depress grain prices. 
Through divestitures, the proposed Final Judgment resolves those 
concerns. In addition, the Final Judgment protects against the exercise 
of market power to manipulate corn and soybean futures prices and 
limits a non-compete clause that otherwise would have prevented 
Continental from re-entering the grain distribution business.
    As far as our investigation was able to determine, there are no 
other potential adverse competitive effects likely to arise from the 
acquisition. The proposed Final Judgment therefore protects sellers of 
grain throughout the United States from the price depressing effects 
that otherwise could have been caused by the acquisition. This outcome 
is beneficial to farmers of every size, including small family farmers.

K. Administrative and Legislative Actions

    New Mexico Attorney General Madrid has no opposition to the 
proposed Final Judgment. Rather, her comment urges the Department to 
advocate administrative and legislative actions that will invigorate 
competition in agriculture markets.
    The Antitrust Division of the Department of Justice testifies 
before Congress on antitrust matters and prepares written reports 
stating the views of the Department on pending or proposed legislation 
pertaining to antitrust. Division attorneys also participate in 
administrative proceedings that require consideration of the antitrust 
laws or competition policies. In these situations, the Division often 
is the government's principal advocate of competition. Therefore, 
Attorney General Madrid can be sure that whenever the opportunities 
present themselves--in legislation, administrative proceedings or 
elsewhere--the Department will continue to promote competition in 
agriculture markets.

L. The OCM Comments

    OCS's comments indicate that it is dissatisfied with the action 
taken by the Department of Justice. Apparently, OCM thinks the 
complaint and proposed Final Judgment are too modest to deal with 
Cargill's dominance, as perceived by OCM, in numerous agriculture 
markets throughout the world. OCM's comments thus ``reach beyond the 
complaint, to evaluate claims that the government did not make and to 
inquire as to why they were not made.'' See United States v. Microsoft 
Corp., 56 F.3d at 1459. By doing so, OCM invites the court improperly 
to intrude on the government's prosecutorial role. See id.
    On the merits, many of OCM's comments in opposition to the 
Department's analysis are answered by the CIS itself, the rationale of 
which OCM has not addressed. Rather than repeat the CIS here, we 
briefly deal with OCM's principal objections with appropriate 
references to relevant explanations in the CIS or elsewhere in this 
Response.\25\
---------------------------------------------------------------------------

    \25\ In a separate filing, Nebraska Attorney General Don 
Stenburg shares OCM's concerns as they are set out in points 4, 5, 
6, 8, and 9 of this section.
---------------------------------------------------------------------------

1. DOJ Failed To Consider the Wider Concentration in Agricultural 
Markets Beyond Grain Buying
    In addition to its grain trading operations, Cargill has 
significant presence in beef packing, cattle feedlots, pork packing, 
broiler and turkey production, animal feed plants, flour and corn 
milling, soybean crushing, and ethanol production. OCM believes that 
Cargill transfers resources between these markets according to 
prevailing economic conditions.\26\ In OCM's view, these transfers are 
bound to increase after the transaction and, in some manner, enhance 
Cargill's power regardless of its economic performance.
---------------------------------------------------------------------------

    \26\ OCM refers to these transfers of resources between markets 
as ``cross-subsidization,'' and claims that they make diversified 
firms ``even more capable of * * * anti-competitive behavior.`` OCM 
at 2-3.
---------------------------------------------------------------------------

    The appropriate question for antitrust purposes, however, is 
whether, by transferring its own assets across industry lines as it 
sees fit in response to changing economic conditions, Cargill's ability 
artificially to depress prices will increase. OCM does not explain how 
such transfers could actually injure competition, and the Department is 
not aware of any plausible theories.
2. DOJ Failed To Consider the Continuing Potential for Anticompetitive 
Behavior in the Post-Merger Market
    OCM is concerned that the proposed Final Judgment may not preserve 
competition in the relevant markets. We address this concern in the CIS 
at pages 9-17 and in section V(A) of this memorandum.
3. DOJ Failed To Show That the Divested Remnants of Continental Will Be 
a Competitive Force Absent a Large Network of Elevators That Buy Grain
    OCM questions whether the divested grain elevators will be operated 
by effective competitors if the acquirers do not operate a large-scale 
network of facilities. This comment also goes to the issue of relief, 
which we address in section V(A) of this memorandum.
    In addition to the points discussed in that section, we note that 
operators of river elevators and rail terminals who do not have 
extensive distribution networks in their facilities' draw areas do not 
have to buy their grain from Cargill or other national grain 
companies--they can buy from farmers and local or regional operators of 
country elevators in those markets. Likewise, operators of port 
elevators who do not have extensive inland distribution networks can 
buy grain from independent operators of river elevators and grain 
terminals in their facilities' draw areas. On the basis of these facts 
and other information that we learned about the acquirers and 
competitive conditions in the markets where the divested facilities are 
located, we concluded that all of the acquirers of the divested 
facilities are likely to be viable and effective competitors as a 
result of the elevators that they are acquiring.
4. DOJ Failed To Consider the Impact on Potential Entry Into Grain 
Buying Markets
    OCM suggests that Continental should be held together because it is 
one of the few firms that has the potential to challenge Cargill in 
markets that Cargill now dominates, citing United States v. Penn-Olin 
Chemical Co., 378 U.S. 158 (1964), for that proposition. The teachings 
of Penn-Olin do not apply to the facts in this case.
    In Penn-Olin, the Supreme Court considered the legality of a joint 
venture between two chemical companies to build a sodium chlorate 
plant. Although the joint venture would have added a

[[Page 15992]]

sodium chlorate producer to the market, the Court remanded the case 
with instructions that the district court consider ``the reasonable 
probability that either one of the corporations would have entered the 
market by building a plant, while the other would have remained a 
significant potential competitor.'' Id. at 175-76. The Court's 
rationale was that ``[t]he existence of an aggressive, well equipped, 
and well financed corporation engaged in the same or related lines of 
commerce waiting anxiously to enter an oligopolistic market would be a 
substantial incentive to competition which cannot be underestimated.'' 
Id. at 174.
    Penn Olin thus concerns the protection of the present competitive 
force of a likely potential entrant--a firm perceived as a likely 
entrant by those in the market. That is not our concern in this case 
because Continental is presently in the market. We are concerned with 
the protection of actual competition in grain markets throughout the 
United States. As explained at pages 9-17 of the CIS and in section 
V(A) of this memorandum, the proposed Final Judgment fully addresses 
this concern by divesting Continental's assets to new, independent 
competitors in the markets, who can ensure that farmers receive a 
competitive price for their grain after the transaction.
5. DOJ Failed To Consider the Nature of Grain Selling Markets
    It is true, as OCM suggests, that a lessening of competition in 
world grain markets could have an adverse effect on competition within 
the United States. Therefore, contrary to OCM's assertion, we did 
assess Cargill's acquisition of Continental in the light of market 
conditions throughout the world.
    Our investigation revealed that numerous firms sell to buyers in 
foreign countries--including big international grain traders (such as 
Cargill, Bunge, ADM, Peavey, and Louis Dreyfus), smaller regional grain 
traders, and domestic producers in most foreign countries. These 
numbers suggest that overseas markets will remain unconcentrated, even 
after Cargill acquires Continental. Acquisitions in unconcentrated 
markets rarely have adverse competitive effects, and OCM provides no 
evidence to the contrary.\27\
---------------------------------------------------------------------------

    \27\ As noted in section IV(B)(4) of this Response, our 
investigation did indicate competitive problems at U.S. export 
facilities because Cargill and Continental were two of a relatively 
small number of grain buyers in the relevant port ranges, not 
because Cargill and Continental were two of a relatively small 
number of grain sellers in any overseas market.
---------------------------------------------------------------------------

6. DOJ Failed To Consider the Economic Disorganization of Farmers Which 
Can Be Exploited by Powerful Buyers
    Many thousands of farmers produce corn, wheat, and soybeans in the 
United States. As grain leaves their farms, however, the number of 
firms that buy grain from the farmers becomes much smaller. OCM says 
this disparity ``creates a rationale for scrutinizing the power of 
buyers relative to sellers.'' We agree with OCM on this point; its 
assertion that we ignored buyer power in our analysis is simply 
incorrect.
    If there is one theme that unifies our analysis, it is that 
Cargill's acquisition of Continental should not be permitted to create 
or enhance market power or to facilitate its exercise. CIS at 4-9; see 
also section IV(B) of this memorandum. Market power in this case means 
the ability of Cargill, as a buyer, to depress the price it pays for 
grain. See section IV(B)(4) of this memorandum. During the course of 
our investigation, we located every grain market in the United States 
in which it appeared likely that Cargill could depress prices as a 
result of the acquisition--and we obtained appropriate relief to 
address that concern. See id. at section V(A).\28\
---------------------------------------------------------------------------

    \28\ As noted in section V(B) of this Response, no commentator 
suggested that we failed to require divestitures in any specific 
local or regional market in which Cargill and Continental are two of 
a relatively small number of grain buyers.
---------------------------------------------------------------------------

    In short, the Department has not ignored the ``power of buyers'' 
that concerns OCM. Rather, we now recommend entry of the proposed Final 
Judgment, which will ensure that this transaction does not give Cargill 
the opportunity to exercise monopsony power over farmers anywhere in 
the United States.
7. DOJ Failed To Consider Informational Disparities in Agricultural 
Markets
    OCM does not explain how Cargill's acquisition of Continental will 
exacerbate informational disparities that may exist in agriculture 
markets. To the extent that Cargill or other grain merchants have the 
benefit of information that may be in some sense superior, there is no 
evidence that such information will improve after the transaction so as 
to lessen competition. Assuming information disparities could be the 
predicate for a Section 7 violation, they are not exacerbated by the 
transaction.
8. DOJ Failed To Explain the Benefits of the Merger
    OCM's argument that we should explain the efficiencies in order to 
justify our ``approval of the merger,'' OCM comment at 8, suggests that 
it misunderstands the role of the Department of Justice in reviewing 
mergers subject to the antitrust laws. The Department does not approve 
mergers. Rather, the Department reviews the particular facts and 
circumstances of each proposed merger in order to determine whether the 
merger is likely to substantially lessen competition. If the Department 
determines that a proposed merger is likely to lessen competition in 
violation of the antitrust laws, we seek an injunction from the court 
to prohibit the transaction.
    As the Complaint and CIS make clear, the Department challenged this 
merger in its original form as being in violation of Section 7 of the 
Clayton Act. The Department did not rely upon any asserted 
``efficiencies'' as a defense to allow Cargill to acquire Continental 
facilities in any relevant market in which we concluded that the 
transaction would otherwise tend substantially to lessen competition. 
The Department agreed to settle only after Cargill and Continental 
agreed to be bound by the terms of the proposed Final Judgment, which 
has the effect of substantially altering the terms of the merger to 
ensure that the transaction will not give grain companies market power 
to depress grain prices in any relevant market in the United States.
9. DOJ Failed To Consider a Range of Statutes That Congress Intended 
Courts To Consider When Making Decisions About Agriculture Markets
    OCM refers at some length to the Packers and Stockyards Act, the 
Capper-Volstead Act, and the Agricultural Fair Practices Act. OCM then 
concludes that ``mergers or other activities that enhance the power of 
buyers'' require careful review under the antitrust laws, especially 
when farmers are involved. See OCM comment at 12. The United States 
carefully investigates all mergers that may create substantial 
competitive harm affecting any group, including farmers. As the CIS and 
this Response make clear, the Department's concern for Cargill's power 
as a buyer of grain from farmers has been central to our analysis, 
prosecution, and proposed remedy in this case.
10. DOJ Failed To Consider That the Consent Decree Risks Leaving 
Farmers Without an Effective Outlet for Legal Redress
    OCM believes that the court of Appeals for the District of Columbia 
Circuit has ``severely restricted'' the ability of the district court 
to determine whether the proposed Final Judgment is in the public 
interest as required by the

[[Page 15993]]

APPA. See OCM comment at 13. For that reason, OCM is concerned that the 
interests of midwestern farmers may not be fully considered in this 
federal circuit.
    There is no reason to believe that the District Court for the 
District of Columbia cannot make the public interest determination that 
is required by law in this case.

M. A Hearing Is Unnecessary in This Case

    Nebraska Attorney General Stenberg urges the Court to appoint a 
special master ``to hear evidence and to make a recommendation to the 
court as to the efficacy'' of the proposed Final Judgment prior to its 
entry. See Brief of the Attorney General of Nebraska as Amicus Curiae 
at 13-14. The APPA provides that the Court must make a determination 
that entry of the proposed consent judgment is in the public interest 
before entering that judgment. The statute provides that in making such 
a public interest determination, the Court ``may'', inter alia, appoint 
a special master, conduct proceedings involving the taking of testimony 
and documentary evidence, and ``take such other action in the public 
interest as the court may deem appropriate.'' 15 U.S.C. 16(f)(5). The 
statute does not require the Court to hold hearings, but directs the 
court to take such action as it deems appropriate.
    As noted in section II of this memorandum, Congress, in passing the 
APPA, intended that consent decrees remain a viable antitrust 
enforcement option. They could not remain viable if it were necessary 
for a reviewing court to conduct a trial for a de novo determination of 
factual issues relevant to the adequacy of a proposed decree. The 
legislative history is clear that the court need not conduct the 
equivalent of a trial on the merits, or even conduct a hearing or take 
evidence, S.Rep. No. 298-93 at 6 (1973):

    The Committee recognizes that the court must have broad 
discretion to accommodate a balancing of interests. On the one hand, 
the court must obtain the necessary information to make its 
determination that the proposed consent decree is in the public 
interest. On the other hand, it must preserve the consent decree as 
a viable settlement option. It is not the intent of the Committee to 
compel a hearing or trial on the public interest issue. It is 
anticipated that the trial judge will adduce the necessary 
information through the least complicated and least time-consuming 
means possible. Where the public interest can be meaningfully 
evaluated simply on the basis of briefs and oral arguments, this is 
the approach that should be utilized. Only where it is imperative 
that the court should resort to calling witnesses for the purpose of 
eliciting additional facts should it do so.\29\
---------------------------------------------------------------------------

    \29\ This passage is quoted in United States v. Associated Milk 
Producers, Inc., 394 F. Supp. 29, 45 (W.D. Mo. 1975), aff'd, 534 
F.2d 113 (8th Cir. 1976), cert. denied sub non. National Farmers 
Org., Inc. v. United States, 429 U.S. 940 (1976) (hereafter 
``AMPI'').

    The expeditious procedures to determine the public interest that 
Congress envisioned are not possible without reliance upon the 
Department's good faith execution of its prosecutorial discretion. 
Evidentiary hearings, therefore, should be used only in extreme cases. 
See United States v G. Heileman Brewing Co., 563 F. Supp. 642, 652 (D. 
Del. 1983) (``This preference for the comment procedure over more 
burdensome forms of third-party participation * * * is clearly shown by 
the legislative history of the APPA.'').
    In the instant case, an evidentiary hearing would be inordinately 
time consuming and would not in any way further the Court's 
understanding of facts relevant to the determination it must make. 
There has been no claim of bad faith or malfeasance on the part of the 
United States in settling this case. See AMPI, 394 F. Supp. at 41, and 
cases cited. Nor has Attorney General Stenberg explained why he has not 
been able to fully apprise the Court of his concerns in the comments he 
has already filed with respect to the proposed Final Judgment. See 
Heileman Brewing Co., 563 F. Supp. at 653.
    The Court need only consider the proposed Final Judgment as 
explained by the CIS, the comments thereon, and this Response thereto. 
Such consideration will amply demonstrate that the proposed Final 
Judgment satisfies the public interest standard of the APPA as 
interpreted by the courts.

N. The 60-Day Comment Period Should Not Be Extended

    Several commentators request that the time period for filing public 
comments be extended.\30\ There is no need for such extension.
---------------------------------------------------------------------------

    \30\ Animal Welfare Institute, NFO Kansas, OCM, Insabelle Barth, 
Mary Casserand, Steve Dewell, Grant and Mabel Dobbs, Barbara Hook, 
Jay Godley, Todd Lewis, Glenn Oshiro, N. Ramsey, Ellen Stebbins, 
Giles Stockton, Dr. Frankie M. Summers, Dennis and Janice Urie.
---------------------------------------------------------------------------

    The 60-day public comment period specified in 15 U.S.C. 16(b) 
commenced on August 12, 1999 and terminated on October 12, 1999; but we 
have considered and responded to every comment that we received before 
or after the deadline. Those who request more time for the filing of 
comments do not suggest the existence of relevant facts that the 
Department has failed to consider in negotiating and consenting to the 
proposed Final Judgment. Nor do they explain why more time would be 
desirable to assist the Court in making the public interest 
determination that is required by the APPA. Under the circumstances, an 
extension of the 60-day public comment period is unnecessary and 
inappropriate in this action.

Conclusion

    The Competitive Impact Statement and this Response to comments 
demonstrate that the proposed Final Judgment serves the public 
interest. Accordingly, after publication of this Response in the 
Federal Register pursuant to 15 U.S.C. 16(b), the United States will 
move this Court to enter the Final Judgment.

    Dated this 11th day February, 2000.
    Respectfully submitted,
Robert L. McGeorge,
D.C. Bar No. 91900.


Michael P. Harmonis,
U.S. Department of Justice, Antitrust Division, 325 7th Street, NW, 
Suite 500, Washington, D.C. 20530, (202) 307-6361.

Certificate of Service

    I hereby certify that I am an attorney for the United States in 
this action, and have caused true and correct copies of the foregoing 
UNITED STATES RESPONSE TO PUBLIC COMMENTS to be served by first-class 
mail or by more expeditious means on counsel for the defendants, Marc 
G. Schildkraut, Esq., Howrey & Simon, 1299 Pennsylvania Ave., NW, 
Washington DC, Paul T. Dennis, Esq., Swidler Berlin Shereff Friedman, 
LLP, 3000 K Street, NW, Suite 300 Washington, DC and Jack Quinn, Esq., 
Arnold & Porter, 555 12th Street, NW, Washington, DC, on this 11th day 
of February, 2000.

Michael P. Harmonis.
  

United States Response to Public Comments--Appendix

    Communications with respect to this document should be addressed 
to:

Roger W. Fones, Chief, Donna N. Kooperstein, Assistant Chief; Robert 
L. McGeorge, Michael P. Harmonis, Attorneys; Transportation, Energy 
& Agriculture Section, Antitrust Division, U.S. Department of 
Justice, 325 Seventh Street, NW, Washington, DC 20530, (202) 307-
6361.

Public Comments

    The comments from members of the public that follow in this 
Appendix were filed during the sixty-day period specified in 15 U.S.C. 
16(b),

[[Page 15994]]

commencing on August 12, 1999 and terminating on October 12, 1999.

Congresswoman Jo Ann Emerson--Tab 1
State Attorneys General (alphabetical by State)--Tab 2
Organizations (in alphabetical order)--Tab 3
Individuals (in alphabetical order)--Tab 4

Tab 1

Congress of the United States,
House of Representatives,
Washington, DC 20515-2508, August 11, 1999.

Mr. Roger Fones,
Chief, Transportation, Energy, and Agriculture Section, Antitrust 
Division, U.S. Department Of Justice, 325 7th Street, NW, Suite 500, 
Washington, DC 20530.

    Dear Mr. Fones: Thank you for the attention of your Department 
to the plans by Cargill, Inc. to acquire the grain handling 
interests of Continental Grain. In all of agriculture, from 
transportation to processing, to inputs, there is a troubling trend 
toward larger and fewer companies. It is vitally important that your 
office work to prevent the kind of consolidation in agriculture 
markets that hurts producers. In the case of Cargill, I believe that 
your investigation and the ensuing stipulations were well warranted. 
However, I hope that you will consider an issue that has been raised 
by producers in my District regarding the consent agreement that the 
DOJ has entered into with Cargill (civil action number 991875).
    Specifically, I have been contacted by producers in Southeast 
Missouri concerned that Continental's Cottonwood Point facility may 
be sold to an entity already possessing a significant share of the 
local grain market. As you know, the consent agreement requires 
Cargill to divest itself of the Cottonwood Point facility in order 
to satisfy competitive concerns. Local producers fear that Bunge 
would gain a near monopoly share of the local market if it were 
allowed to purchase the facility. I urge you to exercise strict 
oversight authority over the divestiture of the Cottonwood Point 
facility in order to prevent an unintended, anticompetitive 
situation.
    Thank you for your attention to this matter and I look forward 
to hearing from you.

    Sincerely,
Jo Ann Emerson, Member of Congress.
  

Tab 2

Richard Blumenthal, Attorney General,
State of Connecticut
Hartford June 23, 1999.

The Honorable Joel I. Klein,
Assistant Attorney General, Antitrust Division, Department of 
Justice, 950 Pennsylvania Avenue, N.W., Room 3109, Washington, D.C. 
20530.

Re: Mergers in the Agricultural Industry.

    Dear Joel: I am sure you are aware of Minnesota Attorney General 
Mike Hatch's recent letter to you--which he has suggested I support 
in my capacity as Chair of the Antitrust Committee of the National 
Association of Attorneys General--expressing his concern about the 
proposed merger of the grain operations of Cargill, Inc. and 
Continental Grain Company. In addition, I understand that North 
Dakota Attorney General Heidi Heitkamp, Missouri Attorney General 
Jay Nixon, and South Dakota Attorney General Mark Barnett have each 
written to express their similar concerns about this proposed 
merger.
    As the Chair of the Antitrust Committee, I join in asking you to 
consider carefully the possible damage to our nation's agricultural 
industry caused by undue concentration in numerous grain markets.
    In exercising our parens patriae authority, Attorneys General 
are often called upon to evaluate and gauge the competitive harm 
that may result in their own states from a proposed merger. 
Moreover, we are all well informed of the benefits of competitive 
markets in lower prices and better quality for consumers. Given the 
importance of the food supply to our national, as well as local, 
interests, and the needs of consumers and farmers for fair pricing, 
it is crucial that we not allow monopolies or oligopolies to form--
or if already formed, from abusing their market power--at any level 
of the agricultural industry. I urge you to be wary of and oppose 
any merger that may tend to lessen competition in this all-important 
industry in the interests of farmers and consumers alike.
    Very truly yours.

Richard Blumenthal.
  

Mike Hatch, Attorney General
State of Minnesota
Office of the Attorney General,
St. Paul, MN, October 12, 1999.
Roger W. Fones,
Chief, Transportation, Energy and Agriculture Section, Antitrust 
Division, United States Department of Justice, 325 Seventh Street, 
NW, Suite 500, Washington, DC 20530.

    Re: Comment--Proposed Consent Decree Approving the Proposed 
Merger of Cargill, Inc. and Continental Grain Co.

    Dear Mr. Fones: I submit these comments about the proposed 
Cargill-Continental merger pursuant to the Antitrust Procedures and 
Penalties Act, 15 U.S.C. 16 (1998). Our concerns were explained in 
detail in a letter submitted to the Department of Justice in May, 
attached for your information as Exhibit 1. While we appreciate the 
Department of Justice's (DOJ) efforts in its lengthy investigation 
of the proposed merger and while the proposed consent decree strives 
to alleviate many concerns that have been raised regarding this 
merger, we remain concerned about the impact of this merger upon 
farmers and rural communities in Minnesota. This merger is taking 
place in the context of a nationwide, even a global trend toward 
consolidation of agricultural industries which, we fear, will only 
harm the interests of farmers, consumers, and local communities.
    As noted in our earlier letter, the grain industries, 
particularly grain exports, are already highly concentrated, 
increasing the likelihood that further concentration will lead to 
oligopsony and even monopsony markets for grain farmers and other 
sellers of grain. Further, agricultural industries are experiencing 
a high rate of vertical consolidation as well, with Cargill being 
one of the key players in this vertical consolidation given its ties 
to agricultural biotechnology, grain production, animal feed, meat 
packing, food processing, etc. Particularly disturbing are recent 
comments of the chairman of Cargill who has publicly proclaimed the 
company's intention to continue to expand its market reach 
throughout agricultural industries, both on a horizontal and 
vertical level. ``Cargill Chairman Micek Says Acquisitions Could 
Fuel Growth,'' Star Tribune, September 11, 1999 (Exhibit 2). These 
comments illustrate Cargill's intention to further reduce 
competition in agricultural markets a time when its most recent and 
controversial acquisition has not even been finalized.Thus, we 
believe it would be prudent for the consent decree to prohibit 
Cargill from acquiring any other direct competitors in grain export, 
transport, and storage markets.
    Also, it should be noted that Cargill continues to come under 
scrutiny for its business conduct. In the most recent example, a 
little over one month ago, the Commodities Futures Trading 
Commission charged Cargill with improper selling of a commodity 
option for future delivery of grain, because of its use of certain 
contracts. Barshay, Jill, ``Cargill Charged With Illegally Selling 
Option Contracts,'' Star Tribune, August 27, 1999 (Exhibit 3). This 
type of alleged conduct is directly relevant to the proposed merger, 
and should be considered by the Court in its evaluation of the 
proposed merger and consent decree.
    Finally, should the Court approve the proposed consent decree 
and allow the merger to take place, we urge the Department of 
Justice to strictly scrutinize Cargill's and Continental's 
compliance with the proposed final order, and to exercise its 
discretion in approving acquirers of the proposed divestitures in a 
careful and exacting way. As the Department of Justice will have 
sole discretion to approve or disapprove any proposed acquirers, we 
ask that it exercise this discretion vigilantly to minimize to the 
greatest degree possible any potential harm to competition and 
public welfare that may result from this merger.

    Very truly yours,
Mike Hatch,
Attorney General, State of Minnesota.
    Exhibit 1 to the comment filed by Minnesota Attorney General Mike 
Hatch is available for inspection in room 215 of the U.S. Department of 
Justice, Antitrust Division, 325 Seventh Street, NW, Washington, DC 
20530 (telephone: 202-514-2481) and at the Office of the Clerk of the 
United States District Court for the District of Columbia, 333 
Constitution Avenue, NW, Washington, DC 20001. Copies of these 
materials may be obtained upon request and payment of a copying fee.

Jeremiah W. (Jay) Nixon, Attorney General,
Attorney General of Missouri,

[[Page 15995]]

Jefferson City, MO, September 16, 1999.

Mr. Roger W. Fones, Esq.,
Chief, Transportation, Energy and Agriculture Section, Antitrust 
Division, United States Department of Justice, 325 Seventh Street, 
NW, Suite 500, Washington, DC 20530.

Re: Comments on Proposed Consent Decree and Divestiture Settlement, 
Cargill, Inc.'s Acquisition of Continental Grain Company.

    Dear Mr. Fones: As Missouri Attorney General, I wrote directly 
to Joel Klein, Assistant Attorney General in charge of the Antitrust 
Division, in mid-May, 1999, regarding the above-referenced 
acquisition. I had also instructed my assistant, Trey Hanna, to 
assist your office in assessing the anticompetitive impact this 
merger would have on grain farmers in southeast Missouri. As 
expressed on earlier occasions, I am concerned about this 
acquisition.
    I was quite glad to see that the Department of Justice secured 
(1) Cargill's agreement that it would not seek to acquire any 
ownership interest in the river elevator at Birds' Point, Missouri, 
which Continental had previously held, and (2) Continental's 
agreement to first divest its river terminal at Cottonwood Point, 
Missouri, (near Caruthersville) before conveying most of its other 
grain assets to Cargill. Allow me to again express our thanks.
    But we are still concerned; it remains to be seen whether the 
new owner of that Cottonwood Point facility will be acceptable.
    We have analyzed competitive conditions in southeast Missouri's 
grain business and farmers' ability to secure a fair price for their 
product. We have analyzed the ``Competitive Impact Statement'' 
(C.I.S.) filed by the Department of Justice on July 23, 1999 and 
subsequently published in the Federal Register. Pursuant to the 
Antitrust Procedures and Penalties Act, 15 U.S.C. Sec. 16 (b)-(h), I 
now wish to formally comment on the proposed consent decree which, 
if approved by the court, will become a final judgment and will set 
competitive conditions in southeast Missouri for many years to come.
    As the Department of Justice explained in that C.I.S., the core 
purpose of requiring Continental to first divest the Cottonwood 
Point facility is to ``preserve existing competition'' and 
``maintain the level of competition [in southeast Missouri] that 
existed pre-acquisition.'' (C.I.S., at p. 9). As also recited 
therein, the Department of Justice has the sole discretion to 
approve or disapprove the manner in which the defendants propose to 
implement the divestiture of this facility (C.I.S., at p. 12), and 
whom they propose to divest it to (C.I.S., at p. 11).
    Farmers in southeast Missouri hear rumors that Continental may 
propose to divest the Cottonwood Point facility to Bunge, the second 
largest competing purchaser of grain in the area (after Cargill). 
That would reduce the number of competing buyers of grain from four 
to three, being nearly as bad for competition in southeast Missouri 
as a sale to Cargill, which you sued to prevent. Likewise, a 
divestiture to Consolidated Grain and Barge (C.G.B.), another 
competitor in the market, would also be far from optimal.
    Before Cargill and Continental announced this global 
transaction, farmers in southeast Missouri had four competing buyers 
to sell their product to. We urge the Department of Justice to 
exercise its discretion, when approving proffered buyers, to make 
sure they have four separate and distinct buyers after this 
divestiture, as well.
    While my analysis has focused exclusively on the Missouri 
facilities, I also have concerns about the impact of this merger on 
the market generally. I share the concern of many Missouri farmers 
that the current anti-trust laws and resources may not adequately 
protect them from attempts to manipulate the market place. I urge 
the Justice Department to scrutinize this acquisition closely in 
light of the growing consolidation in agriculture.
    Thank you for giving these comments due consideration. If we can 
answer any questions or provide other assistance, don't hesitate to 
contact us through my assistant, Trey Hanna, at (816) 889-5000.

    Sincerely,
Jeremiah W. (Jay) Nixon.
  

Don Stenberg, Attorney General,
State of Nebraska,
Office of the Attorney General,
Lincoln, Nebraska 68509-8920, September 7, 1999.

Mr. Roger W. Fones,
Chief, Transportation, Energy and Agriculture Section, Antitrust 
Division, United States Department of Justice, 325 Seventh Street, 
N.W., Suite 500, Washington, DC 20530.

Re: United States of America v. Cargill, Inc and Continental Grain 
Company.
    Dear Mr. Fones: Pursuant to the Antitrust Procedures and 
Penalties Act, I am writing in my official position as the Attorney 
General of the State of Nebraska to object to the proposed final 
judgment in this case. In my opinion, the approval of the consent 
decree is not in the public interest and is not consistent with the 
public policy underlying federal antitrust statutes.
    The proposed consent decree requires the divestiture of certain 
grain elevators in specified locations, but otherwise approves the 
merger of two of our nation's largest grain trading companies.
    The increasing concentration in agricultural marketing and 
processing will mean lower prices for farmers and higher prices for 
consumers. Indeed, it was farmers' protests against the formation of 
large agricultural marketing and processing trusts in the late 
1800's that led to the creation of our antitrust laws.
    We are now seeing the same types of concentrations of economic 
power in the agricultural processing and marketing industries that 
existed over 100 years ago until they were broken up by the passage 
and enforcement of federal antitrust laws. At a minimum, a line must 
now be drawn to prevent further anti-competitive economic 
concentration in agriculture.
    The fundamental flaw in the U.S. Justice Department's analysis 
that it fails to recognize that grain handling and grain 
merchandising is a nationwide and worldwide business. The proposed 
merger needs to be viewed not simply on a region by region basis, 
but upon overall national grain marketing implications.
    The fundamental evils of excessive economic concentration are 
well known and have been well known for more than 100 years. In a 
highly concentrated industry, it is easy to keep track of the prices 
a handful of competitors are paying to acquire grain and to sell it. 
It is in the interest of the handful of competitors to uniformly 
offer low prices to buy and high prices to sell to consumers. This 
is true whether or not there is an explicit contract or conspiracy 
in restraint of trade. Moreover, it is easier and more tempting to 
form contracts or conspiracies to restraint of trade in a highly 
concentrated industry.
    In a May 7, 1999 letter concerning the Cargill/Continental 
merger to the U.S. Department of Justice, Minnesota Attorney General 
Mike Hatch noted some basic market share information that is of 
great importance. He pointed out that Cargill and Continental are 
the two largest grain exporters in the United States. Cargill is the 
nation's largest grain exporter and Continental is the second 
largest. General Hatch goes on the explain that in fiscal year 1998, 
the market shares for the four largest national grain exporters 
(including Cargill and Continental) range from 46.6% for wheat to 
64.9% for soybeans and 80.9% for corn. Cargill itself estimates that 
it and Continental together control about 35% of the U.S. grain 
exports.
    Continental and Cargill are both already such large enterprises 
that it is very doubtful that this merger will produce any economies 
of scale that would increase profits. Rather, increased profits will 
come from the increased market power to pay producers less and 
charge consumers more by virtue of vastly increased economic power.
    The purpose of the anti-trust statutes is to preserve the free 
markets so that our free enterprise system can produce the fairest 
prices for both producers and consumers. The anti-trust statutes 
should be brought to bear in this case for that very reason.
    As General Hatch correctly noted in his May 7 letter, these 
issues are national in scope and adequate resolution cannot come 
from the state or local level. If the U.S. Department of Justice 
cannot be persuaded to vigorously oppose a merger of this magnitude, 
it is difficult to imagine any merger in the area of agri-business 
which would be opposed by the Department.
    Those of us from agricultural states under-stand the negative 
impact of excessive economic concentrations in agriculture on our 
farmers and ranchers. Persons from non-agricultural states should 
carefully consider the substantial increases in consumer food prices 
that loom on the horizon if further economic concentration occurs in 
our agricultural sector.

    Yours truly,
Don Stenber.
  

    In the matter of The United States District Court for the 
District of Columbia; United States of America, Plaintiff, vs. 
Cargill, Incorporated, and Continental Grain Company, Defendants; 
Case No. 1:99CV01875 (GK) Judge; Gladys Kessler.

[[Page 15996]]

    Filed October 22, 1999.

Motion by the Attorney General of Nebraska To File Brief as Amicus 
Curiae

    Comes Now Don Stenberg, the Attorney General of the State of 
Nebraska, and moves this Court for leave to file the brief attached 
hereto as Exhibit A as amicus curiae in the above-referenced action. 
The Attorney General of Nebraska has a special interest in the subject 
matter of this lawsuit because of his duties and responsibilities to 
enforce the antitrust laws, and because the merger proposed herein will 
have a significant impact upon the State of Nebraska.

Don Stenberg, #14023,
Attorney General of Nebraska.

Dale A. Comer, #15365,
Assistant Attorney General, 2115 State Capitol, Lincoln, NE 68509-8920, 
Tel: (402) 471-2682.

Certificate of Service

    The undersigned hereby certifies that a copy of the foregoing 
Motion By The Attorney General Of Nebraska To File Brief As Amicus 
Curiae with attachments has been served upon the parties herein by 
mailing each of those parties a true and correct copy of the same, via 
first-class United States Mail, postage prepaid, addressed to the 
parties' counsel of record as follows:

Robert L. McGeorge, Esq.
Attorney, U.S. Department of Justice, 325 Seventh Street, NW, Suite 
500, Washington, DC 20530.

Marc G. Schildkraut, Esq.,
Howrey & Simon, 1299 Pennsylvania Avenue, NW, Washington, DC 20004.

Paul T. Denis, Esq.,
Swidler, Berlin Shereff Friedman, LLP, 3000 K Street, NW, Suite 300, 
Washington, DC 20007-5116.

Jack Quinn, Esq.,
Arnold & Porter, 555 Twelfth Street, NW, Washington, DC 20004.

    On this 21st day of October, 1999.
Dale A. Comer,
Assistant Attorney General.  

Memorandum of Points and Authorities in Support of Motion by the 
Attorney General of Nebraska To File Brief as Amicus Curiae

Don Stenberg, #14023,
Attorney General of Nebraska.

Dale A. Comer, #15365,
Assistant Attorney General, 2115 State Capitol, Lincoln, NE 68509-8920, 
Tel: (402) 471-2682.

Introduction

    This case involves an action under the Tunney Act, and in 
particular 15 U.S.C. 16(e), in which the parties seek this court's 
approval of a proposed final consent judgment involving a corporate 
merger between Cargill, Inc. and Continental Grain Company. The 
Attorney General of the State of Nebraska has now filed a Motion For 
Leave To File A Brief As Amicus Curiae in this proceeding. This 
Memorandum of Points and Authorities is submitted to the court in 
support of that Motion.

Argument

I

The decision as to whether to allow participation by amicus curiae in 
this case is left to the discretion of this court.

    In general, the decision as to whether to allow a non-party to 
participate in a case as amicus curiae is solely within the broad 
discretion of the court. Ellsworth Associates, Inc. v. United States, 
917 F.Supp. 841 (D.D.C. 1996). Such discretion also applies within the 
specific context of the Tunney Act. United States v. Associated Milk 
Producers, 394 F.Supp. 29 (W.D.Mo. 1975). The aid of amicus curiae is 
appropriate at the trial level where they can provide helpful analysis 
of the law. Waste Management of Pennsylvania v. City of York, 162 
F.R.D. 34 (M.D.Pa. 1995). Amicus curiae are also appropriate when they 
have a special interest in the subject matter of the suit. Strasser v. 
Doorley, 432 F.2d 567 (1st Cir. 1970). As a result, the decision as to 
whether to allow participation by amicus curiae in this case is left to 
the discretion of this court, and such participation is warranted if 
the amicus participants can provide a helpful analysis of the law or if 
they have a special interest in the subject matter of this suit.

II

The court should exercise its discretion so as to allow the Attorney 
General of Nebraska to file a brief in this case as amicus curiae.

