HOGGING THE PROFITS - Foodopoly: The Battle Over the Future of Food and Farming in America - page 106

Smithfield continued devouring competitors in both the production and processing industries, and it
ventured into other meats. The number of acquisitions provides a sense of the company's voracious ap-
petite for controlling the industry. They include: Valleydale; John Morrell; Lykes Meat Group; North Side
Foods; Moyer Specialty Foods; Packerland Packing; Stefano Foods; Farmland Foods; Cumberland Gap
Provision; Cook's; Armour-Eckrich; Butterball; Murphy Farms; Vall, Inc.; Alliance Farms; MF Cattle
Feeding; Five Rivers Feeding; and, finally, Premium Standard Farms.
It is known for its dirty tactics. When it announced the intention to purchase Murphy Farms, then
Iowa attorney general Tom Miller sued Smithfield for violating the state's corporate farming law, which
strived to prevent monopoly ownership. 22 Rather than delaying the merger, Smithfield and Murphy Farms
blatantly concocted a sham transaction to transfer ownership. Murphy sold its Iowa assets to former man-
ager Randall Stoecker, who in turn established a corporation called Stoecker Farms. As the sole officer
and shareholder, Stoecker received a loan of more than $79 million from Murphy Farms to acquire the
Iowa assets. His only payment was in the form of two promissory notes, which deferred most of the debt
for ten years. Immediately afterward, Murphy transferred all of its remaining, non-Iowan assets to Smith-
field—including control of Stoecker's finances—in effect giving Smithfield complete control of what had
been Murphy Farms' assets.
Through the use of two lawsuits, Smithfield successfully overturned Iowa's corporate farming law,
which prohibited vertical integration through the ownership of livestock by packers. In 2005, during the
time the second lawsuit was being appealed, Smithfield reached a settlement with the state's attorney gen-
eral. 23 Miller agreed not to enforce the law against Smithfield, and Smithfield in turn gave $1 million a
year over ten years—a paltry amount that a major corporation considers the cost of doing business—to
fund a ten-year environmental training program and $240,000 over four years to fund scholarships at Iowa
State University. Smithfield also agreed to pay $100,000 annually for ten years to fund “innovative” hog
production. So it goes with companies that have tremendous resources and political power.
In 2006, when Smithfield announced its intention to buy the nation's second largest pork company,
Premium Standard Farms, the alarm bells started ringing. A September 19, 2006, press release from Iowa
Republican senator Chuck Grassley said that the United States needs family farmers and independent pro-
ducers to make the free and open market system work, and that expanded packer ownership of hogs, ex-
clusive contracting, and captive supply are all adversely affecting their ability to compete in the market-
place. Grassley stated:
I cannot fathom how Smithfield, which is the largest and fastest-growing integrator, can continue to be allowed
to purchase hog operations across the country. Over the last several years Smithfield has made it perfectly clear
that it intended to purchase its competitors to assert its dominance in the pork industry. This is alarming. I expect
the Justice Department to take a serious look at this merger. 24
The Department of Justice Antitrust Division, the agency responsible for enforcing the nation's compet-
ition laws, did take a look, but unfortunately it rarely finds the courage to say no to a merger. In 2007, the
agency announced it would allow the merger to move forward. Grassley concluded: “It looks like nobody's
going to stand in the way of all this vertical integration until we've just got one meatpacker in the country.
Maybe then the Justice Department will figure out we've got a problem.” 25
Butt Smithfield was not getting a free ride in Iowa: Iowa Citizens for Community Improvement (ICCI),
based in Des Moines, has been fighting back. Four Catholic priests, including Joe Fagan, now a former
priest, originally formed ICCI in Waterloo, Iowa, in 1975 as a secular social justice organization. Pur-
portedly retired, Fagan is still a crackerjack activist and was recently lambasted by the right-wing blog
Uncoverage: The Right Idea for questioning a Republican presidential candidate at a public meeting about
his views on privatizing Social Security.