    The amicus curiae brief which the Attorney General of Nebraska 
proposes to submit to this court contains a detailed discussion and 
analysis of the proposed Final Judgment in this case under the 
applicable antitrust laws, and therefore, will hopefully provide this 
court with a helpful analysis of the law. More importantly, the 
Attorney General of Nebraska has a special interest in the subject 
matter of this lawsuit, in two respects.
    First, the Attorney General of Nebraska is the primary state 
official in Nebraska charged with the duty of enforcing the state's 
antitrust laws. See, e.g., Neb. Rev. Stat. Secs. 59-1601 through 59-
1623 (1998) (the Nebraska Consumer Protection Act which, among other 
things, authorizes the Attorney General to bring an action seeking to 
enjoin a corporate acquisition which would ``substantially lessen 
competition or tend to create a monopoly in any line of commerce); Neb. 
Rev. Stat. Secs. 59-801 through 59-831) (1998) (authorizing criminal 
sanctions for antitrust violations in Nebraska); and Neb. Rev. Stat. 
Secs. 84-212 (1994) (authorizing the Attorney General to sue a parens 
patriae on behalf of citizens of the state to recover damages sustained 
by those citizens as a result of violations of the state or federal 
antitrust laws). The Nebraska Attorney General also has specific 
enforcement authority under the federal antitrust laws. See, e.g., 
Section 4 of the Clayton Act, 15 U.S.C. 15 (1998) (authorizing states 
to sue for proprietary damages inflicted upon them); Title III of the 
Hart-Scott-Rodino Antitrust Improvements Act of 1976, 15 U.S.C. 15c 
(1998) (authorizing state attorneys general to sue for damages as 
parens patriae on behalf of natural persons); Section 16 of the Clayton 
Act, 15 U.S.C. Sec. 26 (1998); California v. American Stores Co., 495 
U.S. 271 (1990) (upholding state's right pursuant

[[Page 15997]]

to Section 16 of the Clayton Act to obtain injunctive relief, including 
divestiture, against illegal mergers); Hawaii v. Standard Oil, 405 U.S. 
251, 257-60 (1972) (acknowledging state's authority to seek injunctive 
relief on behalf of general economy of the state). As a result, the 
Attorney General of Nebraska has a strong interest in antitrust 
enforcement and in promoting free and fair competition. The Attorney 
General of Nebraska also has a strong interest in protecting the 
citizens of Nebraska from unreasonable restraints of trade, both in 
their capacities as consumers and their capacities as competitors.
    Second, agriculture is an important and major industry in the State 
of Nebraska. In 1997, more than 96 per-cent of the state's land, 
involving 47 million acres, was farm and ranchland. Clerk of the 
Nebraska Legislature, Nebraska Blue Book 1998-99 (Michael R. Lewis ed., 
1998) p. 40. In that same year, gross cash receipts from farm marketing 
in Nebraska totaled $10.1 billion, and Nebraska had 55,000 farms that 
produced food for consumers in the United States and abroad. Id. 
Consequently, any anticompetitive activities which affect agricultural 
markets and farmers in the State of Nebraska in general are of concern 
to the Attorney General of Nebraska.
    It is also clear that agricultural interests and farmers in 
Nebraska are affected specifically by the details of the proposed final 
consent judgment in this case. As noted in the government's Competitive 
Impact Statement herein, the overlapping draw area for the Pacific 
Northwest includes portions of Nebraska. Competitive Impact Statement 
at 4. In addition, the overlapping draw area for the Texas Gulf also 
includes portions of Nebraska. Competitive Impact Statement at 4. 
Therefore, the final consent judgment proposed in this case affects the 
agricultural industry in Nebraska, and the Attorney General of Nebraska 
has a direct responsibility to deal with anticompetitive practices 
affecting those markets. On that basis, the Attorney General also has a 
special interest in the subject matter of this lawsuit.

Conclusion

    An amicus brief by the Attorney General of Nebraska in this case 
would provide this court with a helpful analysis of the law. Moreover, 
for the reasons stated above, the Attorney General of Nebraska has a 
special interest in the subject matter of this lawsuit. As a result, 
the Attorney General of Nebraska respectfully requests that this court 
exercise its discretion and grant him leave to participate in this 
action by filing a brief as amicus curiae.

    Dated this 21st day of October, 1999.
(By: Don Stenberg, #14023, Attorney General)
Don Stenberg,
Attorney General of Nebraska.

Dale A. Comer, #15365,
Assistant Attorney General, 2115 State Capitol, Lincoln, NE 68509-8920, 
Tel: (402) 471-2682.

Certificate of Service

    The undersigned hereby certifies that a copy of the foregoing 
Memorandum Of Points And Authorities in Support Of Motion By The 
Attorney General Of Nebraska To File Brief As Amicus Curiae has been 
served upon the parties herein by mailing each of those parties a true 
and correct copy of the same, via first-class United States Mail, 
postage prepaid, addressed to the parties' counsel of record as 
follows:

Robert L. McGeorge, Esq.,
Attorney, U.S. Department of Justice, 325 Seventh Street, NW, Suite 
500, Washington, DC 20530.
Marc G. Schildkraut, Esq.,
Howrey & Simon, 1299 Pennsylvania, NW, Washington, DC 20004.
Paul T. Denis, Esq.,
Swidler, Berlin Shereff Friedman, LLP, 3000 K Street, NW, Suite 300, 
Washington, DC 20007-5116.
Jack Quinn, Esq.,
Arnold & Porter, 555 Twelfth Street, NW, Washington, DC 20004.
    On this 21st day of October, 1999.
Dale A. Comer,
Assistant Attorney General.

Brief of the Attorney General of Nebraska as Amicus Curiae

Don Stenberg, #14023,
Attorney General of Nebraska.
Dale A. Comer, #15365,
Assistant Attorney General, 2115 State Capitol, Lincoln, NE 68509-8920, 
Tel: (402) 471-2682.

Exhibit A

Interest of Amicus Curiae

    The Attorney General of Nebraska is the primary state official in 
Nebraska charged with the duty of enforcing the state's antitrust laws. 
See, e.g., Neb. Rev. Stat. Secs. 59-1601 through 59-1623 (1998) (the 
Nebraska Consumer Protection Act which, among other things, authorizes 
the Attorney General to being an action seeking to enjoin a corporate 
acquisition which would ``substantially lessen competition or tend to 
create a monopoly in any line of commerce); Neb. Rev. Stat. Secs. 59-
801 through 59-831 (1998) (authorizing criminal sanctions for antitrust 
violations in Nebraska); and Neb. Rev. Stat. Sec. 84-212 (1994) 
(authorizing the Attorney General to sue as parens patriae on behalf of 
citizens of the state to recover damages sustained by those citizens as 
a result of violations of the state or federal antitrust laws). The 
Nebraska Attorney General also has specific enforcement authority under 
the federal antitrust laws. See, e.g., Section 4 of the Clayton Act, 15 
U.S.C. 15 (1998) (authorizing states to sue for proprietary damages 
inflicted upon them); Title III of the Hart-Scott-Rodino Antitrust 
Improvements Act of 1976, 15 U.S.C. Sec. 15c (1998) (authorizing state 
attorneys general to sue for damages as parens patriae on behalf of 
natural persons); section 16 of the Clayton Act, 15 U.S.C. 26 (1998); 
California v. American Stores Co., 495 U.S. 271 (1990) (upholding 
state's right pursuant to Section 16 of the Clayton Act to obtain 
injunctive relief, including divestiture, against illegal mergers); 
Hawaii v. Standard Oil, 405 U.S. 251, 257-60 (1972) (acknowledging 
state's authority to seek injunctive relief on behalf of general 
economy of the state). As a result, the Attorney General of Nebraska 
has a strong interest in antitrust enforcement and in promoting free 
and fair competition. The Attorney General of Nebraska also has a 
strong interest in protecting the citizens of Nebraska from 
unreasonable restraints of trade, both in their capacities as consumers 
and in their capacities as competitors.
    Agriculture is an important and major industry in the State of 
Nebraska. In 1997, more than 96 per cent of the state's land, involving 
47 million acres, was farm and ranch land. Clerk of the Nebraska 
Legislature, Nebraska Blue Book 1998-99 (Michael R. Lewis ed., 1998) p. 
40. In that same year, gross cash receipts from farm marketing in 
Nebraska totaled $10.1 billion, and Nebraska had 55,000 farms that 
produced food for consumers in the United States and abroad. Id. As a 
result, any anticompetitive activities which affect agricultural 
markets and farmers in the State of Nebraska in general are of concern 
to the Attorney General of Nebraska.
    It is also clear that agricultural interests and farmers in 
Nebraska are affected specifically by the details of the proposed final 
consent judgment in this case. As noted in the government's Competitive 
Impact Statement herein, the overlapping draw area for the Pacific 
Northwest includes portions of Nebraska. Competitive Impact Statement 
at 4. In addition, the

[[Page 15998]]

overlapping draw area for the Texas Gulf also includes portions of 
Nebraska. Competitive Impact Statement at 4. As a result, the final 
consent judgment proposed in this case will affect the agricultural 
industry in Nebraska, and the Attorney General of Nebraska has a direct 
responsibility to deal with anticompetitive practices in those markets.

Argument

The Final Consent Judgment Proposed by the Parties in This 
Proceeding is Not in the Public Interest, and Should Not be 
Approved by This Court

    Under the Tunney Act, and in particular 15 U.S.C. 16(e), this court 
may approve the final consent judgment proposed by the parties in this 
case only if the court determines that the entry of such judgment is 
``in the public interest.'' For the reasons discussed at length below, 
the Attorney General of Nebraska contends that the consent judgment 
with Cargill and Continental Grain Company (hereafter ``Continental'') 
proposed by the United States is deficient and not in the public 
interest. Consequently, this court should refuse to approve that final 
consent judgment.

I

In a proceeding under the Tunney Act, this court is not a ``rubber 
stamp'' for the Department of Justice, but acts as an independent check 
on the terms of the proposed final consent judgment.

    A number of federal cases have set out the applicable standards 
with respect to a review of a proposed final consent judgment proposed 
by the government under the Tunney Act. First of all, it is clear that 
the court is not to act simply as a ``rubber stamp'' for the proposal 
submitted by the Department of Justice. United States v. BNS Inc., 858 
F.2d 456 (9th Cir. 1988); United States v. Western Electric Company, 
767 F.Supp. 308 (D.D.C. 1991). Instead, the court ``is required to act 
as an independent check on the terms of such decrees.'' United States 
v. Western Electric Company, 767 F.Supp. 308, 328 (D.D.C. 1991). In 
addition, Congress did not intend the court's review of a proposed 
final consent judgment under the Tunney Act to be merely pro forma or 
limited to what appears on the surface. United States v. Gillette 
Company, 406 F.Supp. 713 (D. Mass. 1975). The court must make an 
independent determination as to whether or not entry of a proposed 
consent decree is in the public interest. United States v. Microsoft, 
56 F.3d 1448 (D.C. Cir. 1995).
    What constitutes the ``public interest'' in the context of this 
type of proceeding was discussed at length in United States v. American 
Telephone and Telegraph Company, 552 F.Supp. 131 (D.D.C. 1982). In that 
case, this court indicated that purpose of the antitrust laws was to 
``preserv[e] free and unfettered competition as the rule of trade.''Id. 
at 149 (quoting from Northern Pacific Railway Co. v. United States, 356 
U.S. 1 (1958)). Within that purpose, an antitrust remedy, including a 
consent decree, must ``leave the defendant without the ability to 
resume the actions which constituted the antitrust violation in the 
first place'' or ``effectively foreclose the possibility that antitrust 
violations will occur or recur.'' Id. at 150. In addition, ``antitrust 
violations should be remedied with as little injury as possible to the 
interest of the general public' and to relevant private interests.'' 
Id. at 150 (quoting from United States v. American Tobacco Co., 221 
U.S. 106 (1911)).

II

The final judgment proposed by the parties in this action is deficient 
in a number of respects, and is not in the public interest.

    The Attorney General of Nebraska believes that the final consent 
judgment proposed by the parties in this case is deficient in the first 
instance because it does not take into account the wider context of 
vertical consolidation in the nation's agribusiness system, and instead 
focuses solely on the grain buying activities of Cargill and 
Continental. Consolidation across vertically-related markets is 
increasingly leading to the creation of all-inclusive food supply 
chains in the United States where one company or interrelated group of 
companies can control certain agricultural commodities from their 
creation at the genetic level to their ultimate purchase by the 
consumer. This sort of vertical consolidation will harm competition by 
making entry into the affected markets more difficult, by making the 
extent of actual competition more difficult to estimate, and by forcing 
independent farmers and producers out of business. Allowing the merger 
of Cargill and Continental will make further agribusiness consolidation 
more likely. For one thing, acquisition of Continental's seventy grain 
elevators will enhance Cargill's economic power generally, and allow 
deployment of that economic power across a wide range of other 
agricultural sectors including beef packing, cattle feedlots, pork 
packing, broiler production, turkey production, flour milling, soybean 
crushing and ethanol production. That enhanced economic power will also 
allow Cargill to transfer resources across markets without regard to 
competitive conditions. As a result, the government should have 
considered more than the grain buying operations of Cargill in 
evaluating this merger.
    The proposed final consent judgment also fails to recognize that 
grain handling and grain merchandising is a nationwide and worldwide 
business. In that regard, as noted in the competitive impact statement 
filed herein, Cargill is the second largest grain trader in North 
America and the largest U.S. grain exporter. Continental is the third 
largest grain trader in North America and the third largest U.S. grain 
exporter. Merger of those market shares cannot help but increase the 
concentration in the national and global grain trading and grain 
exporting markets to questionable levels with damaging effects upon 
farmers and consumers in Nebraska and other agricultural states. Yet, 
the government's proposed final consent judgment focuses only on grain 
trading activities in a small number of regional markets.
    The Attorney General of Nebraska is aware of the decision in United 
States v. Microsoft, 56 F.3d 1448 (D.C. Cir. 1995). Consequently, the 
remainder of this amicus curia brief will focus on specific 
deficiencies with respect to the matters alleged in the government's 
Complaint in this case and the proposed final consent judgment 
presented to the court.
A. The final consent judgment fails to take into account the size and 
organization of the sellers in the markets affected by the proposed 
merger.
    In a number of merger cases, courts have given credence to the 
notion that a merger resulting in a larger, more powerful firm may be 
permissible if the companies the merged firm sells to also possess 
market power. United States v. Baker Hughes, Inc., 908 F.2d 981, 984 
(D.C. Cir 1990); F.T.C. v. Elders Grain, Inc., 868 F.2d 901, 905 (7th 
Cir. 1989). For example, in United States v. Country Lake Foods, Inc., 
754 F.Supp. 669 (D.Minn. 1990), the district court recognized the 
ability of large food corporations which were milk purchasers to act as 
a check to the market power of milk processors in a merger involving 
the fluid milk processing industry because the food corporations could 
respond aggressively to price increases and had the capital resources 
necessary to vertically integrate fluid milk processing. That reasoning 
forms the basis for the ``power buyer'' defense to merger enforcement.

[[Page 15999]]

    If the presence of ``power buyers'' in a particular market helps to 
make a proposed merger more acceptable, it necessarily follows that the 
lack of such ``power buyers'' makes a merger less acceptable, because 
powerful sellers in a given market can use their market power to 
exploit small and disorganized buyers. For example, in United States v. 
Tote, Inc., 768 F.Supp. 1064 (D. Del. 1991), the court rejected the 
power buyer defense because there were a large number of small buyers 
in the market at issue. For that reason, among others, the court held 
the merger in question to be anticompetitive. See also F.T.C. v. 
Cardinal Health, Inc., 12 F.Supp.2d 34 (D.D.C. 1998).
    The reasoning underlying the power buyer defense should also be 
applied equally in evaluating the competitive effects of a merger in an 
oligopsony situation. In other words, the anticompetitive effects of a 
merger involving a small number of possible buyers should be evaluated, 
in part, by measuring the number and power of the sellers for those 
buyers. If the sellers are numerous, disorganized and small, then they 
will be unable to respond to the anticompetitive exercise of market 
power by small group of powerful buyers. That is precisely the 
situation in the present case where a small group of buyers in the 
grain buying and marketing industry are able to exert anticompetitive 
power over numerous, disorganized and small farmers selling grain. That 
situation will be exacerbated by the merger proposed under the final 
consent judgment in this case, and for that reason, the final judgment 
is not in the public interest.
B. The proposed final consent judgment does not take into account the 
potential for continuing anticompetitive behavior in the post-merger 
market.
    In its Complaint, the government argues that very few firms buy 
grain within particular draw areas. Government Complaint, p.4. The 
government then contends that in those ``captive draw areas, [a merged] 
Cargill would be in a position unilaterally, or in coordinated 
interaction with the few remaining competitors, to depress prices paid 
to producers and other suppliers because transportation costs would 
preclude them from selling to purchasers outside the captive draw areas 
in sufficient quantities to prevent the price decrease.'' Government 
Complaint, p.4. To remedy this problem in the context of the proposed 
merger, the government simply proposes divestitures in a few of the 
captive draw areas. However, even with the divestitures proposed by the 
Department of Justice, grain buying in the post-merger markets in the 
captive draw areas at issue will still remain heavily concentrated and 
susceptive to collusive and cooperative activity among the remaining 
grain buyers. As a result, the proposed final consent judgment will not 
effectively foreclose the possibility that antitrust violations will 
occur in the future in the captive draw areas. For that reason, it is 
deficient.
C. The proposed final consent judgment fails to take into account the 
impact of global sales or grain buying in the United States.
    A great deal of the grain purchased by Continental and Cargill is 
sold overseas where purchases are based upon factors such as geographic 
area, historic preference or long-term contracts. Those factors often 
reduce the need for competition in buying American grain. However, the 
proposed final consent judgment fails to take those global market 
factors into account in determining what is necessary to maintain 
competitive grain buying in the United States.
D. Under the proposed final consent judgment, there is no assurance 
that the portions of Continental's operations which are divested can or 
will remain a competitive force in the markets in question.
    The government notes, in its Complaint, that ``[g]rain traders such 
as Cargill and Continental operate extensive grain distribution 
networks, which facilitate the movement of grain from farms to domestic 
consumers of these commodities and to foreign markets.'' Government 
Complaint at 3. Given this need for ``extensive grain distribution 
networks.'' it is unclear as to how the remnants of Continental 
divested as a result of the final consent judgment will compete 
effectively in the markets where they are located, since they may not 
be part of such a distribution network with its competitive flexibility 
and access to information about grain flows. In addition, the 
acknowledged need for ``extensive grain distribution networks'' in 
these markets will make it highly unlikely that new firms will enter 
these markets and provide additional competition. Indeed, the 
Department of Justice concedes in its Complaint that new entry into the 
grain buying business is unlikely. Government Complaint at 6.
E. The proposed final consent judgment fails to take into account the 
effects of removal of Continental as potential competitor to Cargill.
    In United States v. Penn-Olin Chemical Co., 378 U.S. 158, 173-4 
(1964), the United States Supreme Court stated:

    [t]he existence of an aggressive, well equipped and well 
financed corporation engaged in the same or related lines of 
commerce waiting anxiously to enter into an oligopolistic market 
would be a substantial incentive to competition which cannot be 
underestimated.
    In the present case, Continental currently possesses the grain 
distribution network and other resources to potentially challenge 
Cargill in the grain buying business. With Continental taken out of 
that business as a result of the merger proposed herein, Cargill will 
face much less pressure to pay competitive prices and compete in grain 
buying markets. This is particularly true given the difficulty of entry 
into the market by new firms.
F. The final consent judgment fails to take into account other statutes 
which Congress intended should be considered in making determinations 
regarding agricultural markets.
    A primary rule of statutory construction is that when a court 
interprets multiple statutes dealing with a related object or subject, 
those statutes are in pari materia and should be construed together. 
Common Cause v. Federal Election Commission, 842 F.2d 436 (D.C. Cir. 
1988); Linquist v. Bowen, 813 F.2d 884 (8th Cir. 1987). Essentially, if 
a number of separate statutes relate to the same thing, they are in 
pari materia, and all ought to be taken into consideration in 
construing any one of them. United States v. Freeman, 44 U.S. 556 
(1845). In the area of agricultural markets, Congress has passed a 
number of statutes in addition to the provisions of the Sherman Act and 
the Clayton Act which are in pari materia with those antitrust statutes 
because they reflect congressional concerns about economic 
concentration and the disproportionate bargaining power of farmers. All 
of those statutes should have been considered in fashioning the 
proposed final consent judgment in this case. Because they were not, 
that final consent judgment is deficient.
    First of all, the Department of Justice failed to consider the 
implications of the Packers and Stockyards Act of 1921, 7 U.S.C. 181 et 
seq. (the ``PSA''), in developing the final consent judgment. The PSA 
was passed after the Sherman, Clayton and Federal Trade Commission

[[Page 16000]]

Acts, and was designed to go beyond the broad language of those 
statutes. Wilson & Co. v. Benson, 286 F.2d 891 (7th Cir. 1961). Among 
other things, the PSA was directed at the lack of competition between 
agricultural buyers and the attendant possible depression of producers' 
prices. Swift & Co. v. United States, 393 F. 2d 247 (7th Cir. 1968). In 
the present case, one of the government's concerns with the proposed 
merger is that prices paid to farmers could be depressed in a post-
merger market. Government Complaint at 6. The PSA supports the notion 
that particular attention should be directed to mergers which implicate 
marketing for farmers.
    Another statute with implications for the merger under 
consideration which was not considered by the government is the Capper-
Volstead Act, 7 U.S.C. 291-2. That statute specifically exempted 
agricultural cooperatives from the antitrust laws because Congress 
intended to treat farmer cooperatives differently from typical 
corporations and to give farmers the opportunity to build their 
bargaining power relative to corporate buyers. Fairdale Farms, Inc. v. 
Yankee Milk, Inc., 635 F.2d 1037 (2nd Cir. 1980). This was done 
deliberately to enable farmers to organize and work together so as to 
obtain and exercise marketing power. Kinnet Dairies, Inc. v. Dairymen, 
Inc., 512 F.Supp. 608 (M.D. GA. 1981). Any merger which works against 
those principles to increase the power of buyers at the expense of 
farmers should therefore be subject to special, heightened scrutiny.
    Finally, the proposed final consent judgment fails to consider the 
implications of the Agricultural Fair Practices Act of 1967, 7 U.S.C. 
2301-2306 (the ``AFPA''). That Act was intended to prevent corporations 
from interfering in the formation of collective marketing organizations 
involving farmers. The overriding purpose of the legislation was the 
protection of farmers' rights to organize cooperatively. Butz v. Lawson 
Milk Co., 386 F.Supp. 227 (N.D. OH. 1974). Again, AFPA's recognition of 
the potential for abusive practices by agricultural processors shows 
congressional concern with the potential market power of agricultural 
buyers which should have been reflected to a greater degree in the 
final consent judgment which is now before this court.
G. The final consent judgment fails to set out any benefits or 
efficiencies of the proposed merger.
    The Department of Justice obviously has concerns about the 
anticompetitive effects of the merger in this case as witnessed by the 
divestitures required in the proposed final consent judgment and the 
other allegations in the Complaint. Yet, the papers prepared by the 
government do not set out any reasons for approving the proposed merger 
after the divestitures such as post-merger efficiencies which will 
result from the action. Absent any economic benefits resulting from the 
merger in this case, it is difficult to understand how this merger can 
be in the public interest in light of the other potential 
anticompetitive problems set out above.

III

If necessary, this court should appoint a special master to assist in 
determining if the proposed final consent judgment in this case is in 
the public interest

    For all the various reasons set out above, the Attorney General of 
Nebraska contends that the proposed final consent judgment in this case 
is not in the public interest as required by 15 U.S.C. 16(e). However, 
should this court not determine that such a finding is appropriate at 
the present time, the Attorney General of Nebraska urges the court to 
appoint a special master in this case as contemplated by 15 U.S.C. 
16(f) to hear evidence and to make a recommendation to the court as to 
the efficacy of the proposed final consent judgment. The appointment of 
a special master in this case is based upon the complex nature of the 
agricultural markets at issue and the various statutes discussed above 
which interact upon the application of the antitrust laws in this 
context.

Conclusion

    For the reasons discussed above, the Attorney General of Nebraska, 
as amicus curiae, urges the court to reject the proposed final consent 
judgment in this case as not in the public interest. Alternatively, the 
Attorney General of Nebraska urges the court to appoint a special 
master in this case who can assist the court in analyzing the 
particular agricultural markets at issue.

    Dated this 21st day of October, 1999.
Don Stenberg, #14023
Attorney General of Nebraska.
Dale A. Comer, #15365
Assistant Attorney General, 2115 State Capitol, Lincoln, NE 68509-8920, 
Tel: (402) 471-2682.

Certificate of Service

    The undersigned hereby certifies that a copy of the foregoing Brief 
Of The Attorney General Of Nebraska As Amicus Curiae has been served 
upon the parties herein by mailing each of those parties a true and 
correct copy of the same, via first-class United States Mail, postage 
prepaid, addressed to the parties' counsel of record as follows:


Robert L. McGeorge, Esq.,
Attorney, U.S. Department of Justice, 325 Seventh Street, NW, Suite 
500, Washington, DC 20530.
Marc G. Schildkraut, Esq.,
Howrey & Simon, 1299 Pennsylvania Avenue, NW, Washington, DC 20004.
Paul T. Denis, Esq.,
Swidler, Berlin Shereff Friedman, LLP, 3000 K Street, NW, Suite 300, 
Washington, DC 20007-5116.
Jack Quinn, Esq.,
Arnold & Porter, 555 Twelfth Street, NW, Washington, DC 20004.
    On this 21st day of October, 1999.
Dale A. Comer,
Assistant Attorney General.

Attorney General of New Mexico

6301 Indian School Rd., NE., Suite 400, Albuquerque, New Mexico 
87110; (505) 841-8098, FAX: (505) 841-8095

October 12, 1999.
FACSIMILE NUMBER (202) 307-2784
Roger W. Fones,
Chief, Transportation, Energy & Agriculture Section, Antitrust 
Division, United States Department of Justice, 325 Seventh Street, 
NW., Suite 500, Washington, DC 20530.

Re: United States v. Cargill, Incorporated and Continental Grain 
Company, Case Number 1:99CV0187 (GK)

    Dear Mr. Fones: I want to take this opportunity to express my 
concerns for small farmers and ranchers and the serious threats I 
believe they face from the ever-increasing rate of consolidation in 
agricultural industries, of which the pending Cargill-Continental 
Grain Company transaction is but one example.
    Not only is consolidation occurring on a horizontal level--that 
is between direct competitors--but large, economically powerful 
companies are becoming more vertically integrated. Increasingly, 
these vertically integrated companies are able to exercise 
significant power over the food chain, all the way from production 
to the packaged product. This can have serious adverse effects on 
our economy and the important role performed by small farmers and 
ranchers throughout our nation. As Minnesota Attorney General Hatch 
pointed out in his May 7, 1999 letter concerning this matter to 
United States Assistant Attorney General Klein, and consistent with 
the comments submitted to you by Attorney General Don Stenberg of 
Nebraska dated September 7, 1999, reliable studies indicate that the 
gap between rising food retail prices and falling prices to farmers 
and ranchers has been growing for some time. This widening gap is 
the result, at least in part, of growing economic power of 
vertically integrated agribusinesses and increasingly concentrated 
markets and suggests that these markets may

[[Page 16001]]

already be dysfunctional in some important ways.
    Given the state of the law interpreting Section 7 of the Clayton 
Act, I do not challenge the consent judgment proposed by the 
Department of Justice in this matter as being legally or factually 
unsupported. Certainly the divestitures and other provisions 
required by the proposed consent judgment ought to ameliorate the 
anticompetitive effects of the acquisition to some extent. However, 
even with the required divestitures, this transaction will likely 
decrease the number of significant competitors in the national grain 
trading market in the United States. It will also bolster Cargill's 
already significant market presence both in markets in which Cargill 
and Continental currently are direct competitors and in markets such 
as those in the areas of animal feed, feeding cattle and processing 
cattle, in which Continental is not currently a significant 
competitor.
    Thus, I would urge that these difficult issues be dealt with as 
comprehensively as possible and that to the extent possible the 
Department of Justice actively advocate administrative and 
legislative responses that will enhance and invigorate competition 
in the agricultural sector of our economy. In addition, the 
antitrust laws in this sector of the economy should be effectively 
and timely enforced, especially to protect the valuable interests of 
small farmers and ranchers. I hope that any additional moves toward 
further concentration in agricultural markets will be carefully and 
thoroughly scrutinized.

      Sincerely yours,

Patricia A. Madrid,
Attorney General.
cc: Attorney General Michael Hatch
    Attorney General Don Stenberg

State of North Dakota, Office of Attorney General

State Capitol, 600 E Boulevard Ave, Bismarck, ND 58505-0040; (701) 
328-2210; Fax (701) 328-2226.

October 11, 1999.
Mr. Roger Fones,
Chief, Transportation, Energy, and Agriculture Section, Antitrust 
Division, US Department of Justice, 325 7th St. NW, Rm 500, 
Washington, DC 20530.

    Dear Mr. Fones: The following comments are submitted concerning 
the proposed merger of Cargill, Incorporated, and Continental Grain 
Company. Because there is little competition between Cargill and 
Continental on the local level in North Dakota, my principal concern 
has been with this merger's potential impact on the grain export 
market. It is encouraging that the Antitrust Division responded to 
these concerns by requiring divestiture by Cargill of its Seattle 
port elevator and by placing limitations on any future throughout 
agreement with the subsequent acquirer of that facility.
    Nevertheless, I continue to have serious concerns about the 
increasing consolidation among the agribusiness firms who purchase 
the output of North Dakota's farmers. I am disappointed with the 
apparent inability of present day antitrust law to prevent this 
consolidation and the resultant injury to our farmers, the producers 
of the agricultural bounty our country enjoys.
    Over the past decade, we have witnessed ever-larger mergers 
among ever-more-concentrated competitors. And all that the antitrust 
enforcement agencies, my own included, seem capable of doing in 
response is to tinker around the edges. At a minimal cost of a few 
divestitures and some relatively insignificant restrictions on post-
merger conduct, agribusiness companies in the livestock, meatpacking 
industries, and now the grain industry continue to grow larger, more 
concentrated and more powerful. As a result, our farmers now 
confront the most powerful concentrations of global economic 
interests the world has ever known.
    The economic history of North Dakota agriculture is largely the 
story of the unequal balance of power between our farmers and the 
large agribusiness and transportation interests with which they must 
deal. While producer cooperatives have played a significant role in 
counter-balancing these economic forces and hold substantial promise 
for the future, economic disorganization is the natural result of 
having a large number of farmers, geographically dispersed and 
producing a wide variety of commodities. The original antitrust laws 
were enacted over one hundred years ago in significant measure in 
response to calls to protect farmers from the ravages of raw 
economic power and to moderate its negative effects on society.
    Unfortunately, these laws and the modern trends in their 
enforcement are proving inadequate to the task. Modern antitrust 
policy has lost sight of its agrarian roots. The farm sector is 
hemorrhaging and that bedrock institution, the family farm, is in 
mortal danger as a result of low commodity prices brought on, in 
part, by the imbalance of economic forces the antitrust laws were 
supposed to prevent.
    I believe that the time has come to rethink antitrust analysis, 
particularly in the farmer-agribusiness context. It is time to 
forthrightly address the failures of economic analysis in this areas 
as well to give greater consideration to the importance of non-
economic concerns in antitrust enforcement. I intend to work with my 
fellow state attorneys general to initiate this process. I hope that 
we will be able to count on the Antitrust Division for assistance as 
we proceed.
    In light of the above comments, I would ask that the Antitrust 
Division reconsider its approval of this merger.
    Thank you for your consideration of these comments.

      Sincerely,

Heidi Heitkamp,
Attorney General.

State of South Dakota Office of Attorney General, 500 East Capitol 
Avenue, Pierre, South Dakota 57501-5070; Phone (605) 773-3215, FAX 
(605) 773-4106

October 5, 1999.
Roger W. Fones,
Chief, Transportation, Energy, and Agricultural Section, Antitrust 
Division, United States Department of Justice, 325 7th Street, NW, 
Room 500, Washington, DC 20530.

Re: United States of America v. Cargill Incorporated and Continental 
Grain Company.

    Dear Mr. Fones: In my capacity as Attorney General of the State 
of South Dakota I am filing these written comments in opposition to 
the proposed consent decree in the above referenced action pursuant 
to the Antitrust Procedures and Penalties Act, 15 U.S.C. Sec. 16.
    As you are aware, prior to the Department of Justice's proposed 
consent decree, I joined the Minnesota Attorney General's letter 
expressing opposition to Cargill Inc.'s proposal to acquire the 
worldwide commodity marketing business of Continental Grain Company 
and urged the Department of Justice to oppose the proposed merger. 
It was, and still is my opinion, that the proposed merger may well 
reduce competition. The resulting consequences on South Dakota's 
agricultural industry could be serious. While the proposed consent 
decree would require Continental to divest itself of a couple of 
port, river and rail elevators and would prohibit Cargill from 
acquiring certain interests and require entry into a throughput 
agreement, these measures are simply inadequate to fully address the 
long term consequences of this merger of two global grain industry 
giants.
    The Department of Justice, in its Complaint and Competitive 
Impact Statement, distinctly explained that if the acquisition of 
Continental's worldwide commodity marketing business is permitted to 
proceed, there will be a substantial lessening of competition for 
grain purchasing services to farms and other suppliers. As the 
Department of Justice further explained, this will likely result in 
many American farmers and other suppliers receiving lower prices for 
their grain and oil seed crops. The proposed consent decree simply 
does not go far enough to prevent the occurrence of the events 
contained in these legal documents.
    The Cargill/Continental merger is not adequately addressed by 
simply dealing with market implications of the merger on a region by 
region basis. The geographic market for grain is nationwide with 
worldwide implications.
    Further, it does not appear that Department of Justice has 
adequately considered whether the divested remnants of Continental 
will be a competitive force given the nature of the grain market. It 
also appears that the Department of Justice did not adequately 
consider the economic disparities that currently exist in the grain 
market power over this nation's farmers who are many in number and 
wield very limited power. The merger only increases this disparity.
    The federal antitrust laws were enacted over a hundred years ago 
in part to address the large agricultural trusts that existed in the 
late 1800's. As a result these large trusts were broken up. Now, 
despite the antitrust laws, we are experiencing increasing 
concentration in all areas and aspects of the agricultural industry. 
The concentration is both vertical and horizontal in nature. Such 
concentration and resulting market power is the problem

[[Page 16002]]

that the antitrust laws were intended to rectify. If a merger of the 
magnitude of that proposed between Cargill and Continental is 
allowed to go forward as currently proposed in the consent decree, 
the purpose behind antitrust laws will be defeated. This would be a 
very big step backwards.
    South Dakota has the smallest attorney general's office in the 
nation. I simply do not have the resources to take on this merger 
and neither do the offices for the surrounding states. No matter how 
much myself and the Attorneys General of the surrounding states are 
opposed to the merger we are not in a position to go to war with 
Cargill and Continental. Only the Department of Justice is 
sufficiently staffed and financed to contest a merger of this size.
    As the Attorney General from an agricultural state, I have 
witnessed first hand the devastating impact upon ranchers and 
farmers that can result from market concentration by commodity 
purchasers. The proposed merger will only make the situation worse. 
The grain and livestock products produced by this nation's farmers 
and ranchers are the lifeblood to this great country. The Department 
of Justice should do whatever is necessary to preserve the ability 
of our farmers and ranchers to conduct business in a competitive, 
free and open market place. Only the prevention of the proposed 
merger is an adequate remedy. The proposed consent decree is simply 
inadequate and as such I object to its entry.
      Yours truly,

Mark Barnett,
Attorney General, State of South Dakota.

Tab 3

American Agriculture Movement

AAM Inc., 2898 Audrain Road, #114, Sturgeon, MO 65284

October 10, 1999.
Chief, Transportation, Energy, & Agriculture Section, Antitrust 
Division, U.S. Department of Justice, 325 Seventh St., N.W., Suite 
500, Washington, DC 20530.

    Dear Roger W. Fones: Please place these comments in the Federal 
Register.
    AAM wants to state its opposition to:

Cargill's announced purchase of Continental Grain's merchandising 
business;
Smithfield Foods purchase of Murphy Family Farms and Tyson Food's 
Pork Group.

    Oligopoly is just a fancy word for monopoly. The Clayton & 
Sherman Antitrust Laws were enacted after the release of THE JUNGLE 
by Sinclair Lewis concerning excesses in the slaughter industry. 
Today's excesses are more extreme but hurt farmers and ranchers more 
directly and pose a threat to the consumer. The U.S. cheap food 
policy will fail with the continued disregard of these laws.
    With the present trend to consolidation in the livestock 
industry, 3 or 4 vertically integrated companies not only 
disproportionately control several livestock sectors but food 
production, distribution and sales. This removes all pretense of 
fair and open competitive markets.
    The Packers And Stockyard Act must also be rigidly enforced to 
protect small and medium livestock producers.
      Sincerely,

Edward M. Fashing,
Missouri Vice President Communications.

Animal Welfare Institute

P.O. Box 3650, Washington, D.C. 20007-0150; Telephone: (202) 337-
2332, Fax (202) 338-9478

October 11, 1999.
Hon. Gladys Kessler,
Fax: 202-354-3442.

    Dear Judge Kessler: I am writing to respectfully request that 
the deadline for comment on the Cargill/Continental acquisition be 
extended by the Department of Justice for another sixty days to 
December 12, 1999.
    It is my understanding that the Department of Justice states, 
``The court's role in protecting the public interest is one of 
ensuring that the government has not breached its duty to the public 
in consenting to the decree.''
    I address this letter to you because of the Department's failure 
to act in the blatant current case affecting millions of animals 
suffering in hog factories: the acquisition by Smithfield Foods, 
first of Murphy Farms and not of Tysons hog component. All of these 
huge corporations employ the same cruel methods of hog production 
and, by their ``vertical integration,'' are destroying family farms 
at a terrifying pace.
    Because of the studies of the Animal Welfare Institute and its 
long-term efforts to protect family farmers who raise pigs humanely, 
I am responsible, as President of the Animal Welfare Institute, for 
a detailed grasp of this huge problem, of which animal feed is a 
major component. The Cargill/Continental acquisition impinges 
heavily upon this feed and is harmful to the family farmers whose 
ability to compete in a system increasingly monopolized by 
agribusiness is being zeroed out.
    The general public, likewise, is being cheated because the anti-
trust laws are not protecting the public, as they are intended to 
do, by proper enforcement.
      Respectfully yours,

Christine Stevens,
President.

    P.S. You may be amused by the quotation from Art Buchwald which 
was recently brought to my attention through ``The Agribusiness 
Examiner,'' issued by A.V. Krebs, Editor and Publisher. I attach a 
copy of page 14.

ANIMAL WELFARE INSTITUTE

``THANK GOD FOR THE FREE ENTERPRISE SYSTEM''

    In his book of essays Down the Seine and Up the Potomac (G. P. 
Putnam's Sons: 1977) political humorist Art Buchwald imagines a 
scenario where two corporations--Samson Securities and Delilah 
Company--asked the head of the Justice Department's Anti-Trust 
Division if the two companies could merge. At the time Samson 
Securities owned everything east of the Mississippi River, while 
Delilah Company owned everything west of the river. Initially, the 
head of the Anti-Trust Division indicated that he might have 
reservations about the merger of the only two companies left in the 
United States.
    ``Our department,'' he said, ``will take a close look at this 
proposed merger. It is our job to further competition in private 
business and industry, and if we allow Samson and Delilah to merge 
we may be doing the consumer a disservice.''
    The chairman of Samson protested vigorously that merging with 
Delilah would not stifle competition, but would help it. ``The 
public will be the true beneficiary of this merger,'' he said. ``The 
larger we are, the most services we can perform, and the lower 
prices we can charge.''
    The president of Delilah backed him up. ``In the Communist 
system the people don't have a choice. They must buy from the state. 
In our capitalist society the people can buy from either the Samson 
or the Delilah Company.''
    ``But if you merge,'' someone pointed out, ``there will be only 
one company left in the United States.''
    ``Exactly,'' said the president of Delilah. ``Thank God for the 
free enterprise system.''
    The Anti-Trust Division of the Justice Department studied the 
merger for months. Finally the Attorney General made this ruling. 
``While we find drawbacks to only one company being left in the 
United States, we feel the advantages to the public far outweigh the 
disadvantages.''
    ``Therefore, we're making an exception in this case and allowing 
Samson and Delilah to merge.''
    ``I would like to announce that the Samson and Delilah Company 
is now negotiating at the White House with the President to buy the 
United States. The Justice Department will naturally study this 
merger to see if it violates any of our strong anti-trust laws.''

Catholic Charities, Diocese of Sioux City

October 6, 1999.
Roger W. Fones,
Chief, Transportation, Energy and Agriculture Section, Antitrust 
Division, United States Department of Justice, 325 Seventh Street, 
NW, Suite 500, Washington, D.C. 20530.

    Dear Sir: We are writing in regard to the Department of 
Justice's ``Final Judgement'' relative to Cargill's purchase of 
Continental Grain's grain merchandising division.
    It is our understanding that the Department filed a formal 
``Complaint'' with the U.S. District Court charging that Cargill's 
purchase would ``substantially lessen competition for the purchase 
of corn, soybeans and wheat in each of the relevant geographic 
markets, enabling it unilaterally to depress prices paid to farmers. 
The proposed transaction will also make it more likely that the few 
remaining grain trading companies that purchase corn, soybeans and 
wheat in these markets will engage in anticompetitive coordination 
to depress farm prices.''
    We also understand that on the same day this ``Complaint'' was 
filed, the Department filed a consented ``Final Judgement'' agreed 
to by all parties.

[[Page 16003]]

    This makes no sense to those of us who agree with the 
Department's own finding in its ``Complaint''.
    This purchase, if approved in its present form, will further 
accelerate the vertical integration of the agricultural sector with 
dire consequences for family farm agriculture, rural America and the 
consumers of our food supply.
    We urge the Department of Justice to withdraw its ``Final 
Judgement''; reaffirm the adverse impact of the Cargill purchase 
upon the economic and social structure of rural America and to stand 
by its original ``Complaint''.

      Very truly yours,

Marilyn Murphy,
Social Concerns Facilitator/Rural Life Contact.

Clean Water Action Alliance

Mr. Roger W. Fones,
Chief, Transportation, Energy & Agriculture Section, Antitrust 
Division, United States Department of Justice, 325 Seventh Street, 
N.W., Suite 500, Washington, D.C. 20530.

Re: United States of America v. Cargill, Inc. and Continental Grain 
Company

    Dear Mr. Fones: I am writing on behalf of our organization to 
object to the proposed final judgment in this case. The approval of 
the consent decree is not in the public interest and is not 
consistent with the public policy underlying federal antitrust laws. 
Our organization has over 40,000 members state-wide. We are 
concerned with the growing concentration in agriculture and the 
resulting economic impact on family farmers and environmental 
degradation of our rural communities. Antitrust laws have long 
recognized that concentration in agricultural industries is harmful 
to farmers. These protections have not been enforced to prevent 
extensive concentration in the meatpacking and other agricultural 
industries which are now being controlled by a small number of 
agribusiness giants.
    Both the DOJ/FTC and NAAG Guidelines raise serious questions and 
grave concerns regarding the economic effect of the proposed 
Cargill-Continental merger. The grain industry is already heavily 
concentrated, leaving farmers who sell their grain to exporters 
vulnerable and with very limited options. Both Cargill and 
Continental are among the top four corn and soybean exporters 
nationwide. Cargill estimates that together they will control 35% of 
U.S. grain exports. This type of extensive control in the market 
share by Cargill and Continental extends beyond grain processing to 
animal feed and meat-packing. If the economic power of these mega-
firms is not controlled, a few large corporations will control the 
marketplace and our food supply which is harmful to both farmers and 
consumers.
    The federal antitrust laws are important to allow every business 
entity--no matter how small--the freedom to compete. The rapid rate 
of concentration in the agricultural sector is threatening the 
ability of the small farmer to compete effectively in the 
marketplace. Not only are farmers suffering because of the lack of 
access to markets and unfair prices paid to them, but rural 
communities are experiencing negative economic impacts as corporate 
agribusiness giants continue to consolidate and control more and 
more of our food system. Many small towns in the state depend on 
farming income to support their local infrastructures--schools, 
banks, churches and small businesses. The trend toward vertical and 
horizontal integration is threatening the economic viability of 
these communities.
    Cargill has utterly failed to addressed the above-mentioned 
concerns generated by excessive vertical and horizontal integration 
in the industry. We urge you to reject the proposed consent decree.

    Sincerely,

Suzanne R. McIntosh, Esq.,
Program Director.

Farmland Co-Op Inc., A Pro Farmers Choice

P.O. Box 276, Brush, Colorado 80723; Telephone 1-970-842-5059, Fax 
1-970-842-5667

October 8, 1999.
Roger W. Fones,
Chief, Transportation, Energy & Agriculture Section, Antitrust 
Division, United States Department of Justice, 325 Seventh Street, 
N.W., Suite 500, Washington, DC 20530.

    Dear Mr. Fones: It is my belief that the merger of Cargill and 
Continental Grain has to be stopped. Our farmers have realized for a 
long time that without market competition, they suffer from pricing 
that is below what can be achieved through active competition. This 
lack of competition threatens the future of our agricultural system. 
It may be all right for the large corporations and regional 
entities, but I have to look out for my individual farmers. I do not 
think you take consolidation seriously. When you look a 
consolidation I believe you have to look at all their activities 
including strategic alliances, and joint ventures. A full-blown 
combination of assets is not telling the whole story. Concentration 
of large companies is one of the reasons for lower prices even 
though it may be only one of many. I do not see how you can say that 
some of these merging companies preserve competition. If you truly 
believe this I would like to be able to explain that to my farmers. 
You as a representative our political system need to step up to the 
plate and address this growing concern of rapid consolidation. We 
need to be more pro active in our communities and in our state by 
even court actions to curtail market concentration.
    I represent a local cooperative association of approximately 
1000 producers. In conversations with the top 165 growers, I can say 
that they know the results and have been impacted from no 
competition to placed competition in the grain market in our 
community. In 1997 we had only one local entity purchasing grain. In 
1998 after a partnership with us that opened a competitive elevator, 
the price offered to our growners increased $0.5 a bushel and the 
competitor was forced to pay for protein. Without this action, how 
many dollars do you think would have gone on in the hands of a large 
corporation? What benefit does increased concentration have on our 
American agriculture?
    I don't know just exactly how long these mergers will take to 
impact our local farmers. I do not that when Farmland Industries and 
Cenex Harvest States consolidated their petroleum operations into 
Country Energy L.L.C. that we took an enormous hit on product 
pricing and had to go to the outside. I hated to do that, but our 
farmers need competition in the market place. What impact did this 
joint venture for most cooperatives that had not sought out other 
supplies? They were forced to pay a higher price for this 
consolidation. I'm am against these mergers if they do not benefit 
our producers. I just believe that we need to protect our farmers by 
making sure that competition continues to be strong. Just thought I 
would share my opinion with you.

      Thank you,

Glenn A. Babcock,
General Manager.


Institute for Agriculture and Trade Policy

2105 First Avenue South, Minneapolis, MN 55404-2505

October 7, 1999.
Mr. Roger W. Fones,
Chief, Transportation, Energy & Agriculture Section, Antitrust 
Division, United States Department of Justice, 325 Seventh Street 
N.W., Suite 500, Washington, D.C. 20530.

Re: United States of America v. Cargill, Inc. and Continental Grain 
Company

    Dear Mr. Fones: I am writing to express IATP's opposition to 
Cargill's proposed acquisition of Continental Grain Company, an 
acquisition which would unify the second and third largest grain 
traders in North America, which export 40 percent of American 
agricultural commodities.
    Competition in agricultural markets is rapidly declining in the 
face of mergers and acquisitions and a plethora of new corporate 
relationships including joint ventures, strategic alliances or 
partnerships, interlocking directorates and partial ownership. In 
its analysis, the Department of Justice failed to recognize the 
wider concentration in agriculture markets beyond grain buying to 
include handling, processing and merchandising both domestically and 
globally.
    The principle result of this concentration would be a 
significant increase in the imbalance of power favoring agribusiness 
at the expense of the farmer. This growing imbalance would 
exacerbate the trend toward lower prices for farmers and likely 
result in higher prices for consumers.
    While the proposed consent decree requires divestiture of some 
grain elevators in certain locations, it does not, in our opinion, 
meet the spirit and the letter of federal anti-trust law. We must 
use our anti-trust laws to preserve our free market system and 
ensure competition that produces fair prices for both producers and 
consumers.
    Thank you for your attention in this matter.


[[Page 16004]]


      Sincerely,

Niel Ritchie,
Policy Analyst.


Dated: November 10, 1999.
Judge Gladys Kessler,
U.S. District Court, for the District of Columbia, 333 Constitution 
Ave. N.W., Washington, D.C. 20001.

Re: United States of America v. Cargill, Inc. and Continental Grain 
Company

    Dear Judge Kessler: Presently before you awaiting your approval 
is a ``Final Judgment'' filed by the U.S. Department of Justice 
relative to the purchase of the grain merchandising division of 
Continental Grain Co. by the Cargill Corp.
    Legal precedent, according to the Department of Justice, 
requires that ``[t]he balancing of competing social and political 
interests affected by a proposed antitrust consent decree must be 
left, in the first instance, to the discretion of the Attorney 
General.--The court's role in protecting the public interest is one 
of insuring that the government has not breached its duty to the 
public in consenting to the decree. The court is required to 
determine not whether a particular decree is the one that will best 
serve society, but whether the settlement is within the reaches of 
the public interest.''
    In its July 8, 1999 ``Final Judgment'' I believe in fact that 
the Department of Justice has ``breached its duty to the public in 
consenting to the decree'' and that its ``Final Judgment'' is not 
``within the reaches of the public interest.''
    Clearly, as the Department of Justice's own ``Complaint'' states 
the Cargill purchase would ``substantially lessen competition for 
purchases of corn, soybeans, and wheat in each of the relevant 
geographic markets, enabling it unilaterally to depress the prices 
paid to farmers. The proposed transaction will also make it more 
likely that the few remaining grain trading companies that purchase 
corn, soybeans, and wheat in these markets will engage in 
anticompetitive coordination to depress farm prices.''
    Using the Department of Justice's own figures and criteria we 
see in its ``Complaint'' that even before this announced purchase 
the U.S. grain trade was already dominated, if not monopolized, by 
Cargill and nothing in the Department of Justice's ``Final 
Judgment'' addresses itself to that important issue.
    Likewise, the Department of Justice must consider more that the 
grain buying operations of Cargill. The acquisition of Continental's 
seventy elevators will enhance the economic power of Cargill as a 
general matter. such a result concerns farmers because Cargill's 
assets and economic power can be deployed across a range of 
agricultural sectors.
    For example, Cargill stands out as a top-four firm in beef 
packing, cattle feedlots (where Continental is the largest), pork 
packing, broiler production, turkey production, animal feed plants, 
grain elevator capacity, flour milling, dry corn milling, wet corn 
milling, soybean crushing, and ethanol production. Such a dominant 
position across many agricultural markets will allow Cargill to 
transfer resources between sectors according to the economic 
conditions that are prevailing at a given time.
     The ability to transfer assets will allow Cargill to maintain 
its dominant status in all of these markets irrespective of its 
competitive prowess, Unlike farmers, who are forced into bankruptcy 
after a few bad seasons, Cargill will maintain its dominant status 
over time regardless of economic performance over the short-term. 
With Continental's assets. Cargill will become an even more powerful 
and ``sophisticated'' firm, even more capable of strategic, 
cooperative, and anti-competitive behavior.
    As the Kansas Cattlemen's Association Chairman I, Michael L. 
Schultz am acting on behalf of our members to state that we are 
opposed in the continual mergers and acquisitions that are becoming 
common place in our society. These mergers do have detrimental 
effects on our communities by taking the wealth out of the community 
and destroying competition and family life, which is what built this 
country.
    We have seen the effects of the consolidation in the cattle 
industry and its negative effects on our industry and communities. 
It is mentally conditioning that has taken over, along with great 
amounts of money from the corporations to pressure the political and 
legal systems to allow these mergers to continue. We are not sure 
where it will end, possibly when we have 1 company in the U.S.A., 
Russia and China then will we have enough consolidation in our 
society.
    We ask that you enforce the anti-trust laws to ensure 
competition in the market, once competition is reduced the 
corporations will not pass the savings or profits back to the 
producers or consumers of which they claim. A great example for 
doing the reverse is the breakup of Ma-Bell. It produced more 
competition in the telecommunication industry and now we have 
competition, great phone rates, cellular service, etc. This is what 
drives creativity and healthy communities. In Kansas a population of 
less than 3300 serves over 80% of the communities. We do need your 
support to end the death of our communities, competition will ensure 
that small communities survive.
    In the name of economic and social justice and the preservation 
of the family farm system of agriculture in the United States I urge 
you to recommend that the Department of Justice withdraw its ``Final 
Judgment,'' study in far greater detail this ill-advised sale and 
carefully consider the grave anti-trust issues that it presents and 
the dire consequences to both producers and consumers of our food 
supply.

Michael L. Schultz,
Chairman, Kansas Cattlemen's Association.

Minnesota Catholic Conference

475 University Avenue W., St. Paul, Minnesota 55103-1996) Phone 
(651) 227-8777, Fax (651) 227-2675

September 23, 1999.
Mr. Roger W. Fones,
Chief, Transportation, Energy & Agriculture Section, Antitrust 
Division, 325 Seventh Street N.W., Suite 500, Washington, D.C. 
20530.

Re: United States of America v. Cargill, Inc. and Continental Grain 
Company

    Dear Mr. Fones: Pursuant to the Antitrust Procedures and 
Penalties Act, I am writing to object to the proposed final judgment 
in this case. The approval of the consent decree is not in the 
public interest and is not consistent with the public policy 
underlying federal antitrust statutes.
    The proposed consent decree requires divestiture of certain 
grain elevators in specified locations, but otherwise approves the 
merger of the second and third largest grain traders in North 
America, which export 40 percent of American agricultural 
commodities. This continued concentration of commodity exporters 
violates the spirit and the letter of the federal antitrust laws.
    The increasing concentration in agricultural marketing and 
processing will mean continued low prices for farmers and higher 
prices for consumers. It was this very type of concentration, which 
lead to the creation and passage of the first federal antitrust 
laws.
    The primary flaw in the U.S. Justice Department's analysis is 
that it failed to recognize the wider concentration in agriculture 
markets beyond grain buying to include grain handling and 
merchandizing both a nationwide and worldwide business.
    The proposed merger between Cargill and Continental fails to 
explain what benefits will be produced. The economies of scale of 
these two corporations merging will not lead to increased profits. 
Rather, the increased profits will come on the backs of the farmers 
receiving a lower price for their grain and consumers paying higher 
prices for their products, the very consequence antitrust statutes 
seek to prevent.
    Catholic Social Teaching states a firm belief in the principle 
that the economy exists for the people, not the people for the 
economy; In this merger there is a threat to that principle and 
therefore I urge you to reject the proposed consent decree.

      Sincerely,

Thomas (Toby) Pearson,
Director of Social Concerns, Minnesota Catholic Conference.

Missouri Farm Bureau Federation

P.O. Box 658, 701 South Country Club Drive, Jefferson City, MO 
65102 / (573) 893-1400

July 13, 1999.
Mr. Roger Fones,
Chief, Transportation, Energy and Agriculture Section, Antitrust 
Division, US Department of Justice, 327 7th Street, NW, Suite 500, 
Washington, DC 20530.

    Dear Mr. Fones: We appreciate the Justice Department's scrutiny 
of the proposed sale of Continental Grain Company's Commodity 
Marketing Group to Cargill, Incorporated and believe the 
stipulations included in the consent decree are warranted. The 
preservation of competition at the local level is of the utmost 
importance; agricultural producers can ill afford consolidation that 
further depresses commodity prices. While the Justice Department 
complaint states the proposed Cargill/Continental sale would have 
adversely affected competition in some

[[Page 16005]]

areas, we urge the Justice Department to conduct a similar review of 
purchase offers made for the facilities is which divestiture is 
required.
    Specifically, we have been contacted by producers in southeast 
Missouri who are concerned that Continental's Cottonwood Point 
facility may be sold to an entity that would also have an excessive 
influence on the local grain market. Specifically, there are rumors 
circulating that Bunge may be interested in this facility. We cannot 
stress enough the importance of preserving competition for 
agricultural products, regardless of who the principal parties are.
    We urge the Justice Department to scrutinize every offer to 
purchase facilities that are offered for sale as a result of the 
Cargill divestiture and prevent any further erosion of marketing 
options available to agricultural producers.

      Sincerely,

Charles E. Kruse,
President.

Missouri Soybean Association

P.O. Box 104778, 520 Ellis Blvd., Suite N, Jefferson City, MO 
65101; Phone: (573) 635-3819, Fax: (573) 635-5122

August 24, 1999
Mr. Roger Fones,
U.S. Department of Justice, Washington, DC 20530.

RE: Civil Action #991875 Filed 7-8-99

    Dear Mr. Fones: The Missouri Soybean Association represents 
nearly 2,000 soybean farmers across the state of Missouri. We have 
been very vocal expressing our concern about the consolidation 
within our agricultural industry. We want to thank you for keeping a 
protective eye out for too much consolidation resulting in lack of 
competition and unfair prices to our farmers.
    We understand Bunge Grain Company is interested in purchasing 
the Continental Grain Cottonwood Point elevator located in Southeast 
Missouri. We fear that purchase would eliminate competition in that 
area since this acquisition would give them a total of seven 
elevators within a fifty-mile radius.
    We would encourage you to carefully look at all the options 
available for purchasing the Cottonwood Point elevator to determine 
which of the large grain-trading firms, including Cargill, would 
offer the best long-term fair prices for Southeast Missouri grain 
producers.
    Please let me know if you have any questions on this matter. 
Thank you for your attention to this important agriculture issue.

   Sincerely,

Dale R. Lugwig, 
Executive Director/CEO.

National Catholic Rural Life Conference

4625 Beaver Avenue, Des Moines, Iowa 50310-2199; (515) 270-2634

October 8, 1999.
Judge Gladys Kessler,
U.S. District Court for the District of Columbia, 333 Constitution 
Avenue, NW, Washington, DC 20001.

Re: United States of America v. Cargill and Continental Grain

    Dear Judge Kessler: Presently before you and awaiting your 
approval is a ``Final Judgment'' filed by the U.S. Department of 
Justice regarding the purchase by Cargill Corp. of the grain 
merchandising division of Continental Grain Co.
    According to the Department of Justice, legal precedent requires 
that the ``balancing of competing social and political interests 
affected by a proposed antitrust consent decree must be left, in the 
first instance, to the discretion of the Attorney General. The 
court's role in protecting the public interest is one of insuring 
that the government has not breached its duty to the public in 
consenting to the decree. The court is required to determine not 
whether a particular decree is the one that will best serve society, 
but whether the settlement is within the reaches of the public 
interest.''
    In its July 8th ``Final Judgment'', the Department of Justice 
appears to have breached its duty to the public in consenting to the 
decree, and we believe that its ``Final Judgment'' is not ``within 
the reaches of the public interest.''
    The Department of Justice's own ``Complaint'' states the Cargill 
purchase would ``substantially lessen competition for purchases of 
corn, soybeans and wheat in each of the relevant geographic markets, 
enabling it unilaterally to depress the prices paid to farmers. The 
proposed transaction will also make it more likely that the few 
remaining grain trading companies that purchase corn, soybeans and 
wheat in these markets will engage in anticompetitive coordination 
to depress farm pieces.''
    The Department of Justice needs to take into full consideration 
the existing dominant position of Cargill in our nation's grain 
trade. The acquisition of Continental Grain's elevators (numbering 
70) will enhance the economic power of Cargill. Such a result 
concerns farmers because Cargill's assets and economic power can be 
deployed across a nearly complete range of agricultural sectors: 
Cargill has a dominant position in beef packing, cattle feedlots, 
pork packing, poultry production, animal feed plants, grain elevator 
capacity, flour milling, corn milling, soybean crushing and ethanol 
production. Such a dominant position across many agricultural 
markets allows Cargill to transfer resources between sectors 
according to the economic conditions that are prevailing at a given 
time.
    The ability to transfer assets also allows Cargill to maintain 
its dominant status in all of these markets irrespective of its 
competitive prowess. With the additional assets of Continental 
Grain, Cargill will become an even more powerful firm and ever more 
capable of strategic anti-competitive behavior.
    The National Catholic Rural Life Conference has stood with small 
farmers and rural communities since our inception in 1923. Besides 
the farm crisis of the 1980s, we have used our voice to defend the 
family farm system throughout the 20th century as corporate and 
industrial interests have eroded our nation's rural communities. 
Once again we raise our voice in solidarity with the vulnerable 
individuals and families who are often overlooked when large mergers 
or acquisitions take place in our food and agriculture system.
    In the name of economic and social justice and the preservation 
of an independent and locally-controlled family farm system of 
agriculture in the United States, we urge you to recommend that the 
Department of Justice withdraw its ``Final Judgment''. We ask that 
this ill-advised acquisition by Cargill undergo far greater study in 
respect to antitrust issues and the dire consequences to both 
producers and consumers of our food supply.

      Respectfully,

Brother David Andrews, CSC, 
Executive Director.

NFO Kansas

1783 Barn Road, Solomon, KS 67480, 785-479-2183

Roger W. Fones,
Chief, Transportation, Energy & Agriculture Section, Antitrust 
Division, United States Department of Justice, 325 Seventh Street, 
NW, Suite 500, Washington, DC 20530.

    Mr. Fones: I am writing on behalf of our many grain farmer 
members in Kansas to ask that the proposed merger between 
Continental and Cargill grain be revisited. We strongly, 
passionately feel that this violates the intentions of pro-
competitive marketplace acts such as the Clayton Act provides.
    Our organization is a bargaining group. Anytime two major buyers 
like these companies join together, it lessons the strength of farm 
bargaining.
    Please extend the comment period for another 60 days and revisit 
this issue.
    Thanks.

  Sincerely,

Ray Kohman,
Kansas NFO President.


Roger W. Fones,
Chief, Transportation, Energy & Agriculture Section, Antitrust 
Division, United States Department of Justice, 325 Seventh Street, 
NW, Suite 500, Washington, DC 20530.

    Mr. Fones: On behalf of our members in Kansas National Farmers, 
we would like at request that the merger between Cargill and 
Continental be NOT allowed. Our organization passed a resolution at 
our state annual meeting in August which opposed this ``Giant of 
Mergers.``
    We are very concerned about the lack of enforcement on anti-
trust issues today. Our very livelihoods are at stake due to 
increasing market channel monopolization. We feel that our ability 
to get competitive bids will be reduced and we feel that grain 
``basis levels'' will decline due to ``Price Leadership'' 
strategies.
    Please conduct a more thorough investigation into the Cargill/
Continental Grain sale before submitting a Final Judgment on the 
matter. Also, please extend the public comment period for another 
sixty days.


[[Page 16006]]


    Thank You!

Greg Stephens,
Kansas NFO National Director, 842 S. 10th, Salina, KS 67401.

National Farmers Union

400 Virginia Avenue, S.W., Suite 710, Washington, D.C. 20024, Phone 
(202) 554-1600

October 7, 1999.
Mr. Roger W. Fones,
Chief, Transportation, Energy & Agriculture Section, Antitrust 
Division, U.S. Department of Justice, 325 Seventh Street, N.W., 
Suite 500, Washington, D.C. 20530.

Re: United States of America v. Cargill, Inc. and Continental Grain 
Company

    Dear Mr. Fones: On behalf of the 300,000 farm and ranch families 
of the National Farmers Union, I write to express our strong 
opposition to the acquisition of Continental Grain company by 
Cargill, Inc.
    We agree with the allegation in the complaint that alleges the 
merger would substantially lessen competition for grain purchasing 
service to farmers and other suppliers in many areas in the United 
States. We also agree that the merger would increase concentration 
in the delivery point for settlement of Chicago Board of Trade 
contracts. And, we agree that the covenant not to compete is an 
unreasonable violation of trade.
    The proposed stipulation attempts to address these concerns by 
requiring a number of divestitures. Yet, even these divestitures are 
insufficient to avoid the harm that will inevitably occur to market 
competition if there is a merger between Cargill--the second largest 
grain trader in North America and the largest grain exporter, and 
Continental--until recently the third largest grain trader and the 
third largest grain exporter.
    If the two firms were less dominant, the proposed divestitures 
may have been sufficient to insure post-merger competition within 
the grain market. However, when the tops firms are allowed to merge, 
there is no way to recoup the loss to market competitiveness.
    In the countryside, Continental is known for being an aggressive 
grain buyer. Elevator operators report Continental will usually beat 
any other offer by $.02 per bushel, if given the chance. And while 
$.02 is inconsequential, it turns into millions of dollars when 
multiplied by the volume of grain that farmers and ranchers sold to 
Continental last year.
    Cargill's extensive submission of information in public 
documents reveals that Cargill is already operating in the areas 
where Continental operates. The clear reason for this merger is the 
elimination of competition. There is nothing about this merger that 
will increase competition to either farmers or ranchers or other 
members of the general public. Therefore, both the Department of 
Justice and the Court should find that the proposed stipulation that 
allows the merger is not and cannot be in the public interest.
    In addition to failing the public interest test, we believe the 
proposed enforcement mechanisms are not enforceable and are 
therefore, insufficient. The stipulation requires a number of 
divestitures in order to maintain competition. Yet, what happens if 
another buyer cannot be found. And, if a buyer is found, what buyer 
will be able to effectively compete with the newly enlarged Cargill? 
Once Continental Grain has been swallowed by Cargill, the damage is 
done. We cannot come back at a later date and have any assurance of 
being able to replace the loss of this competitor.
    The proposed stipulation also completely fails to address the 
roles Cargill and Continental play as the largest and third largest 
grain exporters. Lack of competition in the export market has a 
direct impact on U.S. grain producers for two reasons: 1) exports 
make up an important part of our market and, 2) the domestic market 
is influenced by the world price. While the complaint alleges the 
merger will lessen competition, and estimates that collectively 
Cargill and Continental control approximately 40 percent of all U.S. 
grain exports, the stipulation does nothing to address that problem.
    In addition, the only alternative to the proposed final 
judgment, discussed in the consent decree, is that of going to trial 
and obtaining a court decision similar to the proposed stipulation. 
The consent decree fails to consider the alternative of disallowing 
the acquisition.
    While we appreciate that the Justice Department required a 
number of concessions from the merging parties, the bottom line is 
that there is just no way to allow this merger without causing 
irreversible damage to market competition. Therefore, we 
respectfully request that the proposed consent decree be rejected.

      Sincerely,


Leland Swenson,
President.

Office of Hispanic Ministry, St. Joseph Catholic Church

320 Mulberry, Waterloo, IA 50703, 319-234-6744

September 30, 1999.
Judge Gladys Kessler,
U.S. District Court for the District of Columbia, 333 Constitution 
Ave. N.W., Washington, D.C. 20001.

    Dear Judge Kessler: The Department of Justice's investigation 
and subsequent formal ``Complaint'' revealed that the nation's 
largest private corporation, Cargill, is attempting to 
overwhelmingly control the U.S. grain trade. Legal documents show 
that Cargill's purchase would ``substantially lessen competition for 
purchases of corn, soybeans, and wheat in each of the relevant 
geographic markets, enabling it unilaterally to depress the prices 
paid to farmers. The proposed transaction will also make it more 
likely that the few remaining grain trading companies that purchase 
corn. soybeans and wheat in these markets will engage in anti-
competitive coordination to depress farm prices.''
    According to the Department of Justice, the court is required to 
determine, not whether this judgment to allow the Cargill/
Continental sale best serves society, but whether it falls within 
the range of acceptability or is ``within the reaches of public 
interest.''
    The Cargill purchase of Continental Grain facilities will 
increase Cargill's buying power and price control; it will decrease 
the markets available to farmers and cause farmers to have to 
transport grain farther, especially if some terminals are closed to 
increase corporate profits; it will position Cargill to dominate 
specialty or ``niche'' markets because of the acquisition of 
continental's storage facilities (markets that farmers are currently 
using to try to find profitability in already heavily Cargill-
dominated markets).
    I believe that every person has a right to the gifts of 
creations, especially to the necessities of life. Respect for the 
dignity of the human person also requires that each person has the 
right to free enterprise, the right to undertake the work that is 
their calling and the right to fair compensation for that work. This 
right is compromised when too much control is concentrated to 
increase the power and wealth of a few. Food, as well as the 
facilities for production and distribution, should not be 
concentrated to the benefit of a few.
    Therefore I urge that you not allow the sale of Continental to 
Cargill. Thank you very much.

      Sincerely,

Sister Kathleen Grace,
Pastoral Minister.

O.C.M.--Organization for Competitive Markets

301 South 13th Street, Suite 401, Lincoln, Nebraska 68508, (402) 
434-2938

October 1, 1999.
Bob McGeorge,
U.S. Department of Justice, Antitrust Division, 3257th St. NW, Room 
506, Washington, D.C. 20530.

    Dear Bob: This letter seeks confirmation that your office has 
received our objections to the Cargill-Continental consent decree. 
Please advise.
    Given the great interest in this merger, OCM has also requested 
that the Department of Justice seek an extension of the comment 
period, as allowed in the Tunney Act. Since many groups and 
individuals will need to be advised of a potential extension, OCM is 
interested in knowing whether DOJ will seek such an extension.
    Thank you for your help in this matter.

      Sincerely,

Jon K. Lauck
  

O.C.M.--Organization for Competitive Markets

301 South 13th Street, Suite 401, Lincoln, Nebraska 68508, (402) 
434-2938

September 20, 1999.
Mr. Roger W. Fones,
Chief, Transportation, Energy & Agriculture Section, Antitrust 
Division, United States

[[Page 16007]]

Department of Justice, 325 Seventh Street NW, Suite 500, Washington, 
DC 20530.

Re: United States of America v. Cargill, Inc. and Continental Grain 
Company

    Dear Mr. Fones: I am writing to you to explain OCM's opposition 
to Cargill's acquisition of Continental Grain Company, an 
acquisition which would unify the second and third largest grain 
traders in North America, which export 40 percent of American 
agricultural commodities. Specifically, OCM objects to the analysis 
used by the Department of Justice (``DOJ'') when reviewing the 
acquisition. DOB's analysis: (1) failed to consider the wider 
concentration in agricultural markets beyond grain buying; (2) 
failed to consider the continuing potential for anticompetitive 
behavior in the post-merger market; (3) failed to show that the 
divested remnants of Continental will be a competitive force absent 
a large network of elevators which buy grain; (4) DOJ failed to 
consider the impact on potential entry into grain buying markets; 
(5) failed to consider the nature of the grain selling market; (6) 
failed to consider the economic disorganization of farmers which can 
be exploited by powerful buyers; (7) failed to consider information 
disparities in agricultural markets; (8) failed to explain the 
benefits of the merger; (9) failed to consider a range of statutes 
that Congress intended courts to consider when making decisions 
about agricultural markets; (10) and failed to consider that the 
consent decree risks leaving farmers without an effective outlet for 
legal redress. By failing to consider the aforementioned factors, 
the DOJ failed to recognize how the Cargill-Continental merger posed 
``a significant threat of injury from an impending violation of the 
antitrust laws.'' \1\
---------------------------------------------------------------------------

    \1\ Zenith Radio Corp. v. Hazeltime Research Inc., 395 U.S. 100, 
130 (1969). Section 16 of the Clayton Act allows individuals to sue 
for injunctive relief ``against threatened loss or damage by a 
violation of the antitrust laws.'' 15 U.S.C. Sec. 26 (1988).
---------------------------------------------------------------------------

    (1) DOJ failed to consider the wider concentration in 
agricultural markets beyond grain buying.
    In recent years, agricultural processing markets have become 
highly concentrated. From a top-five concentration ratio of 24 
percent in the early 1980s, for example, the beef-packing sector's 
five-firm concentration ratio has grown to 85 percent. Similar 
statistics apply to several other sectors of the agricultural 
processing economy. I have enclosed a copy of a report authorized by 
Professor William Heffernan of the University of Missouri that 
explains the extent of the concentration problem.
    The DOJ's analysis did not consider the wider context of 
consolidation in the agricultural system and instead focused on the 
grain buying activities of Cargill and Continental. Growing 
concentration in agricultural markets should have been considered by 
the DOJ given the continuing consolidation of agribusiness firms. In 
United States v. Philadelphia National Bank, for example, in which 
enforcement officials stopped the merger of the second- and third-
largest banks in Philadelphia, the court noted the particular 
importance of stopping the merger given the growing concentration in 
the banking market.\2\ It was the growing power of agribusiness 
firms that triggered concerns among farmers and inspired the passage 
of the Sherman Act. And it was continuing concentration in 
agricultural markets, particularly through merger, that prompted 
passage of additional antitrust statutes such as the Clayton Act. 
The importance of the antitrust laws to farmers is explained by the 
difficulties inherent in farmers bargaining with large and powerful 
agribusiness buyers. Legislators and courts have fully recognized 
these concerns in statutes and in cases, respectively, but the DOJ's 
merger analysis failed to weigh these considerations. I have 
explained this background in a law reviews article entitled ``Toward 
an Agrarian Antitrust,'' 75 North Dakota Law Review (August/
September 1999) which I have included for your review.
---------------------------------------------------------------------------

    \2\ United States v. Philadelphia National Bank, 374 U.S. 321, 
367 (1963).
---------------------------------------------------------------------------

    The DOJ must consider more that the grain buying operations of 
Cargill. The acquisition of Continental's seventy elevators will 
enhance the economic power of Cargill as a general matter. Such a 
result concerns farmers because Cargill's assets and economic power 
can be deployed across a range of agricultural sectors. For example, 
Cargill stands out as a top-four firm in beef packing, cattle 
feedlots (where Continental is the largest and where it plans to 
invest the one-half billion dollars paid by Cargill for its elevator 
chain), port packing, broiler production, turkey production, animal 
feed plants, grain elevator capacity, flour milling, dry corn 
milling, wet corn milling, soybean crushing, and ethanol production. 
Such a dominant position across many agricultural markets will allow 
Cargill to transfer resources between sectors according to the 
economic conditions that are prevailing at a given time. This cross-
subsidization will allow Cargill to maintain its dominant status in 
all of these markets irrespective of its competitive prowess. Unlike 
farmers, who are forced into bankruptcy after a few bad seasons, 
Cargill will maintain its dominant status over time regardless of 
economic performance over the short-term. With Continental's assets, 
Cargill will become an even more powerful and ``sophisticated'' 
firm, even more capable of strategic, cooperative, and anti-
competitive behavior.\3\
---------------------------------------------------------------------------

    \3\ For judicial recognition of the power of sophisticated firms 
see Michael S. Jacobs, The New Sophistication in Antitrust, 79, 
Minn. L. Rev. 1 (1994).
---------------------------------------------------------------------------

    Allowing the merger of Cargill and Continental makes further 
agribusiness consolidation likely. Allowing such a large-scale 
merger abets the recently-announced merger of Smithfield Foods, the 
nation's largest pork packers, with Murphy Farms, the nation's 
largest pork producer. The Smithfield-Murphy Farms merger sets the 
stage for another Cargill-Continental merger, this time involving 
Cargill's large-scale pork packing operation and Continental's pork 
producing operation, further continuing the cycle of agribusiness 
consolidation.
    (2) DOJ failed to consider the continuing potential for 
anticompetitive behavior in the post-merger market:
    The DOJ argues in its complaint that within particular draw 
areas very few firms buy grain. It argues that if Continental's 
operations were absorbed ``Cargill would be in a position 
unilaterally, or in coordinated interaction with the few remaining 
competitors, to depress prices paid to producers and other suppliers 
because transportation costs would preclude them from selling to 
purchasers outside the captive draw areas in sufficient quantities 
to prevent the price decrease.'' \4\ Divestitures in a few of these 
markets as proposed by the DOJ does not address this problem. Even 
with the divestitures, grain buying would remain heavily 
concentrated and susceptible to collusive and cooperative activity.
---------------------------------------------------------------------------

    \4\ Complaint, U.S. v. Cargill, Inc. and Continental Grain 
Company, July 8, 1999, at 4 (italic added).
---------------------------------------------------------------------------

    (3) DOJ failed to show that the divested remnants of Continental 
will be a competitive force absent a large network of elevators 
which buy grain:
    Furthermore, it is unclear how the divested components of 
Continental will remain an effective competitor with Cargill absent 
the former entity's large-scale elevator capacity. The few 
facilities that will not be acquired by Cargill hardly constitute a 
legitimate competitive threat. As the DOJ emphasized in its 
complaint, grain buying involves a large-scale network of 
facilities.\5\ The few remaining Continental facilities, stripped of 
their internal networks which provide them with competitive 
flexibility and information about grain flows, will be powerless in 
comparison with Cargill, with its $51 billion in annual revenues and 
81,000 employees in 60 different countries. Continental's decision 
to sell off its grain buying operation may also indicate that it no 
longer considers grain buying a priority. In short, there is no 
assurance that the remaining facilities will even compete in the 
markets that concerned the DOJ. Given the need for a network of 
elevators to compete in the grain buying business, it is also highly 
unlikely that any new firms will enter the market to challenge 
Cargill. The DOJ openly concedes in its complaint that it is 
``unlikely that Cargill's exercise of market power will be prevented 
by new entry, by farmers and other suppliers transporting their 
products to more distant markets, or by any other countervailing 
competitive force.'' \6\
---------------------------------------------------------------------------

    \5\ Id. at 3 (noting that ``Grain traders such as Cargill and 
Continental operate extensive grain distribution networks, which 
facilitate the movement of grain from farms to domestic consumers of 
these commodities and to foreign markets'').
    \6\ Id. at 6.
---------------------------------------------------------------------------

    (4) DOJ failed to consider the impact on potential entry into 
grain buying markets:
    Stripping Continental Grain of its internal network of elevators 
poses additional threats to competition. Given the difficulty of 
entry into the grain buying business, as conceded by DOJ, it is 
additionally important to hold together a firm that could 
potentially challenge Cargill in the many markets in which it holds 
a dominant position. As the Supreme Court has noted, ``[t]he 
existence of an aggressive, well equipped and well financed 
corporation engaged in the same or

[[Page 16008]]

related lines of commerce waiting anxiously to enter an 
oligopolistic market would be a substantial incentive to competition 
which cannot be underestimated.'' \7\ Important factors in 
determining whether a firm may enter the concentrated grain buying 
market include its ``resourcefulness'' and the ``nearness of the 
absorbed company'' to the market, characteristics that could be 
attributed to a large-scale firm such as Continental Grain.\8\ 
Without the existence of Continental's grain buying operations, 
Cargill will face considerably less pressure to pay farmers a 
competitive price for their product.
---------------------------------------------------------------------------

    \7\ U.S. v. Penn-Olin Chemical Co., 378 U.S. 158, 173-4 (1964).
    \8\ U.S. v. El Paso Natural Gas Co., 376 U.S. 651, 660 (1964). 
See generally U.S. v. Falstaff Brewing Corp., 410 U.S. 526 (1973) 
(preventing Falstaff's acquisition of a New England brewery because 
it would eliminate Falstaff's de novo entry into the New England 
market); Mark D. Whitener, Potential Competition Theory--Forgotten 
But Not Gone, 5 Antitrust 17 (1991).
---------------------------------------------------------------------------

    (5) DOJ failed to consider the nature of grain selling markets:
    The DOJ also fails to assess the nature of grain selling 
markets. Much of the grain bought by Cargill and Continental is sold 
on world markets. But this selling is sometimes based on geographic 
area, historic preference, or long-term contracting. Without a 
guaranty of vigorous competition among grain traders for overseas 
customers, it is not necessary to compete vigorously for the 
purchase of the grain of American farmers and therefore there is no 
incentive to bid up the prices paid to farmers. If Cargill has a 
long-term arrangement with an overseas grain buyer, for example, 
Cargill will buy grain from American farmers when it needs to 
fulfill its obligation. In this process, no competitive bidding with 
another grain buying firm will be necessary. Without an assessment 
of the workings of world grain selling practices, DOJ's assumption 
that competitive bidding will maintain a competitive price for 
American farm products is unfounded.\9\ And even if evidence of 
competition for export markets can be found, that does not 
necessarily mean that there is competition for the grain sold by 
American farmers. Firms can choose to collude in upstream markets 
and compete in downstream markets.
---------------------------------------------------------------------------

    \9\ For examples of grain company manipulations of world 
markets, see DAN MORGAN, THE MERCHANTS OF GRAIN (1979).
---------------------------------------------------------------------------

    (6) DOJ failed to consider the economic disorganization of 
farmers which can be exploited by powerful buyers:
    The DOJ also fails to consider the economic organization of 
farmers who sell to the large grain buyers. Courts have often noted 
that a key consideration when determining the potential for 
horizontal collusion is the relative organization of firms in the 
adjacent sectors. Judicial recognition has come in the form of a 
defense to challenged mergers.\10\ Courts have entertained the 
argument that a larger, more powerful firm resulting from a merger 
may be acceptable if the firms it sells to also possess market 
power.\11\ In U.S. v. Country Lake Foods, Inc., a case involving the 
merger of two firms in the fluid milk processing industry, a court 
recognized the ability of large food corporations who bought milk to 
check the power of milk processors.\12\ The court noted the 
``extremely concentrated'' nature of the food processing industry in 
the relevant market, where the top-three concentration ratio was 
over 90 percent.\13\ The size of the food firms and the volume of 
their purchases allowed them to monitor milk prices, making them 
``very sophisticated buyers.'' \14\ The court noted their ability to 
switch to other milk processors and to enter the processing market 
themselves.\15\ The market entry of the large food processors would 
be aided by their capital resources, which would allow them to 
purchase an existing plant, and by their existing customer base.\16\ 
The court found the power-buyer defense the ``most persuasive 
argument'' advanced by the defendants.\17\
---------------------------------------------------------------------------

    \10\ Mary Lou Steptoe, The New Merger Guidelines: Have They 
Changed the Rules of the Game? 61 Antitrust L.J. 493, 493-4 (1993) 
(explaining that ``[a]lthough the power-buyer defense may appear to 
be a judicial creation that has only emerged within the last two 
years, it actually reflects an underlying trend in merger law, 
present since General Dynamics [1974], toward a more searching 
examination of the economic conditions that affect a seller's 
ability to exercise market power'').
    \11\ U.S. v. Baker Hughes, Inc., 908 F.2d 981, 984 (D.C. Cir. 
1990) (now-Justice Thomas endorsing the consideration of a ``variety 
of factors'' in merger cases, including buyer power, and rejecting 
the ``fixation'' on singular factors such as market entry); F.T.C. 
v. Elders Grain, Inc., 868 F.2d 901, 905 (7th Cir. 1989) (Judge 
Posner recognizing that the industrial dry corn industry was 
unlikely to be cartelized given the nature of their buyers, ``a 
handful of large and sophisticated manufacturers of food 
products'').
    \12\ 754 F. Supp. 669 (D. Minn. 1990).
    \13\ Id., at 674.
    \14\ Id.
    \15\ Id.
    \16\ Id., at 680.
    \17\ Id., at 679.
---------------------------------------------------------------------------

    Commentators have elaborated on the potential power of certain 
buyers. For example, buyers are particularly adept at checking the 
power of concentrated sellers when the price of the item in question 
is widely known.\18\ In Country Lake Foods, the milk buyers could 
estimate the cost of processed milk based on the price paid for raw 
milk (since prices are publicly reported) and switch to a different 
seller if prices were deemed to be oligopolistically-priced.\19\ In 
addition to switching to a new seller, buyers could induce the 
market entry of additional sellers by extending long-term contracts 
or providing the financing for the start-up of new sellers.\20\ 
Large buyers could support the merger of two smaller sellers who, 
when their assets are combined, could more effectively compete 
against larger sellers in the market.\21\ Large buyers could also 
enter or threaten to enter the upstream market themselves.\22\
---------------------------------------------------------------------------

    \18\ Steptoe, at 496.
    \19\ Steptoe, at 496.
    \20\ Steptoe, at 501.
    \21\ Safeway and Kroger, major buyers of ready-to-eat cereals, 
supported the merger of Kraft, which owns Post, and the cereal 
division of Nabisco because ``it makes Post a stronger competitor to 
Kellogg and General Mills,'' which sell 60 percent of ready-to-eat 
cereals. State v. Kraft General Foods, 926 F. Supp. 321, 325, 351 
(S.D.N.Y. 1995).
    \22\ Steptoe, at 499-500.
---------------------------------------------------------------------------

    Implicit in the recognition of the power-buyer defense is the 
assumption that powerful firms in a market can exploit small and 
disorganized firms in a vertically adjacent market. In other words, 
the power-buyer argument provides a rationale for halting the growth 
of powerful agribusiness processors at the expense of the thousands 
of farmers who sell to them. In U.S. v. United Tote, Inc., the court 
rejected the power-buyer defense because it recognized the relative 
disorganization of the buyers of the totalisator.\23\ Because so 
many buyers were present in the market and the buyers possessed 
different levels of sophistication, they could not constitute a 
legitimate check on the power of the sellers.\24\ In the recent case 
FTC v. Cardinal Health, Inc., the DC Court of Appeals considered the 
potential power of firms who bought drugs from the four largest 
wholesale distributors of drugs in the nation.\25\ While the court 
noted the power of certain buyers in the market, it also considered 
the numerous independent pharmacies that lacked the power to 
effectively bargain with the large wholesalers.\26\ The existence of 
a large number of buyers and the presence of many small independents 
created a ``fragmented'' buying sector unable to counter the power 
of the wholesalers.\27\ The buyer-power defense creates a rational 
for scrutinizing the power of buyers relative to sellers. Thousands 
of farmers, for example, are hard-pressed to muster the market power 
necessary to check the powerful food companies who buy their 
products. Farmer marketing is characteristically disorganized and 
``fragmented,'' similar to the descriptions of the totalisator and 
wholesale drug buyers described in United Tote and Cardinal Health.
---------------------------------------------------------------------------

    \23\ 768 F. Supp. 1064 (D. Del. 1991). The totalisator system 
manages betting at horse tracks. Id., at 1065.
    \24\ Tote, at 1085 (explaining that ``the totalisator market 
does not consist of a few, very large consumers. In stark contrast, 
the totalisator market consists of over two hundred fifty-five pari-
mutuel [the most common form of wagering on horses] facilities, only 
thirty-nine of which have average daily handles in excess of 1 
million dollars. Even if the Court were to accept United Tote's 
argument that the owners of these large, sophisticated facilities 
would be able to protect themselves from any anti-competitive price 
increase, this would still leave at least one hundred nine 
facilities unprotected in the small market segment along'').
    \25\ 12 F. Supp. 2d 34 (D.C. Cir. 1998).
    \26\ Cardinal Health, at 60 (noting that ``[i]ncreasingly, the 
27,000 independent pharmacies in the United States today are joining 
buying cooperatives which, in turn, are consolidating to try to 
develop greater buyer power,'' but concluding that ``independent 
pharmacies have little leverage, as evidenced by the considerably 
higher upcharges they have to pay in comparison to the retail chains 
and institutional GPOs'').
    \27\ Cardinal Health, at 61 (holding that the ``existence of the 
independent pharmacies and the smaller hospitals makes the wholesale 
market considerably fragmented and remarkably similar to the market 
described in United Tote'').
---------------------------------------------------------------------------

    An example of buyer power in agricultural markets was recently 
exposed in South Dakota. During the summer of 1999, a federal court 
in South Dakota ruled on the constitutionality of a South Dakota 
livestock

[[Page 16009]]

price reporting law, passed during the 1999 legislative session in 
response to concerns about price manipulations by large packers.\28\ 
While not an antitrust ruling, the court did note the large amount 
of buying power possessed by packers. The court explained the 
absence of bargaining power on the part of farmers, who ``are unable 
to set their prices but must rely on what buyers will pay,'' and 
concluded that ``[p]ackers have the market power in each livestock 
market to influence or determine prices paid to producers of 
livestock.'' \29\ In the context of South Dakota farmers, the court 
noted the existence of an ``oligopsony'' among the state's three 
packers.\30\
---------------------------------------------------------------------------

    \28\ American Meat Institute and John Morrell & Company v. Mark 
W. Barnett, Findings of Fact and Conclusions of Law, Civ 99-3017, 
U.S. Dis. Court, South Dakota, Filed July 26, 1999 (upholding the 
statute's price reporting provision; holding the statute's 
prohibition on discriminatory pricing to be a violation of the 
commerce clause).
    \29\ Id. at 5.
    \30\ Id.
---------------------------------------------------------------------------

    (7) DOJ failed to consider information disparities in 
agricultural markets:
    The DOJ also failed to consider informational disparities 
between farmers and large grain buyers. In Eastman Kodak Co. v. 
Image Technical Services the Supreme Court expanded the notion of 
market power, an element critical to most antitrust violations, to 
include information.\31\ The Kodak decision recognizes a fundamental 
economic point raised in the economics literature in the 1960s, when 
information studies became prominent.\32\ As George Stigler pointed 
out, market sellers do not simply accept the offer of the highest 
bidder.\33\ Finding, or ``searching'' for, the highest bidder is a 
costly process, involving significant transaction costs.\34\ Time is 
perhaps the largest expense,\35\ especially for sellers of 
perishable agricultural products. When the prices paid for a 
commodity vary widely, indicating that some sellers did not find the 
highest bidders in the market, information problems are in 
evidence.\36\ That some sellers did not search for higher prices may 
mean that they concluded the cost of the search would outstrip any 
potential returns from higher prices.\37\ One method of reducing the 
problem of poor information and the resulting ``price dispersion'' 
is the centralization of knowledge in one identifiable location,\38\ 
a solution similar to the recent calls for the mandatory reporting 
of prices paid by meatpackers.\39\
---------------------------------------------------------------------------

    \31\ 504 U.S. 451 (1992); Mark R. Patterson, Product Definition, 
Product Information, and Market Power: Kodak in Perspective, 73 
N.C.L. Rev. 185, 187 (1994) (arguing that Kodak ``incorporated into 
antitrust law a body of economic teachings on product information 
that the Court had previously neglected'').
    \32\ GEORGE STIGLER, THE ORGANIZATION OF INDUSTRY 171 (1968).
    \33\ Id. at 171.
    \34\ Id.
    \35\ Id. at 175.
    \36\ Id. at 172.
    \37\ Id. at 175.
    \38\ Id. at 172, 176.
    \39\ S. 19, 106th Cong., 1st Sess., Sec. 6 (requiring 
meatpackers to report prices paid for livestock); Steve Marbery, 
Debate Over Price Discovery Enters Critical Round, Feedstuffs, June 
1, 1998.
---------------------------------------------------------------------------

    Agricultural markets are defined by stark information 
disparities. One study of Iowa hog farmers, for example, indicates 
that price searching is very limited \40\ and that 85 percent of a 
farmer's hogs are sold to the same packer, indicating a very limited 
amount of price searching.\41\ Such a result is similar to DOJ 
findings about the grain selling pattern of farmers, who ``generally 
sell their grain within a limited geographic area surrounding their 
farms.'' \42\ Commentators have noted how ``firms can exploit in 
numerous ways the bargaining power that the lack of comparison 
shoppers confers on them.'' \43\ The case for heightened scrutiny 
for bargaining arrangements involving farmers is provided for the 
Kodak analysis. as one commentator explained, ``Kodak suggests that 
market power may be found wherever ignorant buyers can be exploited 
through individualized bargaining,'' a conclusion which could also 
apply to disorganized sellers.\44\ The power of possessing 
information in grain trading was recently conceded by Cargill's head 
of public affairs, ironically enough, when launching a new public 
relations campaign: ``' If you look at our oldest business, which is 
grain trading, whoever has been in that business has been reticent 
to talk about the details' because a close hold on trading 
information could be critical to profits.'' \45\ The importance of 
information was also noted in the recent price reporting decision in 
South Dakota, in which a federal court acknowledged that ``only 
packers have complete knowledge of livestock purchases and prices'' 
and that ``[o]nly a relatively small portion of livestock purchasing 
and pricing information is available to the public, including 
producers.'' \46\
---------------------------------------------------------------------------

    \40\ Market Access, 1995 Survey Results (Iowa Pork Producers 
Association, In Cooperation with Iowa State University), at 3 
(``Eighty-seven percent of the producers reported pricing their hogs 
the day of, or the day before, delivery'').
    \41\ Id., at 4; Merle D. Faminow, Monica de Matos, R.J. 
Richmond, Errors in Slaughter Steer and Heifer Prices, 12 
Agribusiness, 79, 79 (1996) (noting that the ``exploitation of 
informational asymmetries can be one form of market power whereby 
agricultural processing industries can exploit farmers who sell to 
them'').
    \42\ Complaint, at 4.
    \43\ Alan Schwartz and Louis L. Wilde, Intervening in Markets on 
the Basis of Imperfect Information: A Legal and Economic Analysis, 
127 Cornell L. Rev. 630, 667 (1979).
    \44\ Thomas C. Arthur, The Costly Quest for Perfect Competition: 
Kodak and Nonstructural Market Power, 69 N.Y.U.L. Rev. 1, 15 (1994).
    \45\ Jill J. Barshay, Cargill Steps Into the Light With Image 
Campaign, Star Tribune (Minneapolis, Minn.), March 5, 1999.
    \46\ AMI v. Barnett, at 5-6.
---------------------------------------------------------------------------

    (8) DOJ failed to explain the benefits of the merger:
    Given the DOJ's concerns about the anticompetitive consequences 
of the merger, it is odd that no effort is made to justify its 
approval of the merger. The fears of anticompetitive behavior set 
forth in the complaint are not counter-balanced with a recognition 
of post-merger efficiencies, for example. With no apparent benefit 
to the merger and significant concerns expressed by many parties 
about its approval, the natural reaction would be to halt he merger. 
This response is further justified by the obvious difficulties that 
accompany the reversal of market concentration once it has become an 
economic fact.
    (9) DOJ failed to consider a range of statutes that Congress 
intended courts to consider when making decisions about agricultural 
markets:
    Perhaps the most glaring defect in the DOJ's analysis is its 
failure to consider all of the relevant statutes. Robert Pitofsky, 
Chairman of the Federal Trade Commission, has explained the 
importance of construing the antitrust laws comprehensively.\47\ 
Pitofsky invokes the Supreme Court case United States v. 
Hutcheson,\48\ which specifically interpreted the Sherman, Clayton, 
and Norris-LaGuardia Acts as ``interlacing statutes.'' \49\ The 
existence of agricultural statutes in pari materia, which ``relate 
to the same thing'' as the antitrust statutes, requires that both be 
considered as ``one law'' in judicial decision-making.\50\ Failing 
to consider agricultural statutes eliminates critical factors to be 
considered in antitrust decisions and undermines the designs of 
legislator. \51\ As a broad principle, weighing an array of factors, 
including closely related statutes, is recognized as an important 
component of balanced legislative interpretation.\52\ If courts 
consider the wider statutory regime and the particular problem it 
addressed, judicial decisions can more properly reflect past 
Congressional concerns about economic concentration and its negative 
impact on the bargaining power of farmers.\53\
---------------------------------------------------------------------------

    \47\ Robert Pitofsky, The Political Content of Antitrust, 127 U. 
Pa. L. Rev. 1051, n.31 (1979).
    \48\ 312 U.S. 219 (1941).
    \49\ Id., at 232; See also, Fairdale Farms, Inc. v. Yankee Milk, 
Inc., 635 F.2d 1037, 1042-32 (2nd Cir. 1980) (construing the Capper-
Volstead Act in light of subsequent agricultural statutes).
    \50\ U.S. v. Freeman, 44 U.S. 556, 564 (1845) (``The correct 
rule of interpretation is, that if divers statutes relate to the 
same thing, they ought all to be taken into consideration in 
construing any one of them, and it is an established rule of law, 
that all acts in pari materia are to be taken together, as if they 
were one law''); 73 Am. Jur. 2d Statutes Sec. 187 (1974) (Current 
Through April 1998 Cumulative Supplement) (explaining that ``acts in 
pari materia, and all parts thereof, should be construed together 
and compared with each other. Because the object of the rule is to 
ascertain and carry into effect the legislative intent, it proceeds 
upon the supposition that the several statutes were governed by one 
spirit and policy, and were intended to be consistent and harmonious 
in their several parts and provisions. Under this rule, each statute 
or section is construed in the light of, with reference to, or in 
connection with, other statutes or sections'').
    \51\ U.S. v. Ferman, at 564 (explaining that ``[t]he error'' in 
the interpretation of a statute ``arose from that act having been 
considered by itself, without any reference to other statutes 
relating to [similar concerns]'').
    \52\ William N. Eskridge, Jr. and Philip P. Frickey, Statutory 
Interpretation as Practical Reasoning, 42 Stanford L. Rev. 321, 356 
(1990).
    \53\ Id., at 358 (also noting the importance of the purposive 
inquiry; ``What problem was trying to solve, and what general goals 
did it set forth in trying to solve it?'').
---------------------------------------------------------------------------

    The DOJ, for example, failed to consider the Packers and 
Stockyards Act (``P&SA'') of

[[Page 16010]]

1921.\54\ The purposes and provisions of the statute require 
consideration when enforcing the Sherman, Clayton, and Federal Trade 
Commission Acts. P&SA passed after these broader statutes became law 
and was specifically directed toward a problem that seemed to 
persist despite the existence of previous legislation. The 
Congressional intent to promote the combined consideration and 
construction of the antitrust statutes is evidenced by the shared 
enforcement provisions of the P&SA.\55\
---------------------------------------------------------------------------

    \54\ 7 U.S.C. Sec. 181 et seq.
    \55\ The PS&A even allowed for divided enforcement between the 
Secretary of Agriculture and the FTC. The FTC was to enforce the 
``retail sales'' provision of the statute but the Secretary could 
assume responsibility if the FTC was not already proceeding with a 
similar investigation. Sec. 406(d). Per se illegality standards in 
the Clayton and FTC Acts carry over to P&SA. Re ITT Continental 
Baking Co. (1985) 44 Ag Dec 748.
---------------------------------------------------------------------------

    Some courts have specifically held that the statute is designed 
to go beyond the broad language of the Sherman, Clayton, and Federal 
Trade Commission Acts, thereby recognizing the importance of 
construing the statutes together.\56\ While refusing to purchase a 
farmer's livestock might be acceptable under the Sherman or Federal 
Trade Commission Acts, for example, it would not be acceptable under 
the broad protective purposes of the P&SA.\57\ In making such 
decisions, courts have recognized the problem of buyer power that 
farmers face \58\ and which Congress attempted to address in the 
P&SA.\59\ Furthermore, given the remedial nature of the statute, it 
should be interpreted liberally to carry out its broad mandate and 
purposes.\60\ When combined with the already broad language of the 
statute, enforcement agencies are given wide regulatory powers over 
the meatpacking industry,\61\ especially as it relates to injuries 
inflicted upon farmers.\62\ One contemporary commentator described 
the legislation as ``extending farther than any previous law in the 
regulation of private business.'' \63\ Borrowing heavily from the 
language of other antitrust laws, again confirming the 
interconnectedness of the antitrust legal regime, the legislation 
prohibits ``any unfair'' \64\ practices or ``any undue or 
unreasonable preference or advantage'' to certain sellers. \65\ The 
language of the PP&SA makes clear that particularly close scrutiny 
should be given to the marketing problems of farmers.
---------------------------------------------------------------------------

    \56\ Wilson & Co. v. Benson, 286 F.2d 891 (7th Cir. 1961).
    \57\ Swift & Co. v. U.S., 393 F.2d 247, 255 (7th Cir. 1968).
    \58\ Id., at 250-52 (finding that buyers of lambs agreed not to 
pay over a certain price and that buyers agreed not to bid against 
one another for lambs; the firm which bought the lambs then sold 
them to another buyer which had agreed not to bid on the lambs).
    \59\ Id., at 254 (``The lack competition between buyers, with 
the attendant possible depression of producers' prices, was one of 
the evils at which the Packers and Stockyards Act was directed'') 
(citing Meat Packer Legislation hearings before the House Committee 
on Agriculture, 66th Cong., 2d Sess., pp. 22, 229, 250, 303, 1047, 
2284 (1920)).
    \60\ Bruhn's Freezer Meats of Chicago, Inc. v. U.S. Department 
of Agriculture, 438 F.2d 1332, 1336 (8th Cir. 1971) (citations 
omitted); Glover Livestock Commission Company, Inc. v. Hardin, 454 
F.2d 109, 111 (8th Cir. 1972) (describing the legislation as 
remedial and requiring liberal construction to carry out its purpose 
of (``prevent[ing] economic harm to producers and consumers at the 
expense of middlemen'') (citing Bruhn's).
    \61\ Id., at 1339 (``The Act was framed in language designed to 
permit the fullest controls of packers and stockyards which the 
Constitution permits, and its coverage was to encompass the complete 
chain of commerce and give the Secretary of Agriculture complete 
regulatory power over packers and all activities connected 
therewith'').
    \62\ Stafford v. Wallace, 258 U.S. 495, 514-15 (1922) (holding 
that the ``chief evil feared is the monopoly of the packers, 
enabling them unduly and arbitrarily to lower prices to the shipper 
who sells'').
    \63\ Current Legislation, The Packing Industry and the Packing 
Act, 22 Colum L. Rev. 68, 70 (1922) (quoting Senate Agricultural 
Comm., Rep. No. 77, 67th Cong., 1st Sess. 2 (1921)).
    \64\ 7 U.S.C. Sec. 202(a) (italics added).
    \65\ Id. at Sec. 202(b) (italics added).
---------------------------------------------------------------------------

    The DOJ also failed to consider the Capper-Volstead Act.\66\ 
Among farmers in the late 19th century, a favored method of 
responding to the economic concentration of buyers was the marketing 
cooperative. Formal government efforts to aid farmer cooperatives 
came with the passage of the Clayton Act in 1914.\67\ In order to 
eliminate legal obstacles that might slow the growth of market power 
among farmers through cooperatives, the legislation specifically 
exempted non-stock agricultural cooperatives from the antitrust 
laws.\68\ The inclusion of the farmer cooperative provision within 
an antitrust statute offers further evidence of the importance 
Congress placed on considering the economic disorganization of 
farmers when applying the antitrust laws. Doubts about the 
effectiveness of the Clayton Act exemption triggered legislative 
efforts to draft a stronger statute.\69\ The result was the Capper-
Volstead Act of 1922, which broadened the exemption from the 
antitrust laws beyond non-stock cooperatives.\70\
---------------------------------------------------------------------------

    \66\ 7 U.S.C. Secs. 291-2.
    \67\ 15 U.S.C. Secs. 12-27 (1983).
    \68\ Id., at Sec. 17.
    \69\ Wendy Moser, Selective Issues Facing Cooperatives: Can the 
Customer continue to be the Company? 31 S.D.L.Rev. 394, 395 
(explaining that Capper-Volstead was passed to ``clarify the Clayton 
Act exemption provided to farmers'').
    \70\ 7 U.S.C. Secs. 291-92.
---------------------------------------------------------------------------

    With the passage of Capper-Volstead, Congress demonstrated its 
intention to treat farmer cooperatives differently from the typical 
corporate form and to give farmers the opportunity to build their 
bargaining power relative to corporate buyers.\71\ By exempting 
farmer cooperatives from the antitrust laws Congress sought to help 
``farmers to compete with large corporations.'' \72\ According to 
some commentators, the legislation was specifically designed to 
``counterveil the monopsony power then held by the corporate 
purchasers.'' \73\ The Supreme Court agreed that ``individual 
farmers should be given, through agricultural cooperatives acting as 
entities, the same unified competitive advantage--and 
responsibility--available to businessmen acting through corporations 
as entities.'' \74\ Without fear of antitrust prosecution, farmers 
were to unify into farmer cooperatives that could employ their 
bargaining power to negotiate with large food manufacturers for 
better prices for their products.\75\
---------------------------------------------------------------------------

    \71\ Fairdale Farms, 635 F.2d at 1043 (noting that 
``agricultural cooperatives were `a favorite child of Congressional 
policy' '') (quoting treatise); David Million, The Sherman Act and 
the Balance of Power, 61 S. Cal. L. Rev. 1219, 1281 (1988) (``The 
exemption of labor and agricultural combinations from the Sherman 
Act's proscriptions further demonstrates that a deep concern about 
social balance lay beneath statements of solicitude for those harmed 
by the trusts. Several senators advocated exemption on the ground 
that such combinations were necessary to counterbalance the economic 
power of massed capital.''); Michael D. Love, Antitrust Law--
Fairdale Farms, Inc. v. Yankee Milk, Inc.:--The Right of 
Agricultural Cooperatives to Possess Monopoly Power, 7 J.Corp.L. 
339, 341 (1982) (explaining Congressional hopes of helping 
``cooperatives to finance business operations of sufficient 
magnitude to compete with corporations''); Kathryn J. Sedo, The 
Application of the Securities Law to Cooperatives: A Call for Equal 
Treatment for Non-agricultural Cooperatives, 46 Drake L. Rev. 259, 
272 (1997) (noting the farmer cooperative exemption from the 
securities laws, indicating the Congressional view that cooperatives 
were favored organizations).
    \72\ Sunkist Growers, Inc. v. Winckler & Smith Citrus Products 
Co., 284 F.2d 1, 8 (9th Cir. 1960).
    \73\ David L. Baumer, Robert T. Masson, and Robin Abrahamson 
Masson, Curdling the Competition: An Economic and Legal Analysis of 
the Antitrust Exemptions for Agriculture, 31 Vill. L. Rev., 183, 185 
(1986) (``Congressional passage of the agricultural antitrust 
exemption encouraged the formation of agricultural cooperatives 
intended to counterveil the monopsony power then held by the 
corporate purchasers'').
    \74\ Maryland & Va. Milk Producers Ass'n v. United States, 362 
U.S. 458, 466 (1960).
    \75\ Note, Trust Busting Down on the Farm: Narrowing the Scope 
of Antitrust Exemptions for Agricultural Cooperatives, 61 VA L. Rev. 
341, 364 (1975) (``Capper-Volstead's authorization of collective 
processing and marketing was an attempt to counter the bargaining 
power of oligopsonist buyers, but the bargaining power gap is as 
wide today as it was fifty years ago'').
---------------------------------------------------------------------------

    The jurisprudence interpreting the Capper-Volstead Act 
recognizes farmer disorganization and the power of large-scale 
buyers. The court in Kinnet Dairies, Inc. v. Dairymen, Inc., for 
example, noted that ``farmers needed congressional help'' since they 
``had always been pricetakers, standing relatively helpless before 
those who would purchase their products.'' \76\ In order to overcome 
the monopoly problem common to agricultural markets, Congress 
``deliberately set about to enable farmers to organize and band 
together in order to acquire and exercise marketing power.'' \77\ If 
farmers can muster enough bargaining power a ``bilateral monopoly'' 
between seller and buyer will result, conferring on farmers a fair 
price for their products.\78\ The mirror image of

[[Page 16011]]

promoting farmer bargaining power is close attention to economic 
activities that might increase the concentration among buyers and 
contribute to their collusive potential. Accordingly, the wider 
policy rationale of Capper-Volstead requires that DOJ and other 
enforcement officials apply strict scrutiny to mergers or other 
activities that enhances the power of buyers and worsens the 
bargaining position of farmers.
    Finally, the DOJ failed to consider Congressional concerns about 
maintaining a balanced bargaining arrangement between farmers and 
processors as manifest in the Agricultural Fair Practices Act (AFPA) 
of 1967.\79\ The statute was designed to prevent corporations from 
interfering in the formation of collective marketing organizations 
among farmers.\80\ Congressional action stemmed from episodes in 
which food processing corporations discriminated against cooperative 
bargaining associations by refusing to buy their products.\81\ 
Courts have interpreted the ``overriding purpose'' of the resulting 
legislation to be the protection of farmers' rights to cooperatively 
organize.\82\ Throughout the 1970s, Congress considered additional 
legislation to improve the bargaining power of farmers relative to 
that of the corporate food processing sector.\83\ The AFPA's 
recognition of the disorganized nature of farmer marketing \84\ and 
the potential for abusive practices on the part of agricultural 
processors adds further evidence of heightened Congressional concern 
with market power among buyers.
---------------------------------------------------------------------------

    \76\ 512 F.Supp. 608, 630 (M.D. GA. 1981); Northern Cal. 
Supermarkets, Inc. v. Central Cal. Lettuce Producers Cooperative., 
413 F.Supp. 984, 988 (N.D. Cal. 1976) (noting that ``Congress 
perceived farmers as being at the mercy of sharp dealers in the sale 
of their produce and, therefore, made it possible for them to form 
cooperatives to help themselves'').
    \77\ Kinnet Dairies, 512 F.Supp. at 630. The court specifically 
mentions the promotion of ``countervailing power'' as a function of 
farmer cooperatives. Id., at 614.
    \78\ National Broiler Marketing Assn. v. U.S., 436 U.S. 816, 842 
(1978) (J. White dissenting) (``The specific goal of permitting 
agricultural organizations was to combat, and even to supplant, 
purchasers' organizations facing the farmer. Economics teach that 
the result in such circumstances is `bilateral monopoly' with a 
potentially beneficial impact on the eventual consumer and a sharing 
of cartel profits between the organized suppliers and the organized 
buyers''). The court also specifically mentions that chicken farmers 
exist in an ``oligopsonistic'' market. Id., at 844 (quoting Brown, 
U.S. v. Broiler Marketing Association: Will the Chicken Lickin' 
Stand?, 56 N.C.L.Rev. 29, 44 (1978)).
    \79\ 7 U.S.C. Secs. 2301-2306; Donald A. Frederick, Agricultural 
Bargaining Law: Policy in Flux, 43 Ark. L. Rev. 679, 689 (noting 
that the legislation was ``viewed as an important sanction of 
agricultural bargaining'' and was a ``congressional reaffirmation of 
the value of cooperative bargaining and marketing by agricultural 
producers'').
    \80\ 7 U.S.C. Sec. 2303 (forbidding corporations from coercing, 
discriminating, or intimidating members of farmer bargaining 
groups).
    \81\ Randall Torgerson, PRODUCER POWER AT THE BARGAINING TABLE: 
A CASE STUDY OF THE LEGISLATIVE LIFE OF S. 109 3-17 (1970).
    \82\ Butz v. Lawson Milk Co., Division of Consolidated Foods 
Corp., 386 F.Supp. 227, 235 (N.D. OH. 1974) (``the overriding 
purpose of Congress in enacting the Agricultural and Fair Practices 
Act of 1967 was to protect the individual producer of milk in his 
right to band together with other producers or, in effect, to 
unionize'').
    \83\ National Broiler Marketing Assn., 436 U.S. at 837 (1978) 
(Brennan, J., concurring) (noting the ``persuasive evidence that 
Congress' concern for protecting contract growers vis-a-vis 
processors and handlers has not abated''); Oliver and Snyder, 
Antitrust, Bargaining, and Cooperative: ABC's of the National 
Agricultural Marketing and Bargaining Act of 1971, 9 Harvard J. 
Legislation 498 (1972); Frederick supra, Agricultural Bargaining 
Law, at 691-693.
    \84\ 7 U.S.C. Sec. 2301.
---------------------------------------------------------------------------

    (10) DOJ failed to consider that the consent decree risks 
leaving farmers without an effective outlet for legal redress:
    The resulting consent decree will be reviewed by a district 
court in the District of Columbia (``D.C.''), where it is less 
likely that a federal judge will be familiar with agricultural 
concerns. When seeking leverage in the negotiations over the consent 
decree, the DOJ had a plane waiting to take a lawyer to Fargo to 
file suit, indicating their understanding that a farm-state venue 
would be more advantageous in litigation than Washington, D.C. The 
D.C. Court of Appeals has also severely restricted the ability of 
district courts to determine whether a consent decree is ``in the 
public interest,'' making it more likely that the concerns of 
interested parties will not be fully considered in a court of 
law.\85\ One commentator has noted that the DC Court of Appeals 
ruling ``threatens to eliminate any effective role for the courts in 
reviewing antitrust consent decrees.'' \86\ The DC Court of Appeals 
conclusion that a consent decree can be rejected only if it makes a 
``mockery'' of judicial power is ``almost no standard at all and 
places in jeopardy the Tunney Act [Antitrust Procedures and 
Penalties Act] requirement that the district court independently 
review the decree to ensure that it is in the public interest.'' 
\87\
---------------------------------------------------------------------------

    \85\ United States v. Microsoft Corp., 56 F.3d 1448 (D.C. Cir. 
1995).
    \86\ Lloyd C. Anderson, United States v. Microsoft, Antitrust 
Consent Decrees, and the Need for a Proper Scope of Judicial Review, 
Antitrust L.J. 1, 3 (1996).
    \87\ Id. at 4. See also Deborah A. Garza, The Microsoft Consent 
Decree: The Court of Appeals Sets Strict Limits on Tunney Act 
Review, 10 Antitrust 21 (Fall 1995) (arguing that the Tunney Act 
``might reasonably be read to authorize a more substantial role for 
the district court'').
---------------------------------------------------------------------------

    If a federal court does not reject the consent decree, the next 
logical step is for the attorneys general of farm states to 
challenge the merger in federal court. Unfortunately, such a move is 
extremely difficult given the limited enforcement budgets and 
antitrust expertise of attorney general offices in Midwestern farm 
states, leaving many of the states most affected by the merger hard-
pressed to marshal the resources necessary to challenge the merger, 
especially given the wealth of Cargill, the largest private company 
in the country.\88\ Larger states such as New York and California, 
which have larger antitrust divisions, are not likely to challenge 
the merger given their distance from the concerns of the Midwestern 
farmer. Such conditions make it possible that those who have 
advanced legitimate objections to the merger will not have their day 
in court. As a result, one of the main reasons for the passage of 
the Tunney Act--the fear of excluding interested third parties from 
the merger review process--will be ignored.
---------------------------------------------------------------------------

    \88\ The office of Attorney General in Minnesota currently has 2 
and one-half attorneys who handle antitrust matters. The offices in 
North and South Dakota do not have attorneys who work full-time on 
antitrust matters. See generally Joseph F. Brodley, Antitrust 
Standing in Private Merger Cases: Reconciling Private Incentives and 
Public Enforcement Goals, Mich. L. Rev. 2, 38-41 (1995) (explaining 
the limits on state action).
    State merger enforcement is confined to a relatively few merger-
enforcing states and is dependent on the views of changing state 
attorneys general and state budgetary support in a time of 
increasing financial stringency . . . Resources and personnel limit 
state merger enforcement. Merger cases are the most resource-
intensive antitrust litigation. Within a matter of weeks, sometimes 
even days, the plaintiff must marshall a sophisticated antitrust 
case involving proof of complex economic facts, including market 
definition, market power, and oligopolistic conduct--an awesome 
task, even for a large team of lawyers and economists representing a 
billion-dollar corporation. Yet most states have only three to five 
antitrust lawyers, others no more than one or two, and some states 
none at all. In addition, almost none of the states has a staff 
economist, and the tight time limits of merger litigation tend to 
hamper the effective multi-state coordination that occurs in other 
types of state antitrust litigation. Financial pressures also 
inhibit state merger capability and growing budgetary limitations on 
state finances may intensify these pressures.
---------------------------------------------------------------------------

    Given the importance of this merger and the constraints on state 
action if the consent decree is approved, I respectfully request 
that the comment period for this merger be extended another sixty 
days to December 12th. Several parties have expressed interest in 
commenting on the merger and will not be able to do so by October 
12th. In the interest of a fair hearing on this critical matter, I 
urge DOJ to support a lengthening of the comment period, as allowed 
under the Tunney Act.\89\
---------------------------------------------------------------------------

    \89\ 15 U.S.C. & 16(d).
---------------------------------------------------------------------------

    If the DOJ and the court do not see fit to extend the comment 
period, OCM urges the court to reject the proposed consent decree 
for failing to consider the factors set forth herein.

      Sincerely,

Jon Lauck, Ph.D.,
Special Project Director, Organization for Competitive Markets.
    Attachments to the comment filed by the Organization for 
Competitive Markets are available for inspection in room 215 of the 
U.S. Department of Justice, Antitrust Division, 325 Seventh Street, 
N.W., Washington, DC 20530 (telephone: 202-514-2481) and at the Office 
of the Clerk of the United States District Court for the District of 
Columbia, 333 Constitution Avenue, NW, Washington, DC 20001. Copies of 
these materials may be obtained upon request and payment of a copying 
fee.

Pemiscot County Farm Bureau

P.O. Box 80, Caruthersville, MO 63830, (573) 333-4196, Fax: (573) 
333-4537

August 2, 1999.
Judge Gladys Kessler,
US District Court, District of Columbia, 333 Constitution Ave. NW, 
Washington, DC 20001.

    Dear Judge Gladys Kessler: We are writing to request that you 
protect competition in this part of Missouri.
    We are concerned there may have been some misrepresentation in 
the civil action

[[Page 16012]]

case #991875 that may lead you to a different conclusion.
    Cargill was initially asked to divest itself of the Continental 
Grain Cottonwood Point elevator. We believe this was done through an 
error or misunderstanding about the location of this elevator. This 
elevator sits on the Mississippi River at a place called Cottonwood 
Point. Although it is 10 miles south of Caruthersville, MO it 
carries that address. This is unfortunate because we believe it made 
the anti-trust people feel it was too close to an elevator Cargill 
owns at New Madrid, MO. These elevators are about 47 miles apart and 
do not, to my knowledge, compete for business.
    So we are asking that you permit the sale of this elevator to 
Cargill to go ahead. We feel strongly that this will give local 
farmers the most competitive prices for our grain.
    Judge, we are asking that whatever happens, please don't let 
Bunge, Inc., acquire this elevator because they own the next 3 
elevators above it and the next 3 elevators below it (a distance of 
84 miles).
    I personally have farmed 13 miles inland from Cottonwood Point 
for just over 30 years. All my grain has been sold almost equally to 
Bunge and Continental during these years. If the grain producers in 
this area do not have 2 or more strong competitors within 25 or less 
miles, then our little world is going to get a lot more difficult 
real quick.
    Thank for your consideration in this matter.

      Sincerely,


David Haggard,
Pemiscot County Farm Bureau Board President.

October 11, 1999.

Rural Life Office

511 Bear Creek Drive, Dorchester, Iowa 52140-7505; 1-800-772-2758

Roger W. Fones,
Chief, Transportation, Energy & Agriculture Section, Antitrust 
Division, United States Department of Justice, 321 Seventh Street, 
N.W., Suite 500, Washington, DC 20530.

    Dear Mr. Fones: We are very concerned about the Department of 
Justice's ``Final Ruling'' on the case of US of America v. Cargill, 
Inc and Continental Grain Co. We ask that you please forward our 
comments and the enclosed letter to Judge Kessler.
    We work with farmers and rural communities all over the 30 
counties of north east Iowa for the Rural Life Office of the 
Archdiocese of Dubuque.
    We do not find the Department of Justice's findings for the 
merger of Cargill-Continental to be in the best interests of the 
people we work with in the 30 counties of Northeast Iowa. Producers 
will be even more limited in their markets than they currently are, 
and they face the probability that Cargill/Continental will exert 
strength in the organic and specialty markets with the take-over of 
Continental's facilities. This has to be recognized as not being in 
the public interest.
    The laws of this country are meant to protect the advancement 
and good of common people, not corporations. The action we request 
would help government to move further in this direction.

      Respectfully,

Mary and Don Klauke.
  

Western Organization of Resource Councils

2401 Montana Avenue, #301, Billings, Montana 59101; (406) 252-9672, 
FAX (406) 252-1092

October 12, 1999.
Mr. Roger W. Fones,
Chief, Transportation, Energy and Agriculture Section, Antitrust 
Division, United States Department of Justice, 325 Seventh Street, 
NW, Suite 500, Washington, DC 20530.

    By FAX: 202/307-2784

    Dear Mr. Fones: On behalf of the Western Organization of 
Resource Councils, I am writing to urge you to reopen your 
investigation into the proposed acquisition of Continental Grain by 
Cargill and extend the public comment period on the proposal. 
Mergers and acquisitions in the agribusiness industry are closing 
out the markets for family farmers and ranchers. The Department's 
approval of this merger with a few required divestitures is wholly 
inadequate to protect competition in the grain trade, which these 
two firms dominate along with ADM.
    As Jon Lauck has explained in his letter for the Organization 
for Competitive Markets to you, the Department's analysis of this 
proposal (1) fails to consider the wider concentration in 
agricultural markets beyond grain buying; (2) fails to consider the 
continuing potential for anticompetitive behavior in the post-merger 
market; (3) fails to show that the divested remnants of Continental 
will be a competitive force absent a large network of elevators 
which buy grain; (4) fails to consider the nature of the grain 
selling market; (5) fails to consider the economic disorganization 
of farmers which can be exploited by powerful buyers; (6) fails to 
consider information disparities in agricultural markets; (7) fails 
to explain the benefits of the merger; (8) and fails to consider a 
range of statutes that Congress intended courts to consider when 
making decisions about agricultural markets.
    We strongly urge your reconsideration of this action in an 
analysis which weighs these issues. The Department's strong action 
is needed here to preserve competition and free, competitive markets 
against encroachment by monopolistic corporations.

      Sincerely,

Shane Kolb,
Chair, Agriculture Issue Team.

Exeten, NE 68351,
Oct. 6, 1999.
Mr. Roger W. Fones,
Antitrust Division--U.S. Dept. of Justice, Washington, D.C. 20530.
    Dear Mr. Fones: The merger concerning Cargill & Continental 
Grain is a major concern to me as a farmer. This merger would unify 
the second and third largest grain traders in North America, which 
export 40% of the American agricultural commodities.
    To demonstrate how confident these companies are of the merger, 
a lady sold her grain to her elevator this year which is owned by 
Continental (for years) and four days later she received her check 
in a Cargill envelope. This merger has not been approved.
    In my area Cargill has an elevator on the Burlington-Northern 
rail line. They control the amount of rail cars available and the 
time. This influences the prices paid for our grain in the 
surrounding elevators and the York ethanol plant. All exist within 
less than 25 miles of our farm. We need market transparency and 
tougher anti-trust enforcement.
    Keep competition open. Do not allow the merger.


      Sincerely,
Cynthia Thomson,
State WIFE President.

Lincoln's Letter on Corporations

    ``We may congratulate ourselves that this cruel war is nearing 
its end. It has cost a vast amount of treasure and blood * * * It 
has indeed been a trying hour for the Republic; but I see in the 
near future a crisis approaching that unnerves me and causes me to 
tremble for the safety of my country.
    ``As a result of the war, corporations have been enthroned and 
an era of corruption in high places follow, and the money power of 
the country will endeavor to prolong its reign by working upon the 
prejudices of the people until all wealth's aggregated in a few 
hands and the Republic is destroyed.
    ``I feel at this moment more anxiety for the safety of my 
country than ever before, even in the midst of war.''

This letter was written by Abraham Lincoln to William F. Elkins, 
Nov. 21, 1864.

Alvo, Nebraska
Sept. 28, 1999.
Mr. Roger W. Fones Chief, Transportation, Energy and Agriculture 
Section, Antitrust Division, U.S. Department of Justice, 325 Seventh 
St. N.W. Suite 500, Washington, D.C. 20530.

    Dear Sir: As a member of a family who has resided and made its 
living on the same farm for five generations, I feel compelled to 
write to you concerning the merger of Cargill and Continental Grain.
    That merger is a major concern to all American farmers because 
of the impact Cargill's monopoly of the grain trade will have on the 
farms and communities in our areas.
    The main thrust in our operation is wheat, corn and soybean 
production and a cow/calf and cattle feeding program. That is our 
source of income.
    I believe family farmers who are producing food for the world, 
below the cost of production, are at a disadvantage competing with 
conglomerates such as the top four firms.
    I urge you to use your authority to pressure the U.S. Department 
of Justice to revisit its investigation of the Cargill/Continental 
sale.

      Respectfully yours,

Pauline Johnson.
  

Alvo, NE 68304

[[Page 16013]]

Sept. 29, 1999.
Roger W. Fones,
Chief, Transportation, Energy and Agriculture Section, Anti-Trust 
Division in U.S. Dept. of Justice, 325 Seventh Street, NW, Ste 500, 
Washington, D.C. 20530.

    Dear Sir: Regarding merger of Continental and Cargill Grain Co.
    Deep concerns of the shrinking but necessary family farmers.
    Excessive mergers are forming monopolies. In the agriculture 
sector it is putting more stress on your food producers (grain & 
livestock).
    Cargill may have already thought they have the merger sewed up 
the merger as grain sold to the Continental Grain Co. was paid for 
with a Cargill check?
    I urge you to stop this mad rush of mergers with everything. 
Seven corporations will rule the world. It is fast becoming 
international.
    Is this what our pioneer fore-fathers wanted?
    Thank you for your time and thought.
    Dyed in the wool American farm wife.

      Senior Citizen,

Dorothy McKay.
  


Elmwood, NE 68349
Mr. Roger Fones,
U.S. Dept. of Justice, Antitrust Division, 325 Seventh St. N.W. 
Suite 500, Washington, D.C.

    Dear Mr. Fones: I am a family farmer in eastern Nebraska. I am 
extremely concerned about the merger of Cargill and Continental 
grain companies. The merger of these two giant grain companies would 
lessen the competition in grains, locally, nationally and globally. 
I urge you to consider the impact this would have on us and act to 
stop the merger. This merger (proposed) needs immediate action by 
the antitrust division and the U.S. Justice Department. The 
antitrust laws are in place and need to be enforced!

      Thank You.

Norma Hall.
  

Plentywood, MT
Mr. Roger W. Fones,
Chief, Transportation, Energy and Agriculture Section, Antitrust 
Division, U.S. Dept. of Justice, 325 7th St. NW, Suite 500, 
Washington, D.C. 20530.

    Dear Mr. Fones, Having served as Transportation officer for WIFE 
for many years, and seen just what `mergers'/`takeovers'/ 
acquisitions, etc. do to rural America in the field of rail 
transportation, I write to ask that the U.S. Department of Justice 
re-open its investigation of the Cargill's acquisition of 
Continental Grain operations.
    As farmers, we are already experiencing the loss of competition 
in rural America. Producers who own one company's machinery find 
that they may have to drive 100-150 miles to acquire some repairs 
for its. Or wait until it can be mailed to them from some central 
point thousands of miles away.
    Those of us who have no alternative to shipping by rail have 
found not only that we now are `served' by one carrier, but we have 
to drive greater distances with our own farm trucks to reach a 
terminal.
    Formerly, Montana was the only state that was dominated by one 
rail carrier. Now we see that, because of mergers, other states, 
other industries, have lost the edge that competition in 
transportation gives them. Those who have watched the developments 
are not surprised that, no matter what reassurances are given by the 
company that is benefitting by the takeover, the dire predictions by 
those opposing the transaction have proven accurate.
    So now we are again among those who are predicting that the 
Cargill acquisition of Continental's grain operations will be 
beneficial only to Cargill.
    Competition is vital to not only our grain producers, but to the 
farmers of the world. The takeover of Continental's operations is 
going to dramatically affect not only those producers who are 
directly served by the Cargill/Continental terminals, but by all 
producers of grains in the U.S.
    The Antitrust Division is our only hope, so we ask that you 
exercise your authority before the amount of power exerted by one 
company becomes too great, and producers lose one more battle to 
keep competition working for them.

      Sincerely,

Mary W. Nielsen,
Montana Transportation, WIFE.


September 27, 1999.

Mr. Roger W. Fones
Chief, Transportation, Energy & Agriculture Section, Antitrust 
Division, US Department of Justice, 325 Seventh St. SW Suite 500, 
Washington, DC 20530.

Re: Cargill & Continental Grain Company Merger

    Dear Mr. Fones: It is my understanding that the final judgment 
concerning the above matter will be determined in the middle of 
October.
    I want to urge you to consider this matter very carefully and 
urge your affiliates to rule against this merger. Cargill's purchase 
of Continental Grain would unify the second and third largest grain 
traders in Nebraska, making it possible for Cargill to control the 
export market much more than it does at the present time.
    We do not need bigger companies with more control over our 
markets. We have a Cargill elevator within 15 miles of our farming 
operating. They have so many different plans for each agriculture 
producer that it is unbelievable. They have determined that our 
grain should be .5% dryer when brought into the elevator making more 
money for the elevator and less for the producer. It may not seem 
like a large amount but when you are paying the drying bill, it 
definitely adds up. They also have a plan if you buy everything from 
them--fertilizer, seed corn, chemicals, insecticide and deliver all 
your grain to them--they will do this for you and that for you. They 
definitely want control--both of the farmer and the market.
    The farming industry is in very serious trouble with today's 
markets so low and our cost of production going up.
    We hope that in reading this letter that you will investigate 
the merger more thoroughly and understand why this merger is being 
challenged in the agriculture sector. Since this is harvest in the 
Midwest, it would also be of some assistance if the deadline for 
comment would be extended another sixty days to December 12, 1999.

      Yours in Ag,

Frances Heinrichs,
Women Involved in Farm Economics (WIFE).

Tab 4

Greta Anderson, Iowa City, IA
September 19, 1999.
Judge Gladys Kessler,
U.S. District Court, for the District of Columbia, 333 Constitution 
Ave. N.W., Washington, D.C. 20001.

Re: United States of America v. Cargill, Inc. and Continental Grain 
Company

    Dear Judge Kessler:
    Presently before you awaiting your approval is a ``Final 
Judgment'' filed by the U.S. Department of Justice relative to the 
purchase of the grain merchandising division of Continental Grain 
Co. by the Cargill Corp.
    Legal precedent, according to the Department of Justice, 
requires that ``[t]he balancing of competing social and political 
interests affected by a proposed antitrust consent decree must be 
left, in the first instance, to the discretion of the Attorney 
General. The court's role in protecting the public interest is one 
of insuring that the government has not breached its duty to the 
public in consenting to the decree. The court is required to 
determine not whether a particular decree is the one that will best 
serve society. but whether the settlement is within the reaches of 
the public interest.''
    In its July 8, 1999 ``Final Judgment'' I believe in fact that 
the Department of Justice has ``breached its duty to the public in 
consenting to the decree'' and that its Final Judgment is not 
``within the reaches of the public interest.''
    As the Department of Justice's own ``Complaint'' states, the 
Cargill purchase would ``substantially lessen competition for 
purchases of corn, soybeans, and wheat in each of the relevant 
geographic markets, enabling it unilaterally to depress the prices 
paid to farmers. The proposed transaction will also make it more 
likely that the few remaining grain trading companies that purchase 
corn, soybeans, and wheat in these markets will engage in 
anticompetitive coordination to depress farm prices.''
    Using the Department of Justice's own figures and criteria we 
see in its ``Complaint'' that even before this announced purchase 
the U.S. grain trade was already dominated, if not monopolized, by 
Cargill and nothing in the Department of Justice's ``Final 
Judgment'' addresses itself to that important issue.
    Likewise, the Department of Justice must consider more that the 
grain buying operations of Cargill. The acquisition of Continental's 
seventy elevators will enhance the economic power of Cargill as a 
general matter. Such a result concerns farmers because Cargill's 
assets and economic power can be deployed across a range of 
agricultural sectors.
    For example, Cargill stands out as a top-four firm in beef 
packing, cattle feedlots, pork

[[Page 16014]]

packing, broiler production, turkey production, animal feed plants, 
grain elevator capacity, flour milling, dry corn milling, wet corn 
milling, soybean crushing, and ethanol production. Such a dominant 
position across many agricultural markets will allow Cargill to 
transfer resources between sectors according to the economic 
conditions that are prevailing at a given time.
    The ability to transfer assets will allow Cargill to maintain 
its dominant status in all of these markets irrespective of its 
competitive prowess. Unlike farmers, who are forced into bankruptcy 
after a few bad seasons, Cargill will maintain its dominant status 
over time regardless of economic performance over the short-term. 
With Continental's assets, Cargill will become an even more powerful 
and ``sophisticated'' firm, even more capable of strategic, 
cooperative, and anti-competitive behavior.
    To me, it is tragic that the government does not put the rights 
of family farmers first, but rather participates in the idea that 
there are ``too many farmers.'' Drive through rural America: you 
will see that there are not too many farmers, but rather, too many 
suburbanites and strip malls. The accumulation of capital such as 
Cargills is not ``inevitable'', nor is this merger.
    In the name of economic and social justice and the preservation 
of the family farm system of agriculture in the United States I urge 
you to recommend that the Department of Justice withdraw its ``Final 
Judgment,'' study in far greater detail this ill-advised sale and 
carefully consider the grave anti-trust issues that it presents and 
the dire consequences to both producers and consumers of our food 
supply.

      Sincerely,

Greta Anderson.
  


Iowa City, IA
September 22, 1999.

    Dear Sir: I am writing my concern over the merger of Cargill and 
Continental. Bigger is not better, the market for cash grain is 
already highly concentrated and yet another merger would spell doom 
for the independent farmer.

      Sincerely,

Vivian Anderson.
  


Cresco, IN
    Dear Chief Fones: I was born and raised on a farm, coming from a 
family of 13 children. Those were days of fair treatment, where 
farmers could make a living (however big the family). I believe the 
small average farmer meant something. These days we're used, to put 
it bluntly (as doormats). Is it just the big shots (the powers that 
be) that force us to do things their way, no matter who they step 
on? Don't us little guys count? I was taught that God made us all 
equal. Do you think the way the smaller people are being treated is 
equal and fair? I don't, and I'm sure God didn't have plans for the 
big corporations (such as Cargill) to be (in control); as they seem 
to be doing. Haven't we been pushed down, stepped on, and ground in 
the dirt enough? I think we count too. I beg you, Please don't let 
Cargill have any more control. Seems we've been damaged about as 
much as possible. We don't have a leg to stand on now; let alone if 
you let Cargill and other big corporations have any more control. We 
work very hard and can't squeeze a meager pauper's wage and living 
now. Why can't we have a little cream of the crop? Are the (people 
in control) entitled to all the cream and us little people can have 
the skim milk or whey that is left over?
    I think you should keep in mind that God made us all equal; and 
you and I know the way things are now is way off balance.
    Please don't let Cargill or any other of these big corporations 
have any more control and completely wipe us out

      Thank you Kindly,

Kay M. Barnes.
  

September 23, 1999.

    Dear Sir: This is in response to the invitation for comments 
regarding Final Judgment; the case of Cargill merging. This was 
written up in the Minnesota Farmers Union August publication and got 
me to thinking about how we little people are being squeezed and 
eventually choked by big business
    As a midwest dairy farmer, reading articles only depresses one 
as there is a feeling of hopelessness implied by the ``powers that 
be''. They talk and talk, attend meeting after meeting and declare 
the poor farm situation must be addressed and so far in 1999 that's 
as far as it goes.
    The CEO's of the major grain mergers can only see $$ for their 
own pockets and I suppose one can't judge harshly on that, but is it 
fair to the hard working farmer to not have a decent cut for his 
efforts. Every day in the business section someone's throat is cut 
by the money people. I am thoroughly opposed to more merging. Let's 
put a moratorium on mergers until someone figures out the 
agriculture and dairy dilemma and really moves in the right 
direction for all.

    Sincerely,

Mary Beckrich.
  


Cologne, Minnesota
October 11, 1999.
Mr. Roger W. Fones,
Chief, Transportation, Energy and Agriculture Section, Anti-Trust 
Division, U.S. Department of Justice, 325 Seventh Street, N.W., 
Suite 500, Washington, DC 20530.

FAX: 202/307-2784

    Dear Mr. Fones: I am writing to request that you conduct further 
investigation of the Cargill-Continental Grain sale and that you 
extend the comment deadline for another sixty days.
    Are you aware of what the creation of a large monopoly will do, 
not only to grain farmers in this country, but also to all 
consumers?
    Monopolies always create higher prices for the consuming public. 
They create even lower prices for those who must sell their 
commodities to the monopolies. Grain prices are already far below 
break-even.
    Farmers are going broke in our state at an alarming rate. Across 
the U.S., farm income is down by 70%. Depressed prices are ruining 
not only farmers but all small-town businesses. I urge you to 
conduct a more thorough investigation into the Cargill/Continental 
Sale before submitting a final judgment on this.
    Please give my request your serious consideration.

   Sincerely,

Deari Borth.
  

October 11, 1999.
Meade, KS
Mr. Roger W. Fones,
Chief, Transportation, Energy and Agriculture Section, Anit-Trust 
Division, U.S. Department of Justice, 325 Seventh Street, N.W., 
Suite 500, Washington, DC 20530.

FAX: 202/307-2784

    Dear Mr. Fones: I am writing to request that you conduct further 
investigation of the Cargill-Continental Grain sale and that you 
extend the comment deadline for another sixty days.
    Are you aware of what the creation of a larger monopoly will do, 
not only to grain farmers in this country, but also to all 
consumers?
    Monopolies always create higher prices for the consuming public. 
They create even lower prices for those who must sell their 
commodities to the monopolies. Grain prices are already far below 
break-even.
    Farmers are going broke in our state at an alarming rate. Across 
the U.S. farm income is down by 70%. Depressed prices are ruining 
not only farmers but all small-town businesses. I urge you to 
conduct a more thorough investigation into the Cargill/Continental 
Sale before submitting a final judgment on this.
    Please give my request your serious consideration.

      Sincerely,


Greg Borth.
  


Honorable Judge Gladys Kessler
U.S. District Court, District of Columbia, 333 Constitution Ave. 
N.W., Washington, DC 20001.

Re: United States of America v. Cargill, Inc. and Continental Grain 
Company

    Dear Judge Kessler: You have before you awaiting your approval a 
Final Judgment filed by the U.S. Department of Justice relative to 
the purchase of the grain merchandising division of Continental 
Grain Co. by the Cargill Corp, which is a privately held 
corporation.
    Legal precedent, according to the Department of Justice, 
requires that the balancing of competing social and political 
interests affected by a proposed antitrust consent decree must be 
left, in the first instance, to the discretion of the Attorney 
General. The court's role in protecting the public interest is one 
of insuring that the government has not breached its duty to the 
public in consenting to the decree. The court is required to 
determine not whether a particular decree is the one that will best 
serve society, but whether the settlement is within the reaches of 
the public interest.
    In its July 8, 1999 Final Judgment I believe in fact that the 
Department of Justice has

[[Page 16015]]

breached its duty to the public in consenting to the decree and that 
its Final Judgment is not within the reaches of the public interest.
    Clearly, as the Department of justice's own complaint states the 
Cargill purchase would substantially lessen competition for 
purchases of corn, soybeans, and wheat in each of the relevant 
geographic markets, enabling it unilaterally to depress the prices 
paid to farmers. The proposed transaction will also make it more 
likely that the few remaining grain trading companies that purchase 
corn, soybeans, and wheat in these markets will engage in 
anticompetitive coordination to depress farm prices.
    Using the Department of Justice's own figures and criteria we 
see in its Complaint that even before this announced purchase the 
U.S. grain trade was already dominated, if not monopolized, by 
Cargill and nothing in the Department of Justice's Final Judgment 
addresses itself to that important issue.
    Likewise, the Department of Justice must consider more that the 
grain buying operations of Cargill. The acquisition of Continental's 
seventy elevators will enhance the economic power of Cargill as a 
general matter. Such a result concerns farmers because Cargill's 
assets and economic power can be deployed across a range of 
agricultural sectors.
    For example, Cargill stands out as a top-four firm in beef 
packing, cattle feedlots (where Continental is the largest), pork 
packing, broiler production, turkey production, animal feed plants, 
grain elevator capacity, flour milling, dry corn milling, wet corn 
milling, soybean crushing, and ethanol production. Such a dominant 
position across many agricultural markets allows Cargill to transfer 
resources between sectors according to the economic conditions that 
are prevailing at a given time.
    This vertical and horizontal domination by Cargill allows then 
to maintain dominant status in all of these markets. While small 
family farmers are forced into bankruptcy after a few bad seasons, 
Cargill will maintain its dominant status over time because it can 
afford to subsidize poor economic performance over the short-term. 
With Continental's assets, Cargill will become an even more powerful 
and sophisticated firm, even more capable of strategic, cooperative, 
and anti-competitive behavior.
    In the name of economic and social justice and the preservation 
of the family farm system of agriculture in the United States I urge 
you to recommend that the Department of Justice withdraw its Final 
Judgment, study in far greater detail this ill-advised sale and 
carefully consider the grave anti-trust issues that it presents and 
the dire consequences to both producers and consumers of our food 
supply.
      Sincerely,

Marilyn Borchardt,
Daughter of a former farmer.

Meade, KS.
October 11, 1999.
Mr. Roger W. Fones,
Chief, Transportation, Energy & Agriculture Section, Anti-Trust 
Division, U.S. Department of Justice, 325 Seventh Street, N.W., 
Suite 500, Washington, DC 20530.
FAX: 202/307-2784

    Dear Mr. Fones: I am writing to request that you conduct further 
investigation of the Cargill-Continental Grain sale and that you 
extend the comment deadline for another sixty days.
    Are you aware of what the creation of a larger monopoly will do, 
not only to grain farmers in this country, but also to all 
consumers?
    Monopolies always create higher prices for the consuming public. 
They create even lower prices for those who must sell their 
commodities to the monopolies. Grain prices are already far below 
break-even.
    Farmers are going broke in our state at an alarming rate. Across 
the U.S., farm income is down by 70% Depressed prices are ruining 
not only farmers but all small-town businesses. I urge you to 
conduct a more thorough investigation into the Cargill/Continental 
Sale before submitting a final judgment on this.
    Please give my request your serious consideration.

      Sincerely,

Isabelle Borth,
  

Tri-Von Enterprises,

107 S. Celina Street, Roanoke, IL 61561-1097,

September 25, 1999.
Energy & Agriculture Section, Antitrust Division, U.S. Dept. of 
Justice, 325 7th St. NW, Ste 550, Washington, D.C. 20530.

Attention: Roger W. Fones, Chief of Transportation

    Dear Mr. Fones, We are concerned about the Cargill-Continental 
merger. We do not believe it is required to compete in the global 
economy and will be extremely detrimental to the agricultural 
community. It is our opinion that this market is already highly 
concentrated and we feel this will work to the destruction of the 
few remaining independent farmers left here in our precious prairie.
    Although we are not farmers, we sell computers to many of our 
local farmers and know the sad situation this would put them in. 
Independent farmers are the backbone of this nation and we must not 
let corporate farming take over. Enough is enough!


      Sincerely,

Loris von Brethorst.
  

Callicrate Feedyard

P.O. Box 748, St. Francis, KS 67756s

October 11, 1999.
Mr. Roger W. Fones,
Chief, Transportation, Energy & Agriculture Section, Antitrust 
Division, U.S. Department of Justice, 325 Seventh Street, N.W., 
Suite 500, Washington, DC 20530.

    Dear Mr. Fones, Mergers and concentration have gone too far. 
Justice not only needs to deny the Cargill-Continental Merger but 
also needs to reverse prior mergers and restore competition in 
agricultural markets.
    Companies like Cargill, ConAgra, ADM, Farmland and IBP are 
destroying our food system and killing us. We are losing our towns 
and communities with their low fixed commodity prices.
    The big money of companies like Cargill is dominating government 
policy and influencing the non-enforcement of antitrust laws for 
their benefit; what about the people? Stop using the lame excuse of 
``economies of scale and efficiencies,'' they have no more basis 
today than when used as an excuse in Thomas Jefferson's day.

      Sincerely,

Mike Callicrate.
  


New York Times,

October 11, 1999.

Essay By William Safire
    Where is antitrust? I say No to the Cargill-Continental 
Merger!--G.M. Calnon, St. Francis, KS 67756.

Clinton's Consumer Rip-Off

    Jacksonville, Fla.--``You want to buy this new cable service 
that's much faster than your old modem,'' my son the information 
architect told me. Not wanting to become the slowpoke pundit, I 
called my local cable company and ordered ExpressNet. A new black 
box cost $150 and the monthly fee was $25.
    Two weeks later, a disembodied voice called to say that the 
superspeed Internet connecting service had merged with a Texas 
conglomerate and if I didn't agree to the doubling of the monthly 
rate, my service would end and I would be stuck with a useless $150 
receiver.
    I again called my local cable monopoly. Although I never reached 
a human being, its complaint software signaled that I could continue 
for six months at the original rate, after which it was double or 
nothing.
    This minor outrage came to mind in watching the gee-whiz, ain't-
these-big-numbers-fun accounts on television news of the latest 
combinations of corporate colossi.
    Worldcom, which last year bought MCI, was now swallowing up 
Sprint for $115 billion.
    This, analysts assure us, will allow the new supergiant to 
compete with AT&T, which already is plunking down $58 billion for 
Mediaone with the smiling approval of roundheeled Clintonites at the 
Federal Communications Commission.
    Why are we going from four giants in telecommunications down to 
two? Because, the voice with the corporate-government smile tells 
us, that will help competition. Now each giant will be able to hedge 
its bets in cable, phone line and wireless, not knowing which form 
will win out. The merger-manic mantra: In conglomeration there is 
strength.
    That's what they said a long generation ago when business 
empire-builders boosted their egos by boosting their stock to buy 
the earnings of unrelated companies. A good manager could manage 
anything, they said, achieving vast economies of scale. As 
stockholders discovered to their loss, that turned out to be 
baloney.
    Ah, but now, say the biggest-is-best philosophers, we're merging 
within the field we know best. And if we don't combine quickly, the 
Europeans and Asians will,

[[Page 16016]]

stealing world business domination from us. The urgency of 
``globalization,'' say today's mergermaniacs, destroys all notions 
of diverse competition, and only the huge, heavily capitalized 
multinational can survive.
    That's why we see the Old Seven Sisters of oil working their way 
down toward two big sisters having fun with fungibility, and why our 
former Big Seven accounting firms are headed to a Big Two. Unchecked 
international combines can crush unions, water down professional 
ethics, circumvent national regulation and stick it to consumers.
    Here are two startling, counterintuitive thoughts: The fewer 
companies there are to compete, the less competition there is. And 
as competition shrinks, prices go up and service declines for the 
consumer. (Say these reactionary words at the annual World Economic 
Forum in Davos, and listen to the global wheeler-dealers guffaw.)
    Who is supposed to protect business and the consumer from the 
power of trusts? Republican Teddy Roosevelt believed it to be the 
Federal Government, but the antitrust division of Janet Reno's 
Justice Department is so transfixed by its cases against Microsoft 
and overseas vitamin companies that it has little time to enforce 
antitrust law in dozens of other combinations that restrain free 
trade.
    Our other great protector of the public interest in diverse 
sources is supposed to be the F.C.C. When MCI merged with Worldcom 
last year, the chairman appointed by President Clinton, William 
Kennard, took no action but direly warned that the industry was 
``just a merger away from undue concentration.'' Now that is 
happening.
    Why will the F.C.C., after asking for some minor divestiture, 
ultimately welcome a two-giant waltz? For the same reason that the 
broadcasters' lobby was able to steal tens of billions in the 
public's bandwidth assets over the past few years: Mr. Clinton wants 
no part of a communication consumer's ``bill of rights.''
    Candidates Bradley, Bush and Gore look shyly away lest trust-
luster contributions dry up. Only John McCain dares to say: 
``Anybody who glances at increases in cable rates, phone rates, 
mergers and lack of competition clearly knows that the special 
interests are protected in Washington and the public interest is 
submerged.''
    Today's populist message comes to you by my old, slow modem.

October 11, 1999.
Mr. Roger W. Fones,
Chief, Transportation, Energy and Agriculture Section, Anti-Trust 
Division, U.S. Department of Justice, 325 Seventh Street, N.W., 
Suite 500, Washington, DC 20530.

FAX: 202/307-2784

    Dear Mr. Fones: The purpose of this letter is to request that 
you conduct further investigation of the Cargill-Continental Grain 
sale and that you extend the comment deadline for another sixty 
days.
    The creation of a larger monopoly will not only depress grain 
prices further in this country, but also be detrimental to all 
consumers.
    Monopolies always create higher prices for the consuming public. 
They create even lower prices for those who must sell their 
commodities to the monopolies. Grain prices are already far below 
break-even.
    Farmers are going broke in our state at an alarming rate. Across 
the U.S., farm income is down by 70%. Depressed prices are ruining 
not only farmers but all small-town businesses. I urge you to 
conduct a more thorough investigation into the Cargill/Continental 
Sale before submitting a final judgment on this.
    Please give this your serious consideration.

      Sincerely,

Don Nauereud.
Mary Gosserand.


Brooksville, MS
October 11, 1999.
Mr. Roger Fones,
Chief, Transportation, Energy & Agriculture Section, Antitrust 
Division, U.S. Department of Justice, 325 Seventh Street, N.W., 
Suite 500, Washington, DC 20530.

    Dear Mr. Fones: As a daughter and wife of farm producers, I have 
a stake in the future of the American farm family. I am actively 
involved in the operation and management of our operation. I am also 
a homemaker--I have three teenage children. My family worked 
diligently the last eighteen months--long hours, day after day--and 
we would have lost less money if we had done nothing. This is 
disheartening to say the least. Cattle and grain prices have 
remained low and feed and other related costs have been high. I tell 
you this not to whine but to explain our plight.
    The rapid corporate concentration of the world's largest grain 
and meat handlers is killing the farm family. When we are gone and 
the people of this country who are accustomed to a relatively 
inexpensive quality food supply realize what has happened, it will 
be too late. Please stop the Cargill-Continental Grain sale for the 
reason that it will further impact grain prices and farm income in 
my community and in the U.S. in general. Please extend the comment 
deadline for another sixty days. We must have a competitive market 
in this country.
    Thank you for your consideration of this matter. If you eat, you 
have a stake in this ruling. When farm families are driven out of 
business, the cost of foods will skyrocket. Make no mistake about 
that. If you are a consumer, you are very vulnerable. Mr. Fones, 
this includes you.

      Sincerely,

Lori Chancellor.
  


September 20, 1999.
Judge Gladys Kessler,
U.S. District Court for the District of Columbia, 333 Constitution 
Ave. N.W., Washington, DC 20001.

Re: United States of America v. Cargill, Inc. and Continental Grain 
Company

    Dear Judge Kessler: Presently before you, awaiting your 
approval, is a ``Final Judgment'' filed by the U.S. Department of 
Justice relative to the purchase of the grain merchandising division 
of Continental Grain Co. by the Cargill Corp.
    Legal precedent, according to the Department of Justice, 
requires that ``[t]he balancing of competing social and political 
interests affected by a proposed antitrust consent decree must be 
left, in the first instance, to the discretion of the Attorney 
General. The court's role in protecting the public interest is one 
of insuring that the government has not breached its duty to the 
public in consenting to the decree. ``The court is required to 
determine not whether a particular decree is the one that will best 
serve society, but whether the settlement is `within the reaches of 
the public interest.'''
    In its July 8, 1999 ``Final Judgment'' I believe in fact that 
the Department of Justice has ``breached its duty to the public in 
consenting to the decree and that its ``Final Judgment'' is not 
``within the reaches of the public interest.''
    Clearly, as the Department of Justice's own ``Complaint'' 
states, the Cargill purchase would ``substantially lessen 
competition for purchases of corn, soybeans, and wheat in each of 
the relevant geographic markets, enabling it unilaterally to depress 
the prices paid to farmers. The proposed transaction will also make 
it more likely that the few remaining grain trading companies that 
purchase corn, soybeans, and wheat in these markets will engage in 
anticompetitive coordination to depress farm prices.''
    Using the Department of Justice's own figures and criteria we 
see in its ``Complaint'' that even before this announced purchase 
the U.S. grain trade was already dominated, if not monopolized, by 
Cargill and nothing in the Department of Justice's ``Final 
Judgment'' addresses itself to that important issue.
    Likewise, the Department of Justice must consider more that the 
grain buying operations of Cargill. The acquisition of Continental's 
seventy elevators will enhance the economic power of Cargill as a 
general matter. Such a result concerns farmers because Cargill's 
assets and economic power can be deployed across a range of 
agricultural sectors.
    For example, Cargill stands out as a top-four firm in beef 
packing, cattle feedlots (where Continental is the largest), pork 
packing, broiler production, turkey production, animal feed plants, 
grain elevator capacity, flour milling, dry corn milling, wet corn 
milling, soybean crushing, and ethanol production. Such a dominant 
position across many agricultural markets will allow Cargill to 
transfer resources between sectors according to the economic 
conditions that are prevailing at a given time.
    The ability to transfer assets will allow Cargill to maintain 
its dominant status in all of these markets irrespective of its 
competitive prowess. Unlike farmers, who are forced into bankruptcy 
after a few bad seasons, Cargill will maintain its dominant status 
over time regardless of economic performance over the short-term. 
With Continental's assets, Cargill will become an even more powerful 
and ``sophisticated'' firm, even more capable of strategic, 
cooperative, and anti-competitive behavior.
    In the name of economic and social justice and the preservation 
of the family farm system of agriculture in the United States I urge 
you to recommend that the Department of Justice withdraw its ``Final 
Judgment,'' study in far greater detail this ill-advised sale

[[Page 16017]]

and carefully consider the grave anti-trust issues that it presents 
and the dire consequences to both producers and consumers of our 
food supply.

      Thank you.

Donald B. Clark,
Convener, United Church of Christ, Network for Environmental & Economic 
Responsibility.


October 1, 1999.
Judge Gladys Kessler
U.S. District of Columbia, 333 Constitution Ave. NW, Washington, DC 
20001.

RE: Cargill/Continental Grain Sale

    Your Honor: It is my understanding you are taking public comment 
regarding the sale of Continental Grain to Cargill. It is with this 
understanding I write.
    I believe every person has a right to the gifts of creations, 
especially to the necessities of life. Respect for the dignity of 
the human person also requires that each person has the right to 
free enterprise, the right to undertake the work that is their 
calling and the right to fair compensation for that work. This right 
is compromised when too much control is concentrated to increase the 
power of wealth of a few. Food, as well as the facilities for 
production and distribution, should not be concentrated to the 
benefit of a few.
    The Cargill purchase of Continental Grain facilities will 
increase Cargill's buying power and price control; it will decrease 
the markets available to farmers and cause farmers to have to 
transport grain farther, especially if some terminals are closed to 
increase corporate profits; it will position Cargill to dominate 
specialty or ``niche'' markets because of the acquisition of 
Continental's storage facilities (markets that farmers are currently 
using to try to find profitability in already heavily Cargill-
dominated markets).
    Family farms are already struggling in the mid-west due to mega 
hog, mega dairy and mega beef operations. This would put another 
nail into the already partly closed coffin of family farms. Some of 
the family farms in my part of Iowa have been in the same family for 
100 to 150 years. These families keep my small town alive and 
thriving.
    The already rampant farm crisis is putting a squeeze on farm 
families which in turn puts a squeeze on the small businesses in my 
town, which in turn makes me have to drive further to purchase food, 
clothing and essential items at a greater cost.
    I realize that the farming community is only 2% of the political 
vote but it is 100% of food production. One family farm feed 
approximately 212 persons. If the current farm crisis continues 
statistics show 6000 Iowa family farms will go belly up in the next 
couple years. Should this happen 112,000 non farming people will be 
affected. There are 49 other states in the union that I haven't even 
included in these figures.
    I've been told that mega corporations are going to be the future 
of the US. It it my belief that mega corporations will only happen 
if we give up the fight. America has always been known as the land 
of opportunity and I see no reason for that to change. As Abraham 
Lincoln once said, ``Let us have faith that right makes might; and 
in that faith let us to the end dare to do our duty as we understand 
it.'' or in the words of Margaret Mead, ``Never doubt that a small 
group of thoughtful committed citizens can change the world; indeed, 
it's the only thing that ever has.''
    Thank you for listening to me.

      Sincerely,

Shari Cummings.
  

October 11, 1999.
Mr. Roger W. Fones,
Chief, Transportation, Energy & Agriculture Section, Antitrust 
Division of Justice, 325 Seventh Street, N.W., Ste 500, Washington, 
DC 20530.

Via FAX: 202-307-2784

    Dear Mr. Fones: As the Executive Vice President and Director of 
a small rural community bank outside of Memphis, Tennessee, and as 
the daughter of a farmer. I have personally witnessed the demise of 
the ``family farmer.'' I have seen ``up close and personal'' the 
struggles of these hard working people for all of my life. While 
they seem to easily take into stride their battle with the 
environmental elements, their struggles with rising production costs 
and stagnant to declining harvest prices has driven countless 
operations out of business. Ten years ago, our bank financed about 
two dozen local operations, and today, we have only two operations 
remaining viable. Given the very small size of our community, these 
numbers are quite staggering to our local economy.
    Without exception, their demise is due to the ever increasing 
production costs and stagnant or declining harvest prices. One does 
not habe to look very hard at the reason for this problem. The 
biggest issue that has driven hundreds of thousands of US family 
farmers is the rapid corporate concentration of the world's largest 
grain and meat handlers. While the family farmers harvest prices 
remain stagnant, or even declined, the prices in the grocery store 
has SOARED!! Most of the general population is oblivious to this 
issue, but, when they are finally aware of it, it will be too late!
    I can no longer sit idly by and not speak on behalf of this 
vital segment of our nations economy, but also on behalf of all 
consumers. With the absence of the family farmer, the cost of food 
will skyrocket.
    It is for this reason, that I implore you to prevent the 
Cargill-Continental Grain sale and stop the negative impact on grain 
prices and farm income in my community and across this nation. 
Please extend the comment deadline for another sixty days. You have 
the power to ``do the right thing,'' or else we will be ``paying the 
price'' for generations to come.

      Sincerely.

Peggy B. Daugherty,
Executive Vice President, The Bank of Moscow, Moscow, Tennessee.

Mr. Roger Fones,
Chief of Energy & Ag. Section, Antitrust Division, U.S. Dept. of 
Justice, 325 7th St., N.W., Suite 500, Washington, D.C. 20530.

    Sir: Please do not approve of the purchasing of the grain 
division of Continental by Cargill.
    We raise cattle, wheat and barley in this area of Montana.
    There is little competition in the world markets placing the 
farm and ranches at the mercy of a few international companies. 
There will be no chance to improve the depressed prices with so 
little competition. Our rural life style will continue to 
deteriorate as low prices are driving farmers and ranchers out of 
business.

      Sincerely,

Lymen and Darlene Denzer.
  


Dewell Motor Co.

P.O. Box 109, Fowler, Kansas 67844

10 October 1999.
Mr. Roger W. Fones,
Chief, Transportation, Energy and Agriculture Section, Anti-Trust 
Division, U.S. Department of Justice, 325 Seventh Street, N.W., 
Suite 500, Washington, D.C. 20530.

FAX: 202/307-2784

    Dear Mr. Fones: I am writing this to request that you conduct 
further investigation of the Cargill-Continental Grain sale and that 
you extend the comment deadline for another sixty days.
    Are you aware of what the creation of a larger monopoly will do, 
not only to grain farmers in this country, but also to all 
consumers?
    Monopolies always create higher prices for the consuming public. 
They create even lower prices for those who must sell their 
commodities to the monopolies. Grain prices are already far below 
break-even.
    Farmers are going broke in our state at an alarming rate. Across 
the U.S., farm income is down by 70%. Depressed prices are ruining 
not only farmers but all small-town businesses. I urge you to 
conduct a more thorough investigation into the Cargill/Continental 
Sale before submitting a final judgment on this.
    Please give my request your serious consideration.

      Sincerely,

Steve Dewell.
  

Dobbs Ranch

957 Manns Creek Road  Weiser, Idaho 83672-5523

October 11, 1999.
Mr. Roger W. Fones
Chief of Transportation, Energy and Agriculture Section

    Dear Mr. Fones: Please extend the public comment period for a 
minimum of 60 days on the Continental/Cargill Grain merger. Please 
conduct a more thorough investigation of this sale before submitting 
a Final Judgment in this matter.
    Please do this for your children, grandchildren and all future 
generations of food consumers in this great country. The 
monopolization of America's food supply is one of the most 
frightening things that is happening in this country. As a family

[[Page 16018]]

farmer/rancher I beg you to continue your investigation.

      Sincerely yours,

Grant and Mabel Dobbs.
Blvd Island, MN
    September 25, 1999.

Mr. Roger W. Fones,
US Dept of Justice, 325 7th Street NW Suite 500, Washington, DC 
20530.

    Dear Mr. Fones: Considering the months of hearings regarding 
Bill Gates's Micro Soft monopoly, and (over a decade ago) the 
breakup of AT&T because they were too large, it seems unfathomable 
that you would Consider giving Cargill total control of the world 
with the Cargill-Continental merger. Cargill is already a monster 
that everyone is afraid of. Have you seen any news on any media that 
would dare till about Cargill's present control . . . let alone the 
total control they would have after this merger? No . . . 
Furthermore you wont because Cargill has the power to crush any 
media that would tell the story. Cargill has cleverly contributed to 
charities that don't want their funds cut off so NO ONE is 
objecting.
    Cargill already owns the docks in major foreign countries so 
ships of grain other than Cargill's are not allowed to dock.
    We live in rural Minnesota where the independent farmer has few 
options. Please allow us the few we have left.
    This affects much more than farm prices--this merger spells doom 
for our entire free enterprise system.
    Please have the courage and backbone to stop this Cargill-
Continental merger!

      Sincerely,

C.K. Dresser.
  

Jordan Valley, OR 92910
September 11, 1999.
    Dear Mr. Fones: We are cattle producers in the state of Oregon 
and we are requesting that you conduct a more thorough investigation 
of the Cargill/Continental Grain companies. This will exaserbate the 
detremental effects of concentration in the grain and livestock 
industries. Agriculture in America is in trouble, involving the 
safety of our food supply the survival of rural communities and the 
survival of agriculture producers. To have this much concentrated 
purchasing power in the hands of one company, is unthinkable. It 
shouldn't be difficult for our government to recognize the inherant 
with such a merger.
    Also, we would ask that you extend the comment period on the 
merger.

      Thank you.

Richard & Margene Eiguren.
  

Englehart Ranch

Meadow, SD 57644-7502

Judge Gladys Kessler

U.S. District Court for the District of Columbia, 333 Constitution 
Ave. NW, Washington, D.C. 20001.

Re: United States of America v. Cargill, Inc. and Continental Grain 
Company

    Dear Judge Kessler: Presently before you, awaiting your 
approval, is a ``Final Judgment'' filed by the U.S. Department of 
Justice relative to the purchase of the grain merchandising division 
of Continental Grain Co. by the Cargill Corp.
    Legal precedent, according to the Department of Justice, 
requires that ``[t]he balancing of competing social and political 
interests affected by a proposed antitrust consent decree must be 
left, in the first instance, to the discretion of the Attorney 
General. The court's role in protecting the public interest is one 
of insuring that the government has not breached its duty to the 
public in consenting to the decree. ``The court is required to 
determine not whether a particular decree is the one that will best 
serve society, but whether the settlement is `within the reaches of 
the public interest.' ''
    In its July 8, 1999 ``Final Judgment'' I believe the Department 
of Justice has ``breached its duty to the public in consenting to 
the decree and that its ''Final Judgment'' is not ``within the 
reaches of the public interest.''
    Clearly, as the Department of Justice's own ``Complaint'' 
states, the Cargill purchase would ``substantially lessen 
competition for purchases of corn, soybeans, and wheat in each of 
the relevant geographic markets, enabling it unilaterally to depress 
the prices paid to farmers. The proposed transaction will also make 
it more likely that the few remaining grain trading companies that 
purchase corn, soybeans, and wheat, in these markets will engage in 
anticompetitive coordination to depress farm prices.''
    Using the Department of Justice's own figures and criteria we 
see in its ``Complaint'' that even before this announced purchase 
the U.S. grain trade was already dominated, if not monopolized, by 
Cargill and nothing in the Department of Justice's ``Final 
Judgment'' addresses itself to that important issue.
    Likewise, the Department of Justice must consider more than the 
grain buying operations of Cargill. The acquisition of Continental's 
seventy elevators will enhance the economic power of Cargill as a 
general matter. Such a result concerns farmers because Cargill's 
assets and economic power can be deployed across a range of 
agricultural sectors.
    For example, Cargill stands out as a top-four firm in beef 
packing, cattle feedlots (where Continental is the largest), pork 
packing, broiler production, turkey production, animal feed plants, 
grain elevator capacity, flour milling, dry corn milling, wet corn 
milling, soybean crushing, and ethanol production. Such a dominant 
position across many agricultural markets will allow Cargill to 
transfer resources between sectors according to the economic 
conditions that are prevailing at a given time.
    The ability to transfer assets will allow Cargill to maintain 
its dominant status in all of these markets irrespective of its 
competitive prowess. Unlike farmers, who are forced into bankruptcy 
after a few bad seasons, Cargill will maintain its dominant status 
over time regardless of economic performance over the short-term. 
With Continental's assets, Cargill will become an even more powerful 
and ``sophisticated'' firm, even more capable of strategic, 
cooperative, and anti-competitive behavior.
    I've seen our market opportunities slowly shrinking. We 
currently have wheat in storage going into its third year in the 
bin. Why, because the price is so low on today's market that it is 
worth more to leave it in the bin as an asset on our bank's 
financial statement. As the market for wheat becomes more 
concentrated in the hands of fewer traders, the farmer will receive 
less, the huge agricorporations will depress the market at will and 
eventually force the farmers into bankruptcy. In South Dakota we 
have little access to wheat buyers, we are dependent upon those in 
our local area now currently dealing with farmer owned cooperatives 
who ship it to the big terminals by truck. This merger will remove 
what little competitiveness now remains in the wheat trade. Making 
Cargill even bigger will give them even greater power in all 
segments of agriculture. The competition is being narrowed to the 
point that the family farm, which has been the very foundation of 
this great nation, will go down in bankruptcy, despair, and 
desolation. This corporatization of agriculture will destroy us, the 
family rancher and farmer. We are human beings (generations of 
families) that have worked, nurtured, conserved, and loved the land 
while feeding this nation's population at the ``lowest cost per 
capita income'' of any country in the world.
    In the name of economic and social justice and the preservation 
of the family farm system of agriculture in the United States, I 
urge you to recommend that the Department of Justice withdraw its 
``Final Judgment''. Please study in far greater detail this ill-
advised sale; carefully consider the grave anti-trust issues that it 
presents and the dire consequences to both producers and consumers 
of our food supply.

      Sincerely,

Llewellyn Englehart.
  

Karen Englehart.

Buffalo Livestock Auction

Buffalo, Wyoming

To: Mr. Roger W. Fones
Chief of Transportation, Energy & Agriculture.

    I am urging you to please conduct a much more thorough 
investigation into the Cargill/Continental Grain sale before 
submitting a Final Judgment on the matter. Contrary to what the 
large multi national corporations tell you, putting the power into 
the hands of a few does not increase competition in the marketplace, 
but is having, and will only get worse, a devastating effect to the 
independent Ag producers in this country.
    I would also encourage you to please extend the public comment 
period for another sixty days to allow this matter to be more fully 
investigated and commented on.

      Thank you,

Jay Godley.
  

Epworth, IA 52045

    We believe: Every person has a right to the gifts of creations, 
especially to the necessities of life. Respect for the dignity of 
the human person also requires that each person has the right to 
free enterprise, the right to undertake the work that is their 
calling and the right to fair compensation for that work. This right 
is

[[Page 16019]]

comprised when too much control is concentrated to increase the 
power and wealth of a few. Food, as well as the facilities for 
production and distribution, should not be concentrated to the 
benefit of a few.
    We live on a centery farm. And our oldest boy, 20 years old, 
would love to go farming with us and someday take over the centery 
farm. But because of the hag prices we had to liquidate our farrow 
to finish hog operation. All we have left now is our grain. Letting 
Cargill and Continental gain together would take away another buyer 
and would not give the family farms a promising future. Help save 
the Family Farms.

Dan & Judy Gotto.
  


Epworth, IA 52045

    Dear Roger: I urge you to revisit the investigation of Cargill/
Continental sale and to extend the comment period for at least 60 
days.
    It is my feeling that the family farm will not survive if we 
have all these large companies going together and not having any 
competition.
    We believe: Every person has a right to the gifts of creations, 
especially to the necessities of life. Respect for the dignity of 
the human person also requires that each person has the right to 
free enterprise, the right to undertake the work that is their 
calling and the right to fair compensation for that work. This right 
is comprised when too much control is concentrated to increase the 
power and wealth of a few. Food, as well as the facilities for 
production and distribution, should not be concentrated to the 
benefit of a few.

      Yours truly;

Grace Gotto.
  

Bowling Green, NC 63334

    To Roger W. Fones: For the Justice Department's stand in siding 
with the multinational grain Cartel System, today's AG markets have 
totally stolen from independent family farmers. I believe this to be 
the most daring issue to ever be suffered by the Family Farmers and 
Rural Economics, Consumer and Taxpayer Mergers are the stealing of 
open markets, and this action now has the Seal of Approval from many 
Federal Agencies to hold accountable.
    These agencies have failed in their selected duties to perform 
on behalf of the Public to the Common Welfare and Protection of all 
United States Citizens.


George Grover.
  

Okolona, MS 38860
October 13, 1999.
Roger W. Fones,
Chief, Transportation Energy & Agriculture Section, Antitrust 
Division, U.S. Department of Justice, 325 Seventh Street, NW, Suite 
500, Washington, DC 20530.

    Dear Mr. Fones: Please stop the Cargill-Continental Grain sale. 
It would further impact grain prices and farm income in my community 
and in the U.S. in general. Please extend the comment deadline for 
another sixty days.
    This sales would be extremely detrimental to the U.S. family 
farmers. Our farm has operated for over 50 years, and is really 
feeling the effects lately. It was very obvious that somebody, the 
middleman, made money during the hog crisis. The farmer was paid 
very little for the hogs, but the prices in the supermarkets never 
went down.
    Thank you for your time in considering this.

      Sincerely,

Bob Gregory.
  

Okolona,, MS 38860

Cresco, IA 52136
October 6, 1999.
Roger W. Fones,
Chief, Transportation, Energy & Agriculture Section, Antitrust 
Division, U.S. Department of Justice, 321 Seventh Street, Suite 500, 
Washington, DC 20530.

    Roger W. Fones: I am an Iowa resident concerned about the 
impending takeover of the Continental Grain facilities by the 
Cargill Company. With this merger, the ability of the Cargill 
Company to price control and decrease the markets available to 
farmers will not only effect the farmers but every person in the 
United States who buys food. With Cargill Compnay having such a 
large monopoly they will be able to overwhelmingly control the U.S. 
grain trade. I urge you to rethink your investigation of the 
Cargill/Continental sale.
    The antitrust laws do not seem to include farming and farm 
products; I think it is time for that to be reevaluated in the light 
of this impending merger.
    Thank you for your time and consideration.


Mary Hargrafen.
  

Cresco, IA 52136
October 6, 1999.
Judge Gladys Kessler,
U.S. District Court for the District of Columbia, 333 Constitution 
Ave., NW, Washington, DC 20010.

    Judge Gladys Kessler: I am an Iowa resident concerned about the 
impending takeover of the Continental Grain facilities by the 
Cargill Company. With this merger, the ability of the Cargill 
Company to price control and decrease the markets available to 
farmers will not only effect the farmers but every person in the 
United States who buys food. With Cargill Compnay having such a 
large monopoly they will be able to overwhelmingly control the U.S. 
grain trade. I urge you to rethink your investigation of the 
Cargill/Continental sale and extend the comment period for a longer 
period so that more people can comment.
    Thank you for your time and consideration.


Mary Hargrafen.
  

Callicrate Feedyard

P.O. Box 748, St. Francis, KS 67756

October 11, 1999.
Mr. Roger W. Fones
Chief, Transportation, Energy & Agriculture Section, Antitrust 
Division, U.S. Department of Justice, 325 Seventh Street, N.W., 
Suite 500, Washington, DC 20503.

    Dear Mr. Fones: Mergers and concentration are out of control. 
Please stop the Cargill-Continental Merger as it will further 
deteriorate grain prices and farm income in my community and in all 
of the rural communities in the U.S.
    Companies like Cargill, ConAgra, ADM, Farmland and IBP are 
eliminating our safe food system and bankrupting us. Our small towns 
and communities are being devastated by their low fixed commodity 
prices.
    Please enforce antitrust laws and help the people of this 
nation.

      Sincerely,

Vernon E. Heim,
Manager.

The Organization for Competitive Markets (OCM)

P.O. Box 540061, Omaha, NE 68154-0061

September 16, 1999.
Mr. Roger W. Fones
Chief, Transportation, Energy & Agriculture Section, Antitrust 
Division, U.S. Department of Justice, 325 Seventh Street, N.W., 
Suite 500, Washington, DC 20503.
Re: United States of America v. Cargill, Inc. and Continental Grain 
Company

    Dear Mr. Fones: This letter concerns important considerations 
that may have been over looked by the Department of Justice during 
its review of the proposed merger of Cargill and Continental Grain.
    On November 30, 1998, former Congressman Neal Smith of Iowa sent 
a detailed letter (copy enclosed) to Attorney General Janet Reno 
emphasizing the importance of looking at the futures trading 
positions of the two companies in order to understand the impact of 
the proposed merger on the price of grains and soybeans which are 
determined in the futures markets (see John W. Helmuth, Grain 
Pricing, Commodity Futures Trading Commission (CFTC), Economic 
Bulletin Number 1, September 1977.)
    While I understand individual company information cannot be made 
public, the Department of Justice has given no public indication 
that you have performed any of the essential analysis called for in 
Mr. Smith's letter. The DOJ cannot claim to have adequately 
investigated the impacts of the merger without analyzing the 
fundamental elements called for by Mr. Smith.
    The judge reviewing this matter cannot make an informed decision 
without this fundamental information.

      Sincerely,

John W. Helmuth, Ph.D,
Agricultural Economist, Member of the Board, OCM.

November 30, 1998.
Attorney General Janet Reno
Main Justice Building, Room 5111, 10th and Constitution Avenue, 
Washington, DC 20530.

Re: Cargill Buyout of Continental Grain

    Dear Attorney General Reno: Please be advised that, while I am 
an agricultural producer like millions of others, I do not represent 
any of the parties on either side

[[Page 16020]]

directly involved in the subject matter of this letter, but am 
sending this letter because of my long-time interest in 
international grain marketing during the more than 30 years in 
Congress during which I authored the CFTC Act and other legislation 
dealing with grain exports.
    The recent announcement of Cargill's plan to buy the grain 
operations of Continental is subject to federal government approval 
pending antitrust review. I believe the outcome of that review will 
have far reaching effects on US and international grain markets for 
decades to come. The size of the two companies (measured by market 
share) is of obvious importance to these considerations, especially 
since there are so few international grain trading companies. But 
there are other equally important considerations that should be 
taken into account by any comprehensive, objective review. These are 
discussed below.

The Importance of Information in World Grain Markets

    Detailed, accurate, daily information on literally hundreds of 
variables impacting the worldwide supply and demand of grain is 
essential for any company engaged in grain marketing. There are two 
sources of such information: public and private.
    Public information is generally gathered and disseminated by 
governments around the world. The accuracy of such information 
varies across countries. US, Canadian, and European information 
generally set the standard for timely accuracy. By definition, 
public information is available to anyone and has as one of its 
goals to provide ``a level playing field'' for anyone buying and 
selling grain.
    Private information is gathered by companies and/or individuals 
and is usually not disseminated to others, or is disseminated 
selectively to the advantage of the ``owner'' of the information. 
Arguably some of the most valuable private information involves 
details of major transactions engaged in by grain trading companies. 
The larger the company and the larger the transaction, the more 
valuable is the ``inside'' information.
    For example, if the largest firm in the industry makes a large 
sale of US wheat for export, public knowledge of such a sale is 
likely to result in higher US (and World) wheat prices. It is very 
much in the exporting firm's best interest to buy the US wheat (and 
possibly large numbers of US wheat futures contracts) before 
knowledge of the export sale becomes public, and before wheat prices 
increase. Such transactions, based upon inside knowledge are not 
prohibited in cash or futures markets for agricultural commodities, 
as they are in the Securities markets.
    Placed in perspective, large grain trading companies have access 
to the same public information everyone else has, plus they have 
knowledge of their own transactions, and information gathered by 
their worldwide offices and subsidiaries, and information gathered 
by their privately owned reconnaissance satellites. Thus, while the 
playing field may be level with regard to public information, and US 
farmers may voluntarily give away valuable supply information about 
their crops for USDA crop surveys out of a sense of national duty, 
private companies are making daily trading decisions based on 
jealously guarded private (mostly demand) information.
    Given this fact, combining the number one and number two 
companies in the grain marketing industry not only aggregates their 
physical facilities, it also aggregates their inside information 
gathering capabilities and increases at least proportionately their 
information advantage in the US and World grain markets.

Number of Buyers, Price Competition

    Price competition exists, if and only if, a market is 
characterized by a large number of buyers and sellers. ``Large 
number'' is not defined by economists. However, most economists 
would agree it is probably greater than two.
    With respect to the market for farmers' grain at the local 
level, the number of buyers appears to be as low as one or two. To 
my knowledge, the federal government has not documented the number 
of grain buyers since the mid-1970's. In any event, when a local 
market currently has two buyers which happen to be Cargill and 
Continental, there will be only one buyer if the companies merge.
    However, it should be understood that the local impact on grain 
prices will be mostly confined to what is called ``the basis'' which 
is the nearby futures price adjusted to reflect local conditions. 
The major price impact, in dollars and cents per bushel, is likely 
to occur in the grain futures markets.

The Number of Entities Making Economic Decisions

    Fundamental to consideration of the Cargill acquisition of 
Continental Grain is to weigh the impact on economic decision 
making. Over fifty years ago Noble Laureate Frederick von Hayek 
elucidated the core strength and flexibility of market capitalism as 
being the making of economic decisions by many relatively small 
resource owners, who are close to the economic circumstances of time 
and place. Such market structure results in the most efficient use 
of resources and competitive markets. Hayek clearly pointed out that 
the concentration of economic decisionmaking in a relatively small 
number of individuals, regardless of whether those individuals are 
government bureaucrats as in the former Soviet Union or corporate 
executive in large companies, the result is the inefficient use of 
resources and non-competitive markets.
    If Cargill acquires Continental, economic decision making 
clearly will become more concentrated and the efficiency of 
capitalistic grain markets is very likely to decline.

A Level Playing Field: Grain Markets Compared to Securities Markets

    Federal regulations affect grain markets based upon the 
authority, inter alia, of the Commodity Exchange Act and the 
Commodity Futures Trading Commission Act. Federal regulations affect 
securities markets based upon the authority of the Securities 
Exchange Act. While these laws contain equally clear and strong 
language with respect to fraudulent activities, regulations 
promulgated by enforcement agencies are markedly different in the 
grain (futures) markets and the securities markets.
    The table below highlights the difference in federal enforcement 
of anti-fraudulent regulations between the grain futures markets and 
the securities markets.

                Comparison of Anti-Fraudulent Regulations
------------------------------------------------------------------------
                                         Securities      Grain  futures
                                          markets            markets
------------------------------------------------------------------------
Insider trading prohibited.........  yes..............  no.
Short selling prohibited unless      yes..............  no.
 last price change was an up-tick.
Short selling limited to actual      yes..............  no.
 stock certificates borrowed from
 owner.
------------------------------------------------------------------------

    International grain companies with overseas offices also have a 
way to avoid the speculative limits applying to local grain 
elevators and producers. Despite efforts, which have been strongly 
opposed by those who benefit, this loop hole has not been closed. In 
one instance, twice as much grain was covered in the futures market 
as the customer took delivery of, and before the public was aware of 
the sale, and the balance was then sold at a big profit after the 
public overreacted to the exaggereated report.
    In considering any merger in an area so involved with 
international trade affecting the most local of U.S. businesses, and 
such a history, great caution should be observed.
    The American public and American farmers in particular, are 
entitled to an answer to the question: ``Why are the playing fields 
different?''
    If the two largest U.S. securities firms were proposing a 
merger, federal authorities would undoubtedly consider the impact on 
securities markets. No less is necessary regarding the Cargill-
Continental merger and its potential impact on grain futures 
markets.

Consider the Impact on Other Agricultural Markets

    Finally, an astute observe reported that Continental is the 
largest cattle feeder in the U.S. (an industry that has been rapidly 
concentrating over the last two decades) and that public statements 
by Continental officials indicate a company objective of expanding 
its cattle operations. Such an objective could be realized with the 
proceeds of the sale of Continental's grain operations.
    While considering the grain market implications, federal 
officials should also consider the possible impacts on other 
agricultural markets such as livestock. Such impacts could be 
substantial and far reaching.

   Sincerely,

Neal Smith,
Former Member of Congress from Iowa.

Minnetonka, MN
October 8, 1999.
Roger W. Fones
 Chief, Transportation, Energy & Agriculture

[[Page 16021]]

Section, Antitrust Division, United States Department of Justice, 
325 Seventh Street, N.W., Suite 500, Washington, DC 20530.

    Dear Mr. Fones: I have been following with great interest the 
Cargill-Continental merger. I work in an office with many policy 
analysts and they understand in a more technical way what is going 
on. I do the administrative work and have never really been 
interested in technical jargon except to file it. But I am very 
interested in the lives of people. No longer should people's lives 
be caught up in the technical jargon but it is time to seriously 
take a look at the holocaust happening within the rural communities 
of our nation. It is a slow demise of the family farmer and if you 
ask the farmer they are slowly losing hope for a culture that made 
this country great.
    I also worked at Cargill many years ago, I am aware of the hug 
offices, the money that they have accrued on a personal level is 
incredible and that money was made off the very product that our 
family farms produced for you and I to eat. It is a product that we 
use everyday of our lives in some way or other and the farmers 
worked hard everyday of their lives to bring it to us. They were not 
looking for ways to make more money to satisfy their stockholders, 
they did not have an insatiable need for more things. What they did 
was take their land, put the seed into the ground tend to the crops, 
harvest it and then turned around and sold it to people like Cargill 
and Continental. I was always amazed when I worked at Cargill the 
amounts of product that were shipped from ordinary farmers and the 
amounts of money they made on trading and selling it. I didn't 
understand at that time nor was I very interested but today as I 
watch and listen to farmers story my heart is breaking for those 
people you are not listening to.
    I don't want to be a part of our country's holocaust when it 
comes to our farmers. I do know that by letter in the Cargill 
Continental merger happen you are saying to the farmers you are not 
very important but money is and the bottom line is money not people. 
How can I say that? Because it is the message I'm hearing loud and 
clear from you. Whitney McMillan, Cargill McMillan, and the other 
McMillan's have more money that I or most of our farmers will ever 
dream of. Who do you think they made that money from? How much is 
enough? And do we have to lose a whole culture so they will make 
enough to satisfy their insatiable need for more money? Look at who 
they say they are competing with how many companies is it really? 
Some of the competition comes from within. My husband is in the 
wallcoverings business competition is there all the time for him but 
he doesn't go out and buy all the business out so he can make more 
money. We are satisfied with the money we make, we work hard for it 
but it allow us to live with integrity.
    You can listen to all the technical jargon, you can look at all 
the numbers but in the end we are talking about people's lives here. 
Our farmers need us to stand with them. They need the very 
government that they have helped support through hard work and toil 
to stop and listen very closely to do the right thing that will make 
the most money. Hitler was working on economic health when he came 
into power and look what happened. Please stop this merger, let the 
farmers be heard throughout the land, help them to find solutions 
don't put the nails in the coffin of rural America. These people are 
your neighbors, your friends, your community, remember it is people 
you are dealing with here not just numbers.
    Thank you.

      Sincerely,

Kathy Hiltsley.
  


Tulsa, OK 74133
10 October 1999.
Mr. Roger W. Fones,
Chief, Transportation, Energy and Agriculture Section, Anti-Trust 
Division, U.S. Department of Justice, 325 7th Street, NW, Suite 500, 
Washington, DC 20530.

FAX: 202/307-2784

    Dear Mr. Fones: I am writing this to request that you conduct 
further investigation of the Cargill-Continental Grain sale and that 
you extend the comment deadline for another sixty days.
    Are you aware of what the creation of a larger monopoly will do, 
not only to grain farmers in this country, but also to all 
consumers?
    Monopolies always create higher prices for the consuming public. 
They create even lower prices for those who must sell their 
commodities to the monopolies. Grain prices are already below break-
even.
    Farmers are going broke in our state at an alarming rate. Across 
the U.S., farm income is down by 70%. Depressed prices are ruining 
not only farmers but all small-town businesses. I urge you to 
conduct a more thorough investigation into the Cargill/Continental 
Sale before submitting a final judgment on this.
    Please give my request your serious consideration.

      Sincerely,

Barbara Hook.
  

Madison, MN 56256
October 7, 1999.
Mr. Roger W. Fones
U.S. Dept. of Justice, 325 Seventh St. NW, Suite 500, Washington, DC 
20530.

    Dear Mr. Fones: I am writing to you because of my concern abut 
the proposed merger between two grain handling giants. I am a pastor 
of a Catholic parish of about 600 people in western Minnesota. Our 
economy in Madison is very much tied to agriculture. When farm 
commodities are depressed, it does not simply mean hard times. 
Businesses fold and do not reopen. More and more of our population 
flees to other towns and areas. Of course there are other 
contributing factors, but there is no denying that an unhealthy 
agricultural sector spells rapid decline for our town and region.
    Ten years ago, it was well known that 90% of the world's grain 
exports were done through just five corporations. Cargill and 
Contentntal are two of the five. There is already too much 
concentration in this area of agriculture. This merger would mean 
even less competition in the marketplace. It would be great for the 
few corporations left, but it would certainly be detrimental to 
small and medium sized farms that are less able to hang on to their 
grain until markets improve. Even if one believes that bigger farms 
are always better, there is considerable danger in allowing such 
large corporations to merge when there is already very limited 
competition. Add to this the fact that we are dealing with food, and 
the danger of monopolizing the market becomes even more grave.
    For all of these reasons, I strongly urge you and your 
department to disallow this merger between Cargill and Continental. 
Thank you for your consideration.
      Sincerely,

Rev. Jeff Horejsi.
  

Roger W. Fones
Chief, Transportation, Energy and Agriculture Section, Antitrust 
Division, U.S. Dept. of Justice, 325 7th Street NW, #500, 
Washington, DC 20530.

    Please stop the Cargill-Continental Grain Sale because it will 
hurt the small farmers in my area and the U.S. It will also 
eventually raise food prices. Please extend the comment period for 
60 days.


Reena Kazmann.
  

October 07, 1999.
Roger W. Fones,
Chief, of Transportation, Energy & Agriculture Section, Antitrust, 
Division, 325 Seventh St. NW, Suite 500, Washington, DC 20530.

    Dear Sir: I am writing to concerning the Cargill-Continental 
merger. I wanted to let you know that the market for our grain on 
the farm is already highly concentrated. The Cargill-Continental 
Merger would spell doom for the independent farms we have left on 
the prairie. Small farmers are struggling the way it is. Please 
consider this before you vote.

      Sincerely,


Robin Kleven.
  


Corporate Agribusiness Research Project

P.O. Box 2201, Everett, Washington 98203-0201

October 8, 1999.
Roger W. Fones
Chief, Transportation, Energy & Agriculture Section, Antitrust 
Division, U.S. Department of Justice, 325 Seventh Street N.W., Suite 
500, Washington, DC 20530.

    Dear Mr. Fones: In accordance with the ``Antitrust Procedures 
and Penalties Act'' (APPA) of the U.S. Code I am enclosing a recent 
issue of The Agribusiness Examiner,'' a weekly e-mail newsletter 
which I edit and publish devoted to monitoring corporate 
agribusiness from a public interest perspective.
    I am sending this copy to you as my way of making a ``public 
comment'' regarding the Justice Department's ``Final Judgment'' 
regarding the sale of Continental Grain's grain merchandising 
division to Cargill. I will look forward to the Department's 
comments in the Federal Register regarding the various issues raised 
in this issue of my newsletter.

[[Page 16022]]

    I should also note that this newsletter is distributed on a 
weekly basis to nearly 850 people through the U.S. and the rest of 
the world, including many family farmers, farm organizations and 
public interest food advocates.
    Thank you for your time and consideration of the enclosed.

      Sincerely,


A.V. Krebs,
Director.

Subject: The Agribusiness Examiner #50
Date: Fri. 08 Oct 1999 01:15:46-0700
From: ``Albert V. Krebs'' ([email protected])
To: [email protected]

SPECIAL EDITION

The Agribusiness Examiner

Monitoring Corporate Agribusiness From a Public Interest Perspective

Issue #50 October 8, 1999

A.V. Krebs, Editor/Publisher.

Urgent Appeal: Effort to Block Cargill/Continental Sale--Public 
Comment Deadline at Hand

    October 12, 1999 remains the deadline for public comment on the 
U.S. Department of Justice's Anti-Trust Division's ``Final 
Judgment'' relative to the sale by Continental Grain of its grain 
merchandising division to Cargill, the world's largest grain trader.
    After characterizing what it publicly called an almost year long 
``investigation'' of the sale the Department of Justice (DofJ) in 
fact filed a formal ``Complaint'' with the U.S. District Court for 
the District of Columbia. However, the DofJ totally neutralized its 
``Complaint'' by filing it on the same day (July 8, 1999) and at the 
same time that it furtively filed a consented ``Final Judgment,'' 
agreed to by all parties. While the DofJ's ``Final Judgment'' now 
awaits the approval of presiding U.S. District Court Judge Gladys 
Kessler, the public comment period regarding the Department's 
decision remains open until October 12.
    In their ``Complaint'' the DofJ formally charged that Cargill's 
purchase would ``substantially lessen competition for purchases of 
corn, soybeans, and wheat in each of the relevant geographic 
markets, enabling it unilaterally to depress the prices paid to 
farmers. The proposed transaction will also make it more likely that 
the few remaining grain trading companies that purchase corn, 
soybeans, and wheat in these markets will engage in anticompetitive 
coordination to depress farm prices.''

Commentary

    Liberals and progressives and those individuals and 
organizations that seemingly care so deeply about the plight of the 
nation's family farmers may pride themselves on being on the cutting 
edge of today's economic and social issues such as genetic 
engineering and the upcoming World Trade Organization meeting in 
Seattle, Washington.
    At the moment, however, agrarian populists and thousands of 
family farmers throughout the U.S. see such issues, as important as 
they may be for the future of agriculture, merely as additional logs 
on that fire that is intended to smoke them out of the business of 
farming.
    Meanwhile, the crucial issue that is today deeply distressing 
family farmers to the point of near hopelessness is the rapid 
corporate concentration within agriculture as exemplified by the 
recent announced purchases by Cargill of Continental Grain's 
merchandising business and Smithfield Foods buying up of Murphy 
Family Farms and Tyson Food's Pork Group.
    While Dan ``Of the Grain Trade, By the Grain Trade and For the 
Grain Trade'' Glickman may be ``very pleased that the Department of 
Justice has taken * * * steps to protect American farmers from the 
potential adverse effects'' of the Cargill/Continental sale by its 
recent ``Final Judgment'' and divestiture order, farmers from 
Stockton, California to Hampton Roads, Virginia see the 
consolidation of two of the world's largest grain traders as nothing 
but more economic and social adversity for them and their families.
    Thus, in an attempt to force the Department of Justice anti-
trust division to conduct a more thorough investigation of the 
Cargill/Continental sale, efforts are currently underway to 
forestall the Department from submitting its ``Final Judgment'' for 
the approval to presiding U.S. District Court Judge Gladys Kessler. 
This ``Special Issue'' of The Agribusiness Examiner is part of that 
effort.
    For once, not simply acting as a mere mouthpiece for corporate 
agribusiness, but actually serving as ``a voice for American 
Agriculture,'' American Farm Bureau President Dean Kleckner, has 
rightfully observed that ``the time has come for the Justice 
Department to have someone with agricultural expertise to oversee 
such concentration issues. Agriculture is a unique industry. It 
requires someone with the experience and background to ensure anti-
trust laws are not being violated and that opportunities for all 
farmers are protected''
    The hour is late, the deadline for public comment on the 
Cargill/Continental ``Final Judgment'' is Tuesday, October 12.
    No matter what one's degree of involvement in various and 
related public interest issues might be or what political or 
ideological persuasion one might be if they care about who grows 
their food, who produces and manufacturers it, its availability, its 
safety, its cost and the future of family farming agriculture the 
effort to block this sale is one that deserves their immediate and 
highest priority.
    The ``Antitrust Procedures and Penalties Act'' (APPA) of the 
U.S. Code provides that any person may submit to the United States 
written comments regarding the proposed ``Final Judgment.'' Any 
person who wishes to comment should do so by October 12. The 
comments and the response of the United States will be filed with 
the Court and published in the Federal Register.
    Written comments should be submitted to: Roger W. Fones, Chief, 
Transportation, Energy & Agriculture Section, Antitrust Division, 
United States Department of Justice, 325 Seventh Street, NW, Suite 
500, Washington, DC 20530.
    Legal precedent, according to the DofJ, requires that ``[t]he 
balancing of competing social and political interests affected by a 
proposed antitrust consent decree must be left, in the first 
instance, to the discretion of the Attorney General. The court's 
role in protecting the public interest is one of insuring that the 
government has not breached its duty to the public in consenting to 
the decree.
    ``The court is required to determine not whether a particular 
decree is the one that will best serve society, but whether the 
settlement is `within the reaches of the public interest.' [A] 
proposed decree must be approved even if it falls short of the 
remedy the court the would impose on its own, as long as it falls 
within the range of acceptability or is `within the reaches of the 
public interest.'.''
    Letters specifically demonstrating and/or documenting the impact 
of Cargill's monopoly of the grain trade and how the Continental 
purchase will affect that situation on one's own family farm 
operation or upon the rural community in which one lives will be 
most valuable. Copies of such letters should also be sent to the 
letter writer's state attorney general's office urging that office 
at the same time to utilize their good offices in not only calling 
upon the U.S. Department of Justice to revisit its ``investigation'' 
of the Cargill/Continental sale, but requesting that the deadline 
for comment be extended another sixty days to December 12.
    Whether or not Judge Kessler concludes that the consent decree 
is ``within the reaches of public interest'' the corporate 
audaciousness of Cargill in attempting to summarily own this 
nation's grain trade with its purchase of Continental's grain assets 
is breathtaking. One need only look at the facts brought to light in 
the DofJ's own ``Complaint'' to see such covertness.

OCM'S Fred Stokes: ``A Dark Day for Agriculture''

    ``If the Cargill merger goes through, it is a dark day for 
agriculture,'' is the way Fred Stokes, a Mississippi cattlemen and 
recently elected President of the Organization for Competitive 
Markets (OCM) describes the Cargill/Continental sale. ``The loss of 
Continental Grain as a competitor while creating a more powerful 
Cargill will drive farmers' share of the retail dollar even lower. 
Continental Grain will then plow the new money into further 
consolidating the livestock industry.''
    Alone among farm organizations who have denounced the Department 
of Justice's ``Final Judgment'' decree the Organization for 
Competitive Markets is a non-profit, non-partisan organization of 
farmers, ranchers, academics and attorneys which provides 
information to the public about the importance of true competition 
in the agricultural marketplace.
    Keith Mudd, a Missouri farmer and OCM board member, adds, 
``Farmers used to have several choices of elevators to market their 
grain. Mergers have reduced the number of buyers to two in many 
geographic areas. If the Cargill merger goes through, many farmers 
will have only one buyer. I fail to

[[Page 16023]]

understand how the Department of Justice can view this merger as 
promoting competition.''
    ``The immediate effects of the merger will be less market 
choices for farmers, more control over exports and a heightened 
ability by Cargill to unilaterally affect the futures markets,'' 
stated Dr. John Helmuth, agricultural economist and OCM board 
member. ``The subsequent effects will be pressure for other grain 
merchandisers and their customers to merge in order to equal the 
market power of Cargill.''
    OCM's Jon Lauck and other Midwest farm activists have been 
meeting in recent weeks with both Republican and Democrat state 
attorney generals, in efforts to line up support for a lawsuit to 
block the sale.
    ``Not too long ago,'' Lauck recently told The Corporate Crime 
Reporter,'' antitrust officials would have looked at something like 
this and decided--this is obviously too large, these are two 
dominant players. We are never going to allow something like this to 
go through.
    ``Given the DOJ's concerns about the anticompetitive 
consequences of the merger,'' Lauck stresses, ``it is odd that no 
effort is made to justify its approval of the merger. The fears of 
antitcompetitive behavior set forth in the `Complaint' are not 
counter-balanced with a recognition of post-merger efficiencies, for 
example. With no apparent benefit to the merger and significant 
concerns expressed by many parties about its approval, the natural 
reaction would be to halt the merger. This response is further 
justified by the obvious difficulties that accompany the reversal of 
market concentration once it has become an economic fact.''
    One argument that defenders of the recent wave of corporate 
mergers within agribusiness have sought to make is that such 
mergers, specifically within the grain trade, are necessary so as 
enable U.S. companies to compete with foreign ``parastatal 
monopolies.''
    Recently, the corporate agribusiness dominated International 
Policy Council on Agriculture, Food and Trade (IPC) issued a call 
for the elimination of parastatal monopolies in the next round of 
world trade talks. Although the Australian and Canadian Wheat Boards 
were not mentioned by name the IPC report bemoaned the fact that the 
monopoly power of such agricultural state-trading enterprises 
(STE's) ``have the ability to distort domestic markets and 
international trade flows,'' even if they are not directly supported 
by government payments.
    ``As long as they enjoy exclusive powers or advantages not 
shared by their competitors, monopolies will not behave like ``at 
risk'' enterprises,'' the IPC said. ``To end the resulting market 
distortions, the monopolies themselves should be eliminated, 
preferably by the end of the implementation period of the next 
round.''
    But, as Dr. Helmuth has noted, ``when fewer and fewer 
individuals make more and more of the economic decisions, whether 
those individuals are in government or big business, the results is 
anti-competitive, inefficient and harmful to society as a whole; 
when more and more individuals make more and more of the economic 
decisions, the result is more competitive and more efficient and 
beneficial to society as a whole.
    ``There is even greater irony in that the principal advocates of 
centralized economic planning--the former Soviet Union and Eastern 
European countries--are abandoning it as an economic failure, at the 
very time American industries are becoming more and more centrally 
planned by those few firms with greater and greater economic power 
resulting from ever increasing industry concentration,'' he adds.

Cargill: To Become More Powerful and Sophisticated Firm ``Capable 
of Strategic, Cooperative and Anti-Competitive Behavior''

    In a recent letter to Roger W. Fones, Chief of the 
Transportation, Energy & Agriculture Section of the Antitrust 
Division, United States Department of Justice, Organization for 
Competitive Markets Jon Lauck wrote that Cargill's acquisition of 
Continental Grain Company ``would unify the second and third largest 
grain traders in North America, which export 40% of American 
agricultural commodities.''
    Specifically, Lauck, the author of a law review article entitled 
``Toward an Agrarian Antitrust,'' 75 North Dakota Law Review 
(August/September 1999, objected ``to the analysis used by the 
Department of Justice when reviewing the acquisition. DofJ's 
analysis: (1) fails to consider the wider concentration in 
agricultural markets beyond grain buying; (2) fails to consider the 
continuing potential for anticompetitive behavior in the post-merger 
market; (3) fails to show that the divested remnants of Continental 
will be a competitive force absent a large network of elevators 
which buy grain; (4) fails to consider the nature of the grain 
selling market; (5) fails to consider the economic disorganization 
of farmers which can be exploited by powerful buyers; (6) fails to 
consider information disparities in agricultural markets; (7) fails 
to explain the benefits of the merger; (8) and fails to consider a 
range of statutes that Congress intended courts to consider when 
making decisions about agricultural markets.
    ``In recent years,'' he continues, ``agricultural processing 
markets have become highly concentrated. From a top-five 
concentration ratio of 24% in the early 1980s, for example, the 
beef-packing sector's five-firm concentration ratio has grown to 85 
percent. Similar statistics apply to several other sectors of the 
agricultural processing economy.
    ``The DofJ's analysis did not consider the wider context of 
consolidation in the agricultural system and instead focused on the 
grain buying activities of Cargill and Continental. Growing 
concentration in agricultural markets should have been considered by 
the DofJ given the continuing consolidation of agribusiness firms,'' 
he adds.
    ``It was the growing power of agribusiness firms that triggered 
concerns among farmers and inspired the passage of the Sherman Act. 
And it was continuing concentration in agricultural markets, 
particularly through merger, that prompted passage of additional 
antitrust statutes such as the Clayton Act. The importance of the 
antitrust laws to farmers is explained by the difficulties inherent 
in farmers bargaining with large and powerful agribusiness buyers. 
Legislators and courts have fully recognized these concerns in 
statutes and in cases, respectively, but the DOJ's merger analysis 
failed to weigh these considerations.''
    Lauck's letter goes on to warn the Department of Justice that it 
``must consider more that the grain buying operations of Cargill. 
The acquisition of Continental's seventy elevators will enhance the 
economic power of Cargill as a general matter. Such a result 
concerns farmers because Cargill's assets and economic power can be 
deployed across a range of agricultural sectors. For example, 
Cargill stands out as a top-four firm in beef packing, cattle 
feedlots (where Continental is the largest), pork packing, broiler 
production, turkey production, animal feed plants, grain elevator 
capacity, flour milling, dry corn milling, wet corn milling, soybean 
crushing, and ethanol production.
    ``Such a dominant position across many agricultural markets will 
allow Cargill to transfer resources between sectors according to the 
economic conditions that are prevailing at a given time. The ability 
to transfer assets will allow Cargill to maintain its dominant 
status in all of these markets irrespective of its competitive 
prowess. Unlike farmers, who are forced into bankruptcy after a few 
bad seasons, Cargill will maintain its dominant status over time 
regardless of economic performance over the short-term. With 
Continental's assets, Cargill will become an even more powerful and 
`sophisticated' firm, even more capable of strategic, cooperative, 
and anti-competitive behavior.
    ``The DofJ argues in its complaint that within particular draw 
areas very few firms buy grain. It argues that if Continental's 
operations where absorbed `Cargill would be in a position 
unilaterally, or in coordinated interaction with the few remaining 
competitors, to depress prices paid to producers and other suppliers 
because transportation costs would preclude them from selling to 
purchasers outside the captive draw areas in sufficient quantities 
to prevent the price decrease.' Divestitures in a few of these 
markets as proposed by the DofJ does not address this problem. Even 
with the divestitures, grain buying would remain heavily 
concentrated and susceptive to collusive and cooperative activity,'' 
Lauck's letter warns.
    ``Furthermore, it is unclear how Continental will remain an 
effective competitor with Cargill after selling almost all of its 
elevator capacity. The few facilities that will not be acquired by 
Cargill hardly constitute a legitimate competitive threat. As the 
DofJ emphasized in its complaint, grain buying involves a large-
scale network of facilities. The few remaining Continental 
facilities, stripped of their internal networks which provide them 
with competitive flexibility and information about grain flows, will 
be powerless in comparison with Cargill, with its $51 billion in 
annual revenues and 81,000 employees in 60 different countries.
    ``Continental's decision to sell off its grain buying operation 
may also indicate that it no longer considers grain buying a 
priority. In

[[Page 16024]]

short, there is no assurance that the remaining facilities will even 
compete in the markets that concerned the DofJ. Given the need for a 
network of elevators to compete in the grain buying business, it is 
also highly unlikely that any new firms will enter the market to 
challenge Cargill. The DofJ openly concedes in its complaint that it 
is `unlikely that Cargill's exercise of market power will be 
prevented by new entry, by farmers and other suppliers transporting 
their products to more distant markets, or by any other 
countervailing competitive force'.''
    Lauck concludes his carefully documented 13-page letter to Fones 
by emphasizing that ``given the importance of this merger and the 
constraints on state action if the consent decree is approved, I 
respectfully request that the comment period for this merger be 
extended another sixty days to December 12th. Several parties have 
expressed interest in commenting on the merger and will not be able 
to do so by October 12th. In the interest of a fair hearing on this 
critical matter, I urge DofJ to support a lengthening of the comment 
period, as allowed under the Tunney Act. If the DofJ and the court 
do not see fit to extend the comment period, I urge the court to 
reject the proposed consent decree for failing to consider the 
factors set forth herein.''

Iowa State Study: Why Did Continental Sell? Why Did Cargill Become 
a Buyer?

    Prior to the Department of Justice's ``Final Judgment'' Iowa 
State Department of Economics professors Marvin Hayenga and Robert 
Wisner addressed the questions of why Continental sought to sell its 
grain merchandising division and why Cargill became such a willing 
buyer.
    The complete text of the Hayenga-Wisner paper can be viewed at: 
http://www.econ.iastate.edu/outreach/agriculture/marketing/hayenga.
    Professors Hayenga and Wisner note in their January, 1999 paper, 
``Cargill's Acquisition of Continental Grain's Grain Merchandising 
Business,'' that industry speculation was that Continental excelled 
in very large volume bulk export trading, and had not diversified 
enough into the value added processing to compete effectively in a 
market environment where export volumes have been sharply reduced in 
recent years.
    ``To compete effectively by restructuring their operations at 
this late date,'' they add, ``would require too much capital and too 
much risk. Continental's storage capacity declined significantly 
over the last ten years, while Cargill, ADM and Peavey [ConAgra] 
expanded. Their capital could be more productively employed in their 
other agricultural and financial businesses.''
    In seeking answers as to why Cargill expected the Continental 
purchase acquisition to contribute to its ability to compete 
effectively in a rapidly changing market environment the Iowa State 
study summarized that the acquisition will contribute to ``more 
effective knowledge acquisition and transfer from an expanded global 
presence and a broader base of grain origination facilities in the 
countries where grain is produced.
    ``The grain merchandising system is a high fixed cost system. 
Cargill hopes to compete more effectively and keep a large share of 
the Continental volume, capturing economies of scale by running more 
volume through without equivalent changes in the costs of managing 
their system. Further, Cargill expects that it will be more able to 
take costs out of the system, not just through fewer people, but by 
dedicating some facilities to specialized products and getting more 
efficiencies in operations (shorter barge turnaround times, longer 
runs in elevator handling, etc.).
    Hayenga and Wisner point out that Cargill's new joint venture 
with Monsanto to arrange production and to market value-added 
specialty grains and oilseeds for the feed and processing industries 
``will require greater capacity to handle segregated grain flows 
throughout the domestic and export marketing system. Continental has 
had a significant presence in the identity preserved grain market, 
with half its international feed customers converted to high oil 
corn.
    ``Cargill expects to better serve the producer by enhancing 
productivity and passing some of those cost savings on in the form 
of better prices to their suppliers and customers. They also plan 
offer many more price risk management alternatives and advice, 
financing, etc., to farmers,'' they add.
    The study goes no to add that ``the basic concern expressed by 
some farmers, politicians, and industry participants is that Cargill 
bought Continental to remove a significant competitor, particularly 
in the export market, and expand merchandising margins. The ability 
to `control' more facilities and larger volumes of grain and 
soybeans might adversely influence competition and the transparency 
and effectiveness of the price discovery process in the grain 
marketing system.''
    The two professors then ask a series of key questions: Will the 
merger result other merchandisers and processors having to conform 
to Cargill standards in grain merchandising? Will the merger result 
in exclusivity in marketing arrangements with Cargill such that 
firms that do business with Cargill are excluded from or penalized 
for doing business with other merchandisers? Will Cargill bundle 
products or terms into their merchandising arrangements, like 
requiring its buyers and suppliers to use Cargill transportation or 
Cargill risk management tools? Will Cargill control so much grain at 
various stages of the system that fewer negotiated prices and price 
reports are available to keep the price discovery system 
transparent?
    It is these questions that many farm critics feel that the 
Department of Justice's ``Final Judgment'' fails to answer.

``Captive Draw Areas'' and the HHI

    Although Cargill and Continental have from the outset sought to 
minimize the monopoly situation the purchase would have created 
within the grain trade the facts are that farmers typically sell 
their crops to rural grain elevator operators, many of which are 
owned by cooperatives and small companies. These elevators then 
either export the grain or resell it to flour mills and other food 
processors with much of it being sold to grain trading corporations 
such as Cargill, Continental and Archer Daniels Midland (ADM) and it 
is these companies that own and operate the larger grain elevators, 
rail links, terminals, barges and ships needed to move grain around 
the country and the world.
    The role of the grain trade in a nation that is constantly 
touted as being ``the world's breadbastket'' cannot be over 
emphasized as the respected University of Missouri rural sociologist 
William Heffernan points out, 75% of the world's food (based on dry 
weight) is grain based.
    In discussing the nation's grain network the DofJ in its 
``Complaint'' notes that in each instance, the geographic area from 
which a country elevator, river elevator, rail terminal, or port 
elevator receives grain is limited by transportation costs and is 
known as the ``draw area'' for that facility. Draw areas they 
conclude, expand and contract only slightly in response to normal 
economic fluctuations in crop supply, crop demand, and 
transportation costs.
    For many country elevators, river elevators, railroad terminals, 
and port elevators, draw are Cargill and Continental often operate 
facilities that have overlapping draw areas, and they therefore 
compete with one another for the purchase of wheat, corn, and 
soybeans from the same producers or other suppliers. In some areas 
within these overlapping draw areas, Cargill and Continental have 
been two of a small number of competing grain trading companies.
    ``Sometimes they are the best,'' DofJ observes, ``and 
occasionally the only realistic alternative purchasers of grain from 
producers and other suppliers. By acquiring Continental's facilities 
that purchase grain from these `captive draw areas,' Cargill would 
be in a position unilaterally, or in coordinated interaction with 
the few remaining competitors, to depress prices paid to producers 
and other suppliers because transportation costs would preclude them 
from selling to purchasers outside the captive draw areas in 
sufficient quantities to prevent the price decrease.''
    By way of evaluating concentration is these ``captive draw 
areas'' the Department of Justice uses a criteria based on the 
Herfindahl-Hirschman Index (HHI), a commonly accepted measure of 
market concentration. The HHI is calculated by squaring the market 
share of each firm competing in the market and then summing the 
resulting numbers.
    For example, for a market consisting of four firms with shares 
of 30, 30, 20, and 20 percent, the HHI is 2,600 (302 + 302 + 202 + 
202 = 2,600). The HHI takes into account the relative size and 
distribution of the firms in a market. It approaches zero when a 
market is occupied by a large number of firms of relatively equal 
size and reaches its maximum of 10,000 when a market is controlled 
by a single firm. The HHI increases both as the number of firms in 
the market decreases and as the disparity is size between those 
firms increases.
    Markets in which the HHI is between 1000 and 1800 are considered 
to be moderately concentrated, and markets in which the HHI is in 
excess of 1800 are considered to be highly concentrated. 
Transactions that

[[Page 16025]]

increase the HHI by more than 100 points in highly concentrated 
markets presumptively raise significant antitrust concerns under the 
Department of Justice and Federal Trade Commission 1992 Horizontal 
Merger Guidelines.
    In their ``Complaint'' the DofJ vividly shows that even prior to 
the purchase agreement Cargill and Continental were two of a very 
small number of grain trading companies competing to purchase grain 
in four key ``captive draw area'' including: the Pacific Northwest 
port range, which include western Minnesota, eastern North Dakota, 
and northeastern South Dakota; the Central California port range, 
which include the areas around Stockton, California, to West 
Sacramento, California; elevators in the Texas Gulf port range, 
which include portions of Texas and Louisiana; elevators along the 
Illinois river stretching from Morris, Illinois, to Chicago, 
Illinois, and on the Mississippi river in the vicinities of Dubuque, 
Iowa, and New Madrid/Caruthersville, Missouri, and the captive draw 
areas for rail terminals in the vicinities of Salina, Kansas, and 
Troy, Ohio.
    Each of those ``captive draw areas'' is already highly 
concentrated based on HHI figures. The potential combination of 
Cargill and Continental would have dramatically and substantially 
increased concentration in already highly concentrated grain 
purchasing markets.
    For example, in the Pacific Northwest port range markets for 
corn and soybean purchases are highly concentrated, with the top 
four port elevator operators accounting for 100% of all corn and 
soybean purchases in these markets as Cargill alone accounts for 
about 44% of all soybean purchases and 23% of all corn purchases. 
Continental, in a joint venture with Cenex Harvest States, accounts 
for about 50% of all soybean purchases and 30% of all corn purchases 
in the same port range.
    After the proposed acquisition, Cargill would have accounted for 
94% of Pacific Northwest soybean purchases and about 53% of Pacific 
Northwest corn purchases. The approximate post-merger HHIs for 
purchases of soybeans and corn in the Pacific Northwest port range 
would be about 8868 and 5004, with increases in the HHIs of 4400 and 
1364 points, respectively, resulting from this transaction.
    Likewise, the Central California port range market for wheat is 
highly concentrated, with Cargill and Continental accounting for 
virtually all wheat purchases in this market. The approximate post-
merger HHI for purchases of wheat in the Central California port 
range would be about 10,000, with an increase in the HHI of 7,888 
points resulting from this transaction.
    In the Texas Gulf port range markets for soybeans and wheat are 
also highly concentrated, with the top three purchasers accounting 
for 100% of all purchases of soybeans and the top four purchasers 
accounting for 79% of all purchases of wheat in these markets. 
Cargill accounts for about 16% of all soybean purchases and 25% of 
all wheat purchases in the Texas Gulf port range. Continental 
accounts for about 33% of all soybean purchases and 9% of all wheat 
purchases in the same port range.
    After the proposed acquisition, Cargill would have accounted for 
about 49% of Texas Gulf soybean purchases and about 34% of Texas 
Gulf wheat purchases. The approximate post-merger HHIs for purchases 
of soybeans and wheat in the Texas Gulf port range would be 5105 and 
2611, with increases in the HHIs of 1056 and 451 points, 
respectively, resulting from this transaction.
    Other geographic markets in which Cargill and Continental 
compete for purchase of corn, soybeans, and wheat are also highly 
concentrated. These markets include river elevator markets on the 
Illinois River and the Mississippi River, authorized delivery points 
on the Illinois River for corn and soybean futures contracts, and 
rail terminal markets in Kansas and Ohio. The proposed transaction 
would have increased the HHIs in each of these markets to over 
3,000.

Divestiture: Trade Collusion by Any Other Name?

    In its ``Final Judgment'' the Department of Justice not only 
directs Cargill to divest all of its property rights in the port of 
Seattle elevator, East Dubuque and Morris river elevator, but also 
mandates that Continental is ordered and directed to divest all of 
its property rights in the Lockport and Caruthersville river 
elevators, the Salina rail and Troy rail elevators, the Beaumont, 
Stockton and Chicago port elevator to an Acquirer acceptable to the 
United States in its sole discretion.
    When one totals the elevator capacities of those facilities that 
Cargill must relinquish and those Continental elevators which it is 
prohibited from operating some rather curious figures emerge.
    The total domestic storage capacity for Cargill and Continental 
in January of 1999 was 463 million bushels for Cargill and 169 
million bushels for Continental. This compares to 1981 figures of 
148 million bushels for Cargill and 110 million bushels for 
Continental. The total capacity of the Seattle port and Morris River 
elevators and one third of the Havana river elevator (see below) is 
some five million bushels while the storage capacity of the 
Lockport, Caruthersville, Salina and Troy rail elevators and the 
Beaumont and Stockton port elevators totals some 15 million bushels. 
If hypothetically one independent corporation should buy all these 
elevators its combined storage capacity would be but between three 
and four percent of Cargill's storage capacity and a similar 
percentage of ADM's total storage capacity.
    The DofJ directs that Cargill and Continental's assets shall be 
made to an Acquirer for whom it is demonstrated to the sole 
satisfaction of the United States that: (1) the purchase is for the 
purpose of using the Asset to compete effectively in the grain 
business, (2) the Acquirer has the managerial, operational, and 
financial capability to use the Asset to compete effectively in the 
grain business; and (3) none of the terms of any agreement between 
the Acquirer and defendant(s) give defendant(s) the ability 
unreasonably to raise the Acquirer's costs, to lower the Acquirer's 
efficiency, or otherwise to interfere in the ability or incentive of 
the Acquirer to compete effectively.
    Among the other terms of the ``Final Judgment`` Cargill shall 
not purchase, lease or acquire any interest in the Lockport river 
elevator, Caruthersville river elevator, Salina rail elevator, Troy 
rail elevator, Beaumont port elevator, Stockton port elevator or 
Chicago port elevator, or any interest in the river elevator at or 
near Birds Point, Missouri (in which Continental formerly owned a 
minority interest, and had a right of first refusal to purchase 
grain).
    Cargill was also directed to enter into a throughput agreement 
that makes one-third \1/3\ of the daily loading capacity at its 
river elevator located at or near Havana, Illinois, or one barge-
load per day, whichever is greater, to an independent grain company 
acceptable to the United States in its sole discretion (the ``Havana 
Throughput Agreement``). Daily loading capacity shall be the 
capacity registered with the CBOT.
    A ``Standard Throughput Agreement'' means an agreement that 
allows one grain company to move its grain through an elevator 
operated by another person, with unloading, storage, loading and 
ancillary services provided by the operator pursuant to terms, 
conditions and rates that are common in the grain industry.
    The independent grain company that obtains the throughput right 
from Cargill (the ``third party``) must be qualified under CBOT 
rules and regulations to make delivery of at least one barge-load of 
corn and soybeans per day for the settlement of CBOT corn and 
soybean futures contracts, and must agree to register that capacity 
at the Havana facility with the CBOT.
    The ``Havana Throughput Agreement`` shall allow the third party 
to use its share of the loading capacity at the Havana facility to 
transload grain from trucks onto barges for commercial purposes 
unrelated to futures contract deliveries, as well as to make 
deliveries under CBOT futures contracts. Cargill, however, is not 
obligated by the ``Final Judgment'' to provide storage services to 
the third party in excess of the storage services required to 
accommodate the transloading of grain shipments from trucks to 
barges. Load to barge loading, may not exceed the load-out fees.

Cargill: Getting the ``86'' in Seattle?

    In the Department of Justice's original ``Complaint,'' the anti-
trust division asserted that competition for the purchase of grain 
and soybeans from farmers and other suppliers would have been harmed 
by combining Cargill's and Continental's competing port elevators in 
the Pacific Northwest, which purchase corn and soybeans from farmers 
in portions of Minnesota, North Dakota, and South Dakota. Currently, 
nearly 40% of Cargill's corn shipments abroad go through their Pier 
86 elevator in Seattle.
    Yet, in ordering the divestiture of Cargill's 4.2 million bushel 
terminal in Seattle, presently leased from the Port of Seattle, the 
nation's largest private corporation will now operate in part the 
TEMCO three million bushel grain elevator at the nearby Port of 
Tacoma. TEMCO or Tacoma Export Marketing Corp. has operated the 
terminal as a joint venture for Continental and Cenex

[[Page 16026]]

Harvest States Co-op, now in the process of merging with Farmland 
Industries, to form United Country Brands, the nation's largest 
agricultural cooperative. (See Issue #25)
    Slightly over 100 miles to the south of Tacoma, Mitsubishi Corp. 
a leading Japanese trading company, recently announced it has 
acquired about a 10% stake in the Kalama Export Company LLC equally 
owned by ConAgra Inc. and Archer Daniels Midland Co. (``Supermarkup 
to the World''). Kalama Export Company LLC operates a grain elevator 
along the Columbia River in Washington State, with hourly shipping 
capacity of around 3,000 tons and storage capacity of about 50,000 
tons. It also plans to increase storage capacity to 90,000 tons by 
the end of 2000.
    Yet Cargill spokeswoman Lori Johnson said the Justice Department 
was concerned that her company would have too much business 
concentrated in the Pacific Northwest because of Continental's 
leasing of the Tacoma grain-storage facility. ``We fought the 
Justice Department; not to include Seattle,'' said Johnson. ``We 
still need to sit down with Port officials and talk about the 
options and make it work for everyone,'' she said. ``But we do have 
an obligation under the lease.''
    According to the DofJ's divestiture order the Seattle port 
elevator may enter into a Standard Throughput Agreement with 
Cargill, or any joint venture involving the Tacoma elevator to which 
Cargill is a party (the ``Cargill Joint Venture''), provided that: 
(1) The Acquirer has no interest in Cargill or the ``Cargill Joint 
Venture''; (2) the throughput agreement gives Cargill or the ``Joint 
Venture'' no more rights concerning the operations of the facility 
than are commonly granted to sublessees in Standard Throughput 
Agreements; and (3) Cargill or the ``Cargill Joint Venture'' obtains 
continuing rights to move no more than 8.5 million bushels of grain 
and oilseeds combined in any given month through the Seattle port 
elevator.
    ``Moreover,'' the Justice Department states, ``the United States 
must be satisfied, in its sole discretion, that any Standard 
Throughput Agreement that may be negotiated between Cargill or the 
`Cargill Joint Venture' and the Acquirer of the Seattle port 
elevator: (1) Would leave the Acquirer with sufficient capacity for 
it to be a viable and effective competitor for the purchase of corn 
and soybeans in the Pacific Northwest draw area; and (2) would not 
adversely affect the Acquirer's ability or incentives to compete 
vigorously for the origination of corn and soybeans in the Pacific 
Northwest draw area, by raising the Acquirer's costs, lowering its 
efficiency, or otherwise interfering in the ability or incentive of 
the Acquirer to compete effectively.''
    The DofJ notes, however, that Cargill need not divest the 
Seattle port elevator if it does not buy, lease or otherwise acquire 
an interest in Continental's port elevator at or near Tacoma, 
Washington.
    If another firm, however, acquires the Tacoma port elevator 
pursuant to a right of first refusal (and Cargill retains the 
Seattle port elevator), Cargill shall not subsequently purchase or 
lease the Tacoma port elevator. If another firm acquires the Tacoma 
port elevator pursuant to a right of first refusal, Cargill shall 
not subsequently acquire any other interest in that facility 
(including a joint venture interest) without the written consent of 
the United States.
    As for the Seattle elevator, the Seattle Times business 
correspondent Patrick Harrington recently reported, ``with Cargill 
now planning to shift operations to Tacoma after all, it remains to 
be seen whether there is a player big enough to fill its shoes.''
    ``Cargill, even before it acquired Continental last month, was 
the nation's largest exporter of grain; Continental was the second 
largest. Illinois-based Archer Daniels Midland, another large grain 
company, had earlier expressed interest in the facility, according 
to Port of Seattle officials, but spokesmen for the company refused 
to comment.''

Banking on the Futures

    The issues of concentration in the grain trade, even prior to 
the Continental purchase by Cargill was promising to become a major 
issue in the year 2000, when new delivery terms take effect for the 
Chicago Board of Trade's (CBOT) corn and soybean futures contracts 
as Toledo, Ohio, will cease being a delivery point for the CBOT 
contracts, and delivery points will instead be clustered up and down 
the Illinois River where a large portion of grain facilities, on the 
northern portion of that river, are owned by Cargill or Continental, 
and likely will be combined.
    In its ``Complaint'' the DofJ stresses that by consolidating the 
Cargill and Continental river elevators on the Illinois River, their 
proposed transaction would concentrate approximately 80% of the 
authorized delivery capacity for settlement of Chicago Board of 
Trade corn and soybean futures contracts in two firms. ``This 
concentration,'' they emphasize, ``would increase the likelihood of 
price manipulation of futures contracts by those firms, resulting in 
higher risks for buyers and sellers of futures contracts.''
    For farmers like Floyd Schultz who currently transports his 
grain by truck just four miles to Lockport, Illinois where he can 
choose between Cargill and Continental grain terminals, sitting side 
by along a canal leading to the Illinois River, the proposed merger 
of the two grain companies will leave the nearest competitor an 
Archer Daniels Midland terminal 30 miles and another 10 cents a 
bushel in shipping costs away. While Cargill could lower its prices 
and improve its margins, he notes, ``we as farmers would be the ones 
who pay.''
    In Marvin Hayenga and Robert Wisner's 1998 study, ``Cargill's 
Acquisition of Continental Grain's Grain Merchandising Business,'' 
(see above), the authors obvious area of concern at that time was 
the northern section of the Illinois River. They noted at the time 
that even if the Continental sale to Cargill was approved, ADM will 
remain the largest firm on the river, controlling 36% of storage 
space.
    Faced with such a situation Sid Love, analyst with Joe Kropf & 
Sid Love Consulting Services in Overland Park, Kansas, told the Wall 
Street Journal that he regrets the possible departure of Continental 
from the grain market. ``My concern is deliveries on the Illinois 
River,'' Love said. ``Now, you'll basically have two big companies, 
and if they're both bullish, you won't have any deliveries,'' since 
they could export the grain rather than meet contract obligations.
    Reacting to the initial announcement of the purchase one 
Illinois farmer also speculated that if Continental was unable to 
successfully compete financially with other grain trading companies 
to the extent that it was willing to sell its assets to a competitor 
why would anyone believe that an independent elevator operator could 
achieve success in such a concentrated market?

``Throughput Arrangements'' High Costs Discourage Competition

    The Department of Justice's willingness to use ``throughput 
agreements'' as part of its Cargill/Continental divestiture order 
has received sharp criticism from Dan McGuire, a member of the 
American Corn Growers Association and the Nebraska Farmers Union.
    ``Our department,'' he said, ``will take a close look at this 
proposed merger. It is our job to further competition in private 
business and industry, and if we allow Samson and Delilah to merge 
we may be doing the consumer a disservice.''
    The chairman of Samson protested vigorously that merging with 
Delilah would not stifle competition, but would help it. ``The 
public will be the true beneficiary of this merger,'' he said. ``The 
larger we are, the more services we can perform, and the lower 
prices we can charge.''
    The president of Delilah backed him up. ``In the Communist 
system the people don't have a choice. They must buy from the state. 
In our capitalistic society the people can buy from either the 
Samson or the Delilah Company.''
    ``But if you merge, '' someone pointed out, ``there will be only 
one company left in the United States.''
    ``Exactly,'' said the president of Delilah. ``Thank God for the 
free enterprise system.''
    The Anti-Trust Division of the Justice Department studied the 
merger for months. Finally the Attorney General made this ruling. 
``While we find drawbacks to only one company being left in the 
United States, we feel the advantages to the public far outweigh the 
disadvantages.''
    ``Therefore, we're making an exception in this case and allowing 
Samson and Delilah to merge.''
    ``I would like to announce that the Samson and Delilah Company 
is now negotiating at the White House with the President to buy the 
United States. The Justice Department will naturally study this 
merger to see if it violates any of our strong anti-trust laws.''
August 30, 1999.
Department of Justice, Antitrust Division, San Francisco Office.

From: Riley Lewis (Forest City, Iowa)
Sent: Wednesday, June 23, 1999 6:52 AM
To: WEB JPR
Subject: Cargill-Continental Merger
    As your dept. dwells on the merger-acquisition of Continental 
Grain by Cargill I would like to comment as a 5th Generation Iowa 
farmer on the merits. I am against it--

[[Page 16027]]

farming for thirty years I've seen this many times in smaller 
amounts of suppliers to agriculture. When you have dealerships-coops 
etc that are of the larger scope I find the less competition tends 
to maker service less and more expensive with a take it or leave it 
attitude. Grain bids are our income and competition just as we sell 
hogs to three packers makes better bids. In a small town nearby 
there where two aggressive shoe stores five years ago--people come 
from big cities to buy brand name shoes at competitive bids--then 
one year the owner of one store died with no heirs and the store 
closed. The other raised his bids for shoes and within two years he 
went out of business as business went to a larger town. Great 
example of what competition does and here as your good producer we 
need competition--not mergers!


Thank you.
Riley Lewis.
  

October 11, 1999.

Mr. Roger W. Fones,

Chief, Transportation, Energy and Agriculture Section, Anti-Trust 
Division, U.S. Department of Justice, 325 Seventh Street, N.W., 
Suite 500, Washington, DC 20530.

FAX: 202/307-2784

    Dear Mr. Fones: I am writing to request that you conduct further 
investigation of the Cargill-Continental Grain sales and that you 
extend the comment deadline for another sixty days.
    Are you aware of what the creation of a larger monopoly will do, 
not only to grain farmers in this county, but also to all consumers?
    Monopolies always create higher prices for the consuming public. 
They create even lower prices for those who must sell their 
commodities to the monopolies. Grain prices are already far below 
break-even.
    Farmers are going broke in our state at an alarming rate, Across 
the U.S. farm income is down by 70%. Depressed prices are ruining 
not only farmers but all small-town businesses. I urge you to 
conduct a more thorough investigation into the Cargill/Continental 
Sale before submitting to final judgment on this.
    Please give my request your serious consideration.

      Sincerely,

Todd Lewis.
  

September 21, 1999.
Roger W. Fones,
Chief of Transportation, Energy and Agriculture Section, Anti-Trust 
Division, U.S. Department of Justice, 325 Seventh St. NW, Suite 500, 
Washington, D.C. 20530.

    Dear Mr. Fones: Please stop the Cargill Continental Merger. 
Cargill is so big already. They are in the seed, banking, 
fertilizer, chemical business. They manipulate the markets for cheap 
grain. They are in the feeding business. They own packing plants. 
What happened to our Anti-trust to stop all this. It is ruining the 
township and county rural life. They do not do business locally.
    They are giving mega bucks to the University of Minnesota to 
have the do research that they will own. They have the biggest 
lobbying effort in Washington DC.
    They only way rural life can fight this big giant is through 
political action. We have let it go to far. Look what happened in 
Russia when the food supply wasn't done individually. Look at 
Roosevelts monument and DC and read the words. It will help you 
understand why the Cargill-Continental merger can go on.
    I request you stop all mergers including the co-ops. They are 
big business and have forgotten about the patrons who built them.

Rick Lundebrek,
Township Officer, Benson, Minnesota 56215.

First Security Bank

September 21, 1999.
Roger W. Fones,
Chief of Transportation, Energy and Agriculture Section, Anti-Trust 
Division, U.S. Department of Justice, 325 Seventh St. NW, Suite 500, 
Washington, DC 20530.

    Dear Mr. Fones: How can you let Cargill and Continental Merger. 
The marketing is so concentrated already. Cargill is dominating the 
full chain: Seed, fertilizer, chemical, banking, end process, meat 
industry, meat packing. This is ANTI-TRUST. Please stop it now.

      Sincerely,

Vice President,
First Security Bank, 215 13th St. So. Benson, Minnesota 56215.


    The family farmer is who I work with. They can't believe this 
has happened in America. They look at Cargill like a sleeping giant.

September 24, 1999.
Judge Gladys Kessler,
U.S. District Court for the District of Columbia, 333 Constitution 
Ave. N.W., Washington, D.C. 20001.

Re: United States of America v. Cargill, Inc. and Continental Grain 
Company

    Dear Judge Kessler: Presently before you awaiting your approval 
is a ``Final Judgment'' filed by the U.S. Department of Justice 
relative to the purchase of the grain merchandising division of 
Continental Grain Co. by the Cargill Corp.
    Legal precedent, according to the Department of Justice, 
requires that ``the balancing of competing social and political 
interests affected by a proposed antitrust consent decree must be 
left, in the first instance, to the discretion of the Attorney 
General. The court's role in protecting the public interest is one 
of insuring that the government has not breached its duty to the 
public in consenting to the decree. The court is required to 
determine not whether a particular decree is the one that will best 
serve society, but whether the settlement is `within the reaches of 
the public interest.' ''
    In its July 8, 1999 ``Final Judgment'' we believe the Department 
of Justice has ``breached its duty to the public in consenting to 
the decree'' and that its ``Final Judgment'' is not ``within the 
reaches of the public interest.''
    As the Department of Justice's own ``Complaint'' states, the 
Cargill purchase would ``substantially lessen competition for 
purchases of corn, soybeans, and wheat in each of the relevant 
geographic markets, enabling it unilaterally to depress the prices 
paid to farmers. The proposed transaction will also make it more 
likely that the few remaining grain trading companies purchasing 
corn, soybeans, and wheat in these markets will engage in 
anticompetitive coordination to depress farm prices.''
    Using the Department of Justice's own figures and criteria, we 
see in its ``Complaint'' that even before this announced purchase 
the U.S. grain trade was already dominated, if not monopolized, by 
Cargill. Nothing in the Department of Justice's ``Final Judgment'' 
addresses itself to that issue.
    The Department of Justice must consider more than the grain-
buying operations of Cargill. Acquisition of Continental's seventy 
elevators will enhance the economic power of Cargill. This concerns 
farmers, because Cargill stands out as a top-four firm in beef and 
pork packing, cattle feedlots (where Continental is the largest), 
broiler and turkey production, animal-feed plants, grain-elevator 
capacity, flour milling, dry corn milling, wet corn milling, soybean 
crushing, and ethanol production. This dominant position across 
wide-ranging agricultural markets will allow Cargill to transfer 
resources between sectors according to the economic conditions 
prevailing at a given time.
    The ability to transfer assets will allow Cargill to maintain 
its dominant status in all of these markets irrespective of its 
competitive prowess. Farmers are forced into bankruptcy after a few 
bad seasons, but Cargill will maintain its dominant status over 
time, regardless of economic performance over the short term. With 
Continental's assets, Cargill will become an even more powerful 
firm, even more capable of strategic, cooperative, and anti-
competitive behavior.
    In the name of economic and social justice and the preservation 
of the family-farm system of agriculture in the United States, we 
urge you to recommend that the Department of Justice withdraw its 
``Final Judgment,'' study in far greater detail this ill-advised 
sale, and carefully consider the grave anti-trust issues it presents 
with dire consequences to both producers and consumers of our food 
supply.

      Sincerely,

Muriel Marvin,
  
Lawrence Marvin,
Placerville, CA 95667.


    Dear Attorney General Reno: I am writing to you to express my 
deep concern with the giant agriculturer marketer Cargill and its' 
agriculture anti-trust actions when it concerns small farmers in 
this nation. There should be an immediate investigation to see if 
Cargill is violating anti-trust laws.
    Thanks for your time.


[[Page 16028]]


      Sincerely,

Jerome McCollom,
Department of Justice, August 30, 1999, Antitrust Division, San 
Francisco Office.


Alta Vista, KS 66834
October 8, 1999.
Roger W. Fones,
Chief, Transportation, Energy & Agriculture Section, Antitrust 
Division, U.S. Department of Justice, 325 Seventh Street, N.W., 
Suite 500, Washington, D.C. 20530, FAX: 202-307-2784.

    Dear Mr. Fones: Please do not approve corporate mergers and 
buyouts such as Cargill with Continental Grain or Smithfield Foods 
with Murphy Farms and Tyson Food's Pork Group. I believe such 
mergers and buyouts serve to weaken American national security by 
forcing reliance upon foreign markets rather than promoting a sound 
domestic agriculture production and delivery system.
    While capitalism favors competition, such mergers and buyouts 
represent the same command and control favored by communism. 
Totalitarian food production and delivery systems have failed in all 
nations where they were the dominant system. Why would Americans 
believe such a system could work here? We use food and medicine as a 
political tool with nations reliant on imports. Do we truly wish to 
open our own country to similar political leveraging?
    The merging of Cargill and Continental Grain will not favorably 
improve grain prices for farm producers. As farm stability weakens, 
so does it's surrounding community. As communities lose their 
economic base, they lose their ability to adapt to fluctuations of 
market, economy and social unrest.
    Through the past decades, we have seen a reduction in the number 
of industry competitors of steel, auto and textile manufacturing as 
well as food and fiber production. The reduction to a few industry 
giants has given the impression of reduced consumer prices and 
strong economy. However, such mega-corporations are not flexible. 
Labor problems, interest rates, consumer choice, environmental 
impact, and many other factors can result in massive employee lay-
offs, plant closings, unmanageable pollutants, labor strikes, 
unstable housing, overburdening of community services and other 
negative impacts that are too great for the community to effectively 
handle.
    I believe in world trade, competitive trade with choice and 
options rather than singular avenues. I support the government use 
of anti-trust laws when corporate mergers and takeovers threaten the 
competitive edge of all America for the sake of exorbitant short-
term gain for relatively few beneficiaries. Thank you for your 
consideration.

      Sincerely,

Carissa McKenzie
  

Westminster College

501 Westminster Avenue, Fulton, Missouri 65251-1299, 314 642-3361

October 1, 1999.
Roger W. Fones,
Chief, Transportation, Energy and Agriculture Section, Antitrust 
Division--U.S. Department of Justice, 325 Seventh Street, N.W., 
Suite 500, Washington DC 20530.

    Dear Mr. Fones: Antitrust legislation is in place to protect 
consumers and competitors against a company dominating the market 
and taking unfair advantage. For that reason, I object to the 
Cargill purchase of Continental's grain operations. This purchase 
would move Cargill from the category of dominator to the category of 
terminator of everyone else.
    When I hear that the Cargill/Continental sale is in your hands, 
I hope that you will consider the impact on rural communities of 
this merger. I have had the chance to see these big players operate 
firsthand. I live across the road from a Cargill hog operation. The 
arrogance of these corporate fellows is astonishing. Making these 
guys more powerful would be another nail in the coffin for diverse 
rural communities like mine.
    When independent operators are put out of business by big 
operators, as has happened in my community, everybody suffers. The 
markets have already gotten so concentrated that an out-of-favor 
producer can be cut off from being able to make a living. The big 
operators create environmental disasters that are impossible to 
regulate. When regulators get involved, they are ignored or tied up 
in court.
    Consumers are hurt by this concentration, too. Consumers suffer 
from price-fixing and from lack of choice in the marketplace.
    National policy has made corporations more powerful, and this 
needs to stop. These big operations do not treat producers like 
independent businessman. Instead, they are paid as little as 
possible while keeping as much as possible in the corporation. This 
hurts us all.
    Please do all you can to stop this merger.

      Sincerely,

Margot Ford McMillen
  


Sept. 27, 1999.
    I am very much opposed to the Cargill-continental merger. Can't 
anyone see what is happening? Going big is not better--look what is 
happening to our schools, our little towns etc.--look at our grain 
prices now--the farms are all getting too big--soon there will be 
only a few farms left in each county--please use some common sense 
in this situation!

Darlene Milbreadt,
Echo, MN 56237.


September 28, 1999.

Mr. Roger W. Fones,
Chief, Transportation, Energy & Agriculture Section, Antitrust 
Division, United States Department of Justice, 325 Seventh Street 
N.W., Suite 500, Washington, D.C. 20530.

Re: United States of America v. Cargill, Inc. and Continental Grain 
Company

    Dear Mr. Fones: I am writing to express my opposition to Cargill 
Inc. purchasing the grain division of Continental Grain Co. I will 
leave the technical analysis to those qualified to do so and mainly 
focus on the human element involved. I want you to know how this 
will affect me and my community and hundreds of thousands like 
myself and their communities across this country.
    I am a farmer from Northeast Missouri. I wish I could tell you 
that the proposed acquisition would leave me with one fewer choice 
when it came time to market the grain I raise. I can not make that 
claim as there is no Continental elevator in my area. I wish there 
were because then my choices of elevators would almost be double 
what they now are. I say almost because I have one soybean processor 
(ADM) who normally pays 7-10 cents more that their competitor (?), 
Bunge, who does not process soybeans at their location. It is 
reversed for corn and wheat as Bunge outbids ADM by substantial 
margins on these two crops 90% of the time. Thus you can see why I 
would welcome another elevator, regardless of who owns it.
    Following are some of my reasons for opposing the merger:
    1. This area of northeast Missouri, west central Illinois, and 
southeast Iowa are all part of a captive draw area for ADM in 
regards to soybean purchases. As recently as 10 years ago this tri-
state area had no less than 4 competitive bidders for soybeans. Two 
processors, ADM and Quincy Soybean Co., and two river terminals, MFA 
Incorporated and Bunge. All of the soybeans purchased at the small 
country elevators eventually ended up being sold to one of these 4 
purchasers. Within the last 10 years ADM has purchased Quincy 
Soybean Co. and Bunge has bought out MFA Inc.'s river terminal. That 
leaves the area where we are today with ADM and a non-competitive 
Bunge. I know first hand what a lack of competition means when it is 
time to sell my crops.
    2. I use the Chicago Board of Trade to hedge my grain. I do not 
pretend to be an expert on the operation of the board but it 
concerns me when one firm will control 80% of the delivery points 
for futures settlement. I have read that this could lead to 
manipulation of futures contracts.
    3. The United States agricultural community has been caught up 
in a frenzy of mergers and buyouts. This may be the weakest argument 
to make legally, but it is the strongest from the human element 
standpoint. This merger, like most of those before, is really a 
double edged sword. One side of the blade cuts out the 
inefficiencies of smaller entities when they increase economic size. 
The other edge cuts the fabric of Rural America. Each business we 
lose, be it a elevator, seed company or machinery manufacturer 
lessens competition among those who we do business with. This 
lessening of competition drives up cost which in turn drives 
producers from business.
    It is extremely difficult for anyone not in the rural areas of 
the Midwest to fully understand rural infrastructure. I live near a 
town with a population of 2700. This size community, like thousands 
across this country, depends upon farmers and ranchers to provide a 
large portion of the fuel for their economic engines. Consolidation 
is killing rural America. Will stopping this merger or any other 
single acquisition reverse this

[[Page 16029]]

trend? No--but it will be a start to the revitalization of the rural 
areas of this country. Without a healthy rural area our country can 
not be whole. It is time for someone in a position of authority to 
step up and draw a line on this insanity. I hope this message 
reaches someone who has the courage and insight to do just that.

      Sincerely,

Keith G. Mudd
  


Roger W. Fones,
Antitrust Division, U.S. Department of Justice, 325 7th St. NW, 
Suite 550 Washington, D.C. 20530.

October 9, 1999.
    Dear Sir: Please consider this letter regarding the Cargill 
Continental merger very carefully.
    Cargill, a company from my state of Minnesota, has been ruthless 
in dealing with farmers and small businesses. They practice buying 
the narrow point in the pipeline and using that position to control 
and dominate the industry.
    I have personally experienced this when I sold three ship loads 
of corn to the Egyptian feed millers in 1995. The corn was to be 
loaded to Egyptian ships at the port of Duluth. Cargill would not 
load it and the deal fell through. The same scenario happened at the 
Port of New Orleans to the N.F.O.
    This summer Cargill was bidding 20 cents above Chicago for corn 
delivered by rail to Duluth, however Cargill had booked all the rail 
cars so independent elevators could not take advantage at that 
price. Truck bid for the same commodity was 20 cents under Chicago. 
Thus Market Domination.
    This merger would give Cargill control of most of the major 
ports and loading facilities on the U.S. and thus control of the 
movement of grain and other commodities in the U.S.
    It is not wise or in the best national interest to allow one 
company to control this much of the food supply of the United States 
of America.

      Sincerely,

Winton Nelson,
Darwin, MS 55243, 320-693-7966.


September 21, 1999.

Roger W. Fones,
Chief, of Transportation, Energy and Agriculture Section, Anti-Trust 
Division, U.S. Department of Justice, 325 Seventh St. NW, Suite 500, 
Washington, D.C. 20530.

    Dear Mr. Fones: Please stop all these big corporate mergers. 
This is to stop the Cargill-Continental Merger as well as all large 
Ag corporate Mergers. Last winter in Texas in one county alone 
Cargill was feeding 83,000 head of beef feeders. Two miles away 
Continental was feeding 83,000 head. This has got to stop. They 
purchased alot of these cattle cheap from the drought in Texas and 
so forth. They purchased all the cheap feed manipulated by their 
marketing. Look into it yourself as they made mega bucks on the meat 
division. All this is ruining the family farmers. This is also 
ruining rural areas. Farmers spend their money locally. Cargill is 
in the seed, fertilizer, banking, chemical business. They do not 
support local areas at all. Farmers that are desperate to keep 
farming farm land all over for them. This does not help local areas. 
We need a stop on all mergers now.
    They do not support local schools, or rural infrastructure. Do 
you want Cargill to get even bigger. They are farming land down in 
South America and paying the locals $250.00 per month. They are glad 
to farm down there because there is no infrastructure there. Do we 
want this to continue.
    The grain marketing now is so concentrated. They are in the 
livestock business as well. They own the packing plants. Please look 
into these problems. They concentrate animals in large numbers. Look 
at the livestock in the large hog operations in North Carolina. We 
are going to pay for all this concentration.
    Rural Areas need help from people like you. We need to have the 
anti-trust laws enforced. When Cargill Owns the Food Policy we will 
PAY.

      Sincerely,


David Olson
  

Lei `Ohu Farm

46-3615 Kahana Drive, Ahualoa, Honokaa, Hawaii, Phone: (808) 775-
9473

FAX TO: Mr. Roger W. Fones, (202) 307-2784
FAX FROM: Glenn Oshiro
FAX #: (808) 775-9473
DATE: October 11, 1999
Re: Cargill, etc.

    Please extend the period for public input on the Cargill 
Continental Grain matter. This is the first day I've heard of your 
deliberations, and I consider myself to be well informed. My 
business calls for me to be in touch with small farmers and 
ranchers. As you can imagine, this is ongoing and intensive being 
that there are few consistent means to reach the small producer, 
e.g. there are few, if any, umbrellas that cover small farmers and 
ranchers. Much of what I do to attract the attention of my clients 
is word of mouth, one on one.
    While I'm not suggesting that you solicit responses from small 
producers individually, more time is necessary for word of the 
public comment period to reach small producers.
    I am a farmer, business person, and stockholder.

Glenn S. Oshiro,
Buy from the Farmer.


September 18, 1999.
Judge Gladys Kessler,
U.S. District Court for the District of Columbia, 333 Constitution 
Ave., N.W., Washington, D.C. 20001.

Re: United States of America v. Cargill, Inc. and Continental Grain 
Company

    Dear Judge Kessler: After reading that the Department of Justice 
itself has admitted that the Cargill purchase of the Continental 
grain division would ``substantially lessen competition for 
purchases of corn, soybeans, and wheat in each of the relevant 
geographic markets, enabling it unilaterally to depress the prices 
paid to farmers,'' I can only urge you to put a stop to it. This 
purchase is not in the public interest.
    More and more lately I read in the business news about mergers 
between already massive corporations.
    More and more I hear about how desperate farmers across America 
are again being squeezed between high costs they pay to raise 
animals and grow crops and low prices they're being offered for 
their livestock and produce.
    Here in rural Mendocino and Sonoma counties, in Northern 
California, beautiful old apple and pear orchards are being bought 
from family farmers and then razed at a frantic price by investment 
corporations anxious to plant vineyards, the money-making crop of 
the moment. Other local ag producers and ranchers are finding the 
costs of farming and raising livestock too high to resist the 
pressure to sell off their land for vineyard conversions or rural 
residential subdivisions.
    It is our government's duty to prevent any more mergers that 
further increase the costs to American family farmers. America needs 
to grow its own food. Putting agriculture in the hands of 
international corporations instead of the family farmers--as seems 
to be happening more and more rapidly--is a social and environmental 
disaster.

    Thank you.

Jennifer Poole,
Willits, CA 95490, Mendocino County.


Mon., Oct. 11, 1999.
From: ``Mike Callicrate'' [email protected]>
To: Undisclosed-Recipient:@secure06.levon.net;>
Date: Mon., Oct. 11, 1999, 12:22 PM
Subject: [HeartbeatUSA] last day for comment on Continental-Cargill 
merger

    Consumers, family farmers, small-town business owners: Today, 
October 11, is your last chance for public comment on the creation 
of the world's largest food monopoly. It is the merger of Cargill 
and Continental Grain. Its effect will be to raise consumer prices 
and reduce the earnings of already-hurting family farmers and small 
businessmen. Monopolies always hurt the consumer by destroying 
competition.
    You may register your objections to the above deal simply by 
faxing the Chief of Transportation, Energy and Agriculture Section 
(Mr. Roger W. Fones) at the following Fax number: 202/307-2784.
    Use a simple, brief message like the following:
    ``Please conduct a more thorough investigation into the Cargill/
Continental Grain sale before submitting a Final Judgment on the 
matter. Please extend the public comment period for another sixty 
days.''
    Public comment period officially closes tomorrow. Fax your 
message today.

[email protected]

    As states above.

Rae Powell
  


Amanda Bray
  


October 9, 1999.
Roger W. Fones,
Chief of Transportation, Energy and Agriculture, Anti Trust 
Division, U.S.

[[Page 16030]]

Department of Justice.

    Dr. Fones: I urge you to Conduct a more Complete investigation 
into the sale of Cargill-Continental Grain, before submitting a 
final judgment.
    Farm income in the United States is down by 70%.
    Depressed prices are running farmers and small town business 
people.
    Please delay the Comments deadline for another 60 days.
    I appreciate your consideration.

      Sincerely,

N. Ramsey,
Mesquite, TN 75150.


September 22, 1999.
    Dear Mr. Roger Fones: The merger of Cargill & Continental Grain 
Co. Is a major concern of ours. This merger will take away our 
market freedom. Already we are hurting because to few people control 
our markets and tell us what they will give us and we have to take 
it.
    I always believed the anti-trust laws were to protect the little 
man but it seems like no one abides by them any more and they just 
find ways to go around them. We know that it is not fair! Cargill is 
already one of the top 4 firms in beef, pork, turkey, chicken, corn, 
soybean and production in merger would just make these more 
powerful.

      Thank you for reading this,

Mrs. Jan Richardson
  

    A copy has also been sent to Attorney General Ken Salazor.

September 18, 1999.
Judge Gladys Kessler,
U.S. District Court for the District of Columbia, 333 Constitution 
Ave. N.W., Washington, D.C. 20001.

Re: United States of America v. Cargill, Inc. and Continental Grain 
Company

    Dear Judge Kessler: Presently before you awaiting your approval 
is a ``Final Judgment'' filed by the U.S. Department of Justice 
relative to the purchase of the grain merchandising division of 
Continental Grain Co. by the Cargill Corp.
    In the name of economic and social justice and the preservation 
of the family farm system of agriculture in the United States I urge 
you to recommend that the Department of Justice withdraw its ``Final 
Judgment'', study in far greater detail this ill-advised sale and 
carefully consider the grave anti-trust issues that it presents and 
the dire consequences to both producers and consumers of our food 
supply.

      Sincerely,

Howard H. Sargent,
Consumer, Boulder, CO 80303.


Central City, NE 68826
Sept. 26, 1999.
Department of Justice,
United States Government, Washington, D.C. 20510.

ATTN: Dept. for Comments on proposed Cargill-Continental merger

    Dear Sirs: I am writing to voice my concern on the proposed 
Cargill buyout of Continental Grain Co. I would ask you to please 
disapprove this merger on the grounds that with the merger-mania of 
the past 20 years, the agricultural industry has become so 
concentrated that there is no free market.
    Both the meat-packing plants and grain companies have gained a 
dangerous stranglehold on U.S. food production and prices. Shouldn't 
our anti-trust laws protect the people from such monopolies?
    Eventually, even our farmer co-ops will have little influence in 
agriculture when they are up against such giants.
    It is probable that thousands of family farmers will be going 
out of business this year--a tragedy for their families and for the 
nation. For the most part their only customers are the corporation 
giants which can name their own price--way below the cost of 
production, and the result of the over-concentration in the 
agricultural industry.
    What safeguards are in place to make certain that food will 
continue to be affordable if family farms become a thing of the 
past?
    Please use our anti-trust laws to protect all Americans.

      Sincerely,

Lois Schank
  

Clyde Southern

Steele, MO 63877.

July 23, 1999.
The Honorable Judge Gladys Kessler,
U.S. District Court, District of Columbia, 333 Constitution Ave., 
NW, Washington, D.C. 20001.

Civil Action #991875 Filed 7-8-99.

    Dear Judge Kessler: I write to you as a second-generation farmer 
located in the Missouri Bootheel area, along the Mississippi River 
at the juncture of Missouri, Arkansas and Tennessee. My family is 
primarily engaged in the production of soybeans, wheat, corn, and 
rice and we have experienced the great advantage of river barge 
transportation of our farm produce for many years. We like to think 
that we contribute to the prosperity of our nation by our 
involvement in international trade, not to mention our bountiful 
production that has alleviated hunger and starvation throughout the 
world.
    The above civil action involves the Continental Grain Elevator 
which is located at Cottonwood Point (a historic ferry crossing), 
some ten miles south of our county seat at Caruthersville, and 
within a couple of miles of Arkansas. We have been privileged to 
sell grain to all of the grain elevators within this area, and 
conditions have always been amicable. In this flat alluvial valley, 
we can see many of the elevators along the river, and the 
Continental Storage Tanks are within sight of our farm.
    I certainly agree with Joel Klein's statement in the Attorney 
General press release, which states ``This enforcement action 
demonstrates the Department's commitment to preserve competition in 
agriculture.'' Over the years I have seen significant improvement in 
competition along the river, and producers in other parts of the 
nation are envious of the prices we receive on the spot market and 
the ability to book a favorable basis at local elevators or at the 
Chicago Board of Trade. Now comes a point of jeopardy which we 
perceive exists in one small portion of the divestitures listed in 
the final judgment of the civil action claim filed under Section 7 
of the Clayton Act, as amended (15 U.S.C. 18).
    I respectfully refer to Page 2, of the Final Judgment 
(Definitions) Paragraph F, ``Caruthersville river elevator``. 
Although this elevator has a mailing address of Route 1, 
Caruthersville, MO 63830, it is known locally as the Cottonwood 
Point facility, which is located 10 miles south of Caruthersville, 
near the Arkansas border. The nearest town and postoffice is Cooter, 
Missouri, three miles west. A modern bridge crossing to Tennessee 
along Interstate 155, leads to other elevators (within sight of the 
Continental elevator at Cottonwood Point). We have no trepidation or 
fear of monopoly practices from Cargill, which has an elevator at 
New Madrid, Missouri 45 miles to the north. The present fear is that 
one of the largest members of the International Grain Cartels is 
interested in purchasing the Continental facility at Cottonwood 
Point. We learn that Bunge Grain Company may have entered into 
negotiations to purchase the Continental elevator, which would pose 
a definite lack of competition for local grain farmers in their 
choice of port outlets in the area. The proximity of current Bunge 
elevators in our area of operation could artificially depress the 
prices offered for our grain.
     Nearby--Bunge has an elevator at Caruthersville (10 
miles), one at Huffman, Arkansas (8 miles), one at Booths Point 
(across the river in Tennessee at the Interstate Bridge--15 miles), 
and one at Heloise directly across the river in Tennessee within 
eyesight of Continental.
     If Bunge purchases Continental at Cottonwood Point, 
this would given them a total of seven elevators along the river 
within a fifty-mile distance.
    It is common knowledge locally that other large grain trading 
facilities are interested in purchasing the Continental facility at 
Cottonwood Point. Cargill would probably provide trade opportunities 
without restraint of trade in the area, and of course we would be 
happy to see Continental remain at its current location and with the 
same ownership.
    However, we would like to offer one caveat in regard to the 
selection or location of any grain-trading firm at the current 
Continental Cottonwood Point site. The owners and operator must be 
large enough to trade and offer strong competition in the 
International trading arena. It would likely be impossible for a 
small independent grain elevator to offer competitive prices to 
local producers if it did not have the ability to compete and trade 
in a worldwide arena of International trade.
    During this critical time of agriculture stress, it is 
imperative that we continue to have strong competition and fair 
prices for producers in our area. Therefore, we strongly insist that 
Bunge Grain should not be allowed to purchase the Continental Grain 
facility at Cottonwood Point, thus creating a near monopoly 
situation which would invalidate the current anti-trust action.


[[Page 16031]]


      Sincerely,

Clyde Southern
  


October 12, 1999.
Mr. Tom Miller,
Iowa State Attorney General, Hoover State Office Building, Des 
Moines, Iowa.

Re: Cargil-Continental Grain Merger

    Dear Mr. Miller: As a graduate of one of the finest Universities 
in the middlewest, Iowa State at Ames, with a major in soils and a 
minor in Agricultural Economics, I strongly urge you to vote NO for 
this merger. This merger will dictate less market choices for 
farmers, large and small alike. Today, a bushels of corn, (56 pounds 
of beautiful raw protein) will not buy a cheap hamburger in many 
restaurants. This merger, IF APPROVED, will lower the farmer's share 
of the retail market even still more.
    Following my senior year at Iowa State, I took advantage of the 
long established ISU Ag. travel trip. It was a 10,000 mile 
accredited trip visiting areas in Detroit, Washington, D.C., 
Gainsville, Austin, and Denver. With four major stops per day, we 
studied crops, soils, and we also visited with farmers and ranchers 
along the way. One very interesting stop was along the lake area in 
Michigan where a overseas grain buyer/shipper was located by the 
name of Spencer. (No relation to me). I would like to see our 
government encourage the escalation of these small shippers. This 
would increase competition and help the family farmer win a fairer 
share of the consumer's food dollar. Please vote no for the merger 
of giant self serving corporations like Cargil and Continental.

      Sincerely,

Lyle D. Spencer,
Goldfield, Iowa.


Blooming Prairie, MN 55917
September 28, 1999.
Mr. Roger W. Fones,
Chief, Transportation, Energy & Agriculture Section, Antitrust 
Division, U.S. Department of Justice, 325 Seventh St. NW Suite 500, 
Washington, DC 20530.

    Dear Sir: The merger of Cargill and Continental Grain Co. is a 
major concern to the American farmer. This would increase Cargill's 
monopoly of the grain trade. Why should Cargill be any different 
than other big monopolies? Isn't this what anti-trust laws are for?
    I am proud to be an American farmer. We feed the people! This is 
the most important occupation in the world! Why can't we be given 
the respect we deserve? We need fair prices at today's standard of 
living, not yesterday's!
    If this merger goes through, Cargill will have even more power 
to control the farmer's prices and life. Look at the example of the 
hog farmer. What a shame the small hog farmer has been driven to 
give up. Why do all that hard work to lose money constantly?
    Prices are already so horribly poor in all the markets we are 
hanging on only by the hope things will improve. When? Farmers can't 
wait much longer. Farmers work as hard as anybody in the world, yet 
can't get a fair price for all their hard work. Most everybody 
else's wages increase with the years. Not ours!
    Look at rural America's communities. Their livelihood depends on 
what the farmer buys in town. There are many vacant stores in rural 
America. When the farmer doesn't have money, he stops buying 
everything but the bare necessities. It will trickle to the big 
cities eventually. Think depression! It's already here in rural 
America.
    The U.S. Department of Justice needs to further investigate this 
merger and stop it! Also extend the deadline for comment and really 
get out in the rural communities and on the farms. See and listen to 
what its really like. Feel the hopelessness and pain!
    What can the government do? Show us you care and stop this 
merger. Investigate who or what is really controlling the market. 
It's not the farmers who work so hard to feed the people!

      Sincerely,

Ellen Stebbins
  


Pennack, MN 56279
October 6, 1999.
Roger W. Fones
Chief of Transportation, Energy And Agriculture Section, Antitrust 
Division, US Dept of Justice, 325 7th St., NW, Suite 550, 
Washington, DC 20530.

    Dear Mr. Fones: As a retired owner of a 160 acre farm, my first 
interest is in farming and I am writing to protest the Cargill-
Continental merger. Why are these big companies allowed to merge? 
Many years ago when I was in school there were antitrust laws to 
prevent monopolies. It seems that monopolies are now allowed so that 
among others, farmers have no say in setting prices on their 
products.
    Monopolies are not only bad for farmers, they are bad for 
telephone users, cable to users, medical services and huge grocery 
store patrons. I think it is time to bring all of this to a stop.
    Please do what you can to help farmers.

      Sincerely,

Eleanor Stehieg
  

Stockton Ranch

Box 182,

Grass Range, MT 59032

October 11, 1999.
Roger W. Fones,
Chief of Transportation, Energy, and Agriculture Section, Fax: (202) 
307-2784.

    Dear Mr. Fones: the merger between Cargill and Continental will 
destroy any vestige of a competitive market for grains. I urge you 
to do a more thorough investigation before submitting a final 
judgment. Also the comment period has been too short for farmers to 
adequately respond to, please extend it by at least 60 days.

      Sincerely yours,

Gilles Stockton
  


Lakin, Kansas 67860
October 12, 1999.
Mr. Roger Fones,
Chief Transportation, Energy & Agriculture Section, Antitrust 
Division, US Department of Justice, 325 Seventh Street, NW, Suite 
500, Washington, DC 20530.

    Dear Mr. Fones: I WISH TO REQUEST THAT YOU GRANT FURTHER 
CONSIDERATION TO THE PROPOSED CARGILL AND CONTINENTAL GRAIN SALE. 
PLEASE GRANT A SIXTY DAY COMMENT PERIOD EXTENSION AS I KNOW THAT 
MANY PEOPLE DID NOT COMMENT AS THEY WERE MADE TO BELIEVE BY MEDIA 
PRESENTATIONS THAT IT WAS A ``DONE DEAL.''
    Please conduct a more thorough investigation and abide by your 
requirements to give all facets of the matter due consideration. 
Thank you for your attention to the issue and your service to all 
the American public. We would not wish to believe the allegations 
that such a takeover with extremely grave consequences for farmer 
and the consuming public would not have your serious evaluation.

      With sincere respects,

Dr. Frankie M. Summers
  


Greenwich, NY 12834
October 4, 1999.
Judge Gladys Kessler,
U.S. District Court for the District of Columbia, 333 Constitution 
Ave. NW, Washington, DC 20001.

Re: United States of America v. Cargill, Inc. and Continental Grain 
Company

    Dear Judge Kessler: Presently before you awaiting your approval 
is a ``Final Judgment'' filed by the U.S. Department of Justice 
relative to the purchase of the grain merchandising division of 
Continental Grain Co. by the Cargill Corp.
    Legal precedent, according to the Department of Justice, 
requires that ``[t]he balancing of competing social and political 
interests affected by a proposed antitrust consent decree must be 
left, in the first instance, to the discretion of the Attorney 
General. The court's role in protecting the public interest is one 
of insuring that the government has not breached its duty to the 
public in consenting to the decree. The court is required to 
determine not whether a particular decree is the one that will best 
serve society, but whether the settlement is ``within the reaches of 
the public interest.` ''
    In its July 8, 1999 ``Final Judgment'' I believe in fact that 
the Department of Justice has ``breached its duty to the public in 
consenting to the decree'' and that its ``Final Judgment'' is not 
``within the reaches of the public interest.''
    Clearly, as the Department of Justice's own ``Complaint'' states 
the Cargill purchase would ``substantially lessen competition for 
purchases of corn, soybeans, and wheat in each of the relevant 
geographic markets, enabling it unilaterally to depress the prices 
paid to farmers. The proposed transaction will also make it more 
likely that the few remaining grain trading companies that purchase 
corn, soybeans, and wheat in these markets will engage in 
anticompetitive coordination to depress farm prices.''
    Using the Department of Justice's own figures and criteria we 
see in its ``Complaint'' that even before this announced purchase 
the

[[Page 16032]]

U.S. grain trade was already dominated, if not monopolized, by 
Cargill and nothing in the Department of Justice's ``Final 
Judgment'' addresses itself to that important issue.
    Likewise, the Department of Justice must consider more that the 
grain buying operations of Cargill. The acquisition of Continental's 
seventy elevators will enhance the economic power of Cargill as a 
general matter. Such a result concerns farmers because Cargill's 
assets and economic power can be deployed across a range of 
agricultural sectors.
    For example, Cargill stands out as a top-four firm in beef 
packing, cattle feedlots (where Continental is the largest), pork 
packing, broiler production, turkey production, animal feed plants, 
grain elevator capacity, flour milling, dry corn milling, wet corn 
milling, soybean crushing, and ethanol production. Such a dominant 
position across many agricultural markets will allow Cargill to 
transfer resources between sectors according to the economic 
conditions that are prevailing at a given time.
    The ability to transfer assets will allow Cargill to maintain 
its dominant status in all of these markets irrespective of its 
competitive prowess. Unlike farmers, who are forced into bankruptcy 
after a few bad seasons, Cargill will maintain its dominant status 
over time regardless of economic performance over the short-term. 
With Continental's assets, Cargill will become an even more powerful 
and ``sophisticated'' firm, even more capable of strategic, 
cooperative, and anti-competitive behavior.
    In the name of economic and social justice and the preservation 
of the family farm system of agriculture in the United States I urge 
you to recommend that the Department of Justice withdraw its ``Final 
Judgment,'' study in far greater detail this ill-advised sale and 
carefully consider the grave anti-trust issues that it presents and 
the dire consequences to both producers and consumers of our food 
supply.

      Sincerely,

Daniel J. Swartz,
A SEED Europe.

Auburn University, Alabama 36849-5406

College of Agriculture, Department of Agricultural Economics, and 
Rural Sociology, 202 Comer Hall, Telephone: (334) 844-4800, FAX: 
(334) 844-5639

September 15, 1999.
Mr. Roger W. Fones,
Chief, Transportation, Energy & Agriculture Section, Antitrust 
Division, United States Department of Justice, 325 Seventh Street 
N.W., Suite 500, Washington, D.C. 20530.

Re: United States of America v. Cargill, Inc. and Continental Grain 
Company

    Dear Mr. Fones: I am writing to state my opposition to Cargill's 
acquisition of Continental Grain Company. My opposition is based not 
on disapproval of either Cargill or Continental as individual firms, 
but on the merger as it relates to the reorganization of global 
agriculture that is unprecedented in terms of size and speed.
    My objections to this merger are that it would: (1) Continue the 
erosion of competition in agriculture markets, (2) increase the 
imbalance of economic power favoring agribusiness giants at the 
expense of the farmer, and (3) decrease land and resource 
stewardship incentives in the emerging system.
    Competition is fading in agricultural markets in part because of 
unprecedented mergers and acquisitions, and in part because of 
insidious joint ventures, strategic alliances, interlocking 
directorates and partial ownership of related agribusiness firms. 
These alliances, which are very difficult to trace, result in a 
fuzzy web of corporations and cooperatives that soften, if not 
threaten, competition. In some circles, the alliances are 
appropriately referred to as ``corporate incest.''
    As just one example out of thousands of alliances that threaten 
competition, I would point to a Cargill corn processing plant in 
Eddyville, IA, which is connected by pipeline to a Heartland Lysine 
plant nearby. Nearing completion is a Midwest Lysine plant located 
in Blair, NE, which will also be connected to the Cargill corn 
processing plant. Midwest Lysine is a joint venture between Cargill 
Degussa Corp, while Heartland Lysine is owned by the Japanese firm, 
Ajinomoto, of lysine price-fixing fame. Are Midwest Lysine and 
Heartland Lysine going to engage in rigorous competition? Hardly. 
Arrangements such as this do not appear to be properly considered in 
DOJ evaluations of mergers.
    Perhaps of more concern than softening competition is the 
increasing economic power of giant corporations over farmers. The 
emerging food system has a few vertically integrated supply chains 
like Cargill, in which production is increasingly contracted out to 
farmers. With contract production, farmers have little economic 
power and continue in farming at the discretion of the supply chain 
corporations. Supply chain corporations can thus extract essentially 
all of the economic profits, leaving the contract farmer with a 
subsistence level of income composed of very low returns to 
management and labor.
    Agricultural cooperatives were established under the Capper-
Volstad Act as a way for farmers to horizontally organize to 
countervail market (economic) power held by corporations. 
Unfortunately, the giant cooperatives have drifted from this 
mission. Giant cooperatives are evolving to a vertical structure, 
run more for the benefit of managers that for benefit of the farmer 
members. At best, the farmer member is relegated to the position 
held by a minority stockholder in a corporation. At worst, the 
farmer member is a minority stockholder that cannot get his equity 
out of the corporation until death.
    Cooperatives have formed hundreds of alliances and joint 
ventures with the giant corporations like Cargill. For example, 
Cargill has a 50-50 joint venture with Delta Growers Association, a 
Cooperative. Deals like this have the potential for a subtle ``co-
opting of co-ops'' by corporations. Thus, in my opinion, many of the 
existing cooperatives should not be viewed as countervailing 
corporate power.
    In this emerging vertically integrated supply system, the giant 
corporations do not own the land and other resources used in 
production agriculture, yet input and production decisions are 
dictated by CEO's. Incentives for conservation of land and other 
resource are thus lost, and could lead to degradation of natural 
resources. Furthermore, having land management decisions made by 
people (CEO's) who are not intimate with the land is asking for 
trouble.
    Those of us in major poultry production areas have witnessed 
contracting for over 30 years. The bottom line is that contract 
producers invest one-half of the capital in the industry, yet 
capture a proportionally much smaller percentage of the returns. 
Moreover, contract poultry producers know that if they speak out 
against ``The Man'' (the integrator) they will be instantly 
bankrupt. Is this the kind of Society we want?
    Individually, many of the recent mergers, acquisitions and joint 
ventures involving large agribusiness corporations may appear 
innocuous. Collectively, however, they are quickly moving us down 
the road to agricultural feudalism with only a few firms controlling 
much of the world's food supply. The DOJ appears to assess mergers 
in terms of horizontal competition, without giving adequate 
consideration to vertical power imbalances.
    I respectfully request that you stop the merger of Cargill and 
Continental. All mergers of corporations and cooperatives alike 
should be blocked pending a thorough, objective evaluation of 
whether the frenzy of mergers, acquisitions and alliances is in 
Society's best interest.
    Thank you.

      Sincerely,


C. Robert Taylor,
ALFA Eminent Scholar and Professor of Agricultural Economics.


To: Mr. Roger W. Fones
Sent: 10/10/1999 at 2:44:56 PM
Subject: Cargill/Continental Grain Merger

    Dear Sir: I respectfully request that you conduct a more 
thorough investigation of the Cargill/Continental grain sale before 
submitting a final judgment on the matter. Please extend the public 
comment period for another sixty days.

      Sincerely,

Janice Urie,
Rt. 1, Box 28B, Lakin, KS 67860.


October 11, 1999.
    Dear Sirs: I want to strongly oppose the proposed merger of 
Cargill and Continental Grain.
    As a farmer from South Dakota we need all the competing entities 
we can get it called capitalism!
    No No No

      Sincerely,

James H. Peht,
Keldion, SD 57634.


October 11, 1999.
Mr. Roger W. Fones,
Chief, Transportation, Energy and Agriculture Section, Anti-Trust 
Division, U.S. Department of Justice, 325 Seventh

[[Page 16033]]

Street, NW, Suite 500, Washington, DC 20530.

FAX: 202/307-2784

    Dear Mr. Fones: The purpose of this letter is to request that 
you conduct further investigation of the Cargill-Continental Grain 
sale and that you extend the comment deadline for another sixty 
days.
    The creation of a larger monopoly will not only depress grain 
prices further in this country, but also be detrimental to all 
consumers.
    Monopolies always create higher prices for the consuming public. 
They create even lower prices for those who must sell their 
commodities to the monopolies. Grain prices are already far below 
break-even.
    Farmers are going broke in our state at an alarming rate. Across 
the U.S., farm income is down by 70%. Depressed prices are ruining 
not only farmers but all small-town businesses. I urge you to 
conduct a more thorough investigation into the Cargill/Continental 
Sale before submitting a final judgment on this.
    Please give this your serious consideration.

      Sincerely,

Gerald Luin.
  

Litchfield, MN

    Roger W. Fones: Please do not let Cargill merge with 
Continental. Cargill is the most disliked name in Agriculture. 
Cargill don't respect other businesses. It thinks of Cargill's 
bottom line only. They are making massive amounts of money on 
farmers. In the mean time farmers are making record low profits. 
USDA census reports 50% of farmers in the U.S. are making a profit 
and 50% are not. They flood the market with livestock. I would 
rather see farmers produce the livestock. Wouldn't you? When I drive 
around my county I see empty livestock facilities everywhere. Rural 
America is getting very ugly. It is very depressing.
    Cargill also imports grain into the U.S. which floods our 
markets and this lower our prices. Cargill is giving up in South 
America to buy grain down there to flood the world with more grain.
    I know a very reputable grain elevator owner. He is furious with 
Cargill. He sells his grain to loading facilities on the river. He 
is faced to sell most of his grain to Cargill because of lack of 
competition. Cargill treats this elevator owner very poorly. Cargill 
close at 3:00, which doesn't allow much time to haul grain there 70 
miles away. There was also a problem with the size of the trucks he 
uses. They don't want him hauling there anymore. They are simply 
disrespectful people.
    Farmers could buy chicken manure from a large complex here. 
Cargill moved in and bought up all the manure and are not doubling 
the price for the manure. I am an organic farmer. I need to 
stockpile manure for six months. I called Cargill to see if I could 
pick it up myself and they said no.
    Cargill also got into the scrap metal industry recently. The 
scrap prices dropped to record low levels. Both of our scrap metal 
buyers are going out of business in one year. Is there a connection?
    I tried to buy a bag of salt and without the Cargill name on it. 
Six out of eight businesses sold Cargill band salt in my town.
    We heard that other countries get very poor quality grain from 
Cargill. These countries would like to try farmer direct to get 
better quality. We've tried to do that, but the facilities would not 
allow that. We need public facilities. Could the government buy 
Continental Grain? Cargill also has a negative impact on government 
for farmers.
    This company is getting too big. It doesn't respect other people 
in business. There is a lot of people trying to make a living in 
this country. It is unfair to let the big get bigger and the small 
independents get swept under the rug.
    I will not do business with Cargill, and I know many other 
people who also will not.
    It's time to realize bigness is hurting independent business in 
this country. This is making rural US.
    Please think PEOPLE BEFORE MONEY. It's time to regulate how big 
a company can get. It's our responsibility to secure our future for 
he young people who want to be independent.
    Thank you for reading my letter. Please do the right thing.

      Sincerely,

Scott D. Anderson.
  


    Mr. Roger Fones, Chief, Transportation, Energy & Agriculture, 
Antitrust Division, US Dept. of Justice, 325 Seventh Street, NW, 
#500, Washington, DC 20530.

Re: Final Judgment on Cargill's proposed purchase of Continental 
Grain

    Dear Mr. Fones: We are very opposed to this purchase! It will 
less competition and decrease prices for farmers. This is bad for 
all farmers who are not large agri businesses. We ask you to deny 
this purchase.

Rosie Seymour,
Superior WI 54880
Bob,
Superior WI 54880
Michael C. Cramey,
Foxboro, WI 54836
Connie M. Cramey,
Chaffey Rd, Foxboro WI 54836
Laura Cenley,
Superior, WI 54880
Janice Watten,
Duluth, MN 55805
Carol Stevens,
Superior, WI 54880

    Dear Mr. Roger Fones: As an independent agricultural producer, I 
strongly urge you to conduct a more thorough investigation of the 
Cargill/Continental Grain sale. Please extend the public comment 
period for another sixty days.

      Sincerely,

[no signature]
  

[FR Doc. 00-4591 Filed 3-23-00; 8:45 am]
BILLING CODE 4410-11-M