JBS's winning hand in securing one quarter of all pork salvage contracts is one example of the power that few multinational meat companies now have in the United States. JBS has become a major player in the United States, even as it faces pricing and other investigations by the federal government.
The company's explosive growth through acquisitions over the last decade has been a dominant factor in the consolidation of the meat industry.
Ten years ago, JBS does not own any American meat-packing plants. Today, JBS and three other food companies control about 85 percent of beef production. JBS and Tyson Foods control about 40 percent of the poultry market. And JBS and three other companies control nearly 70 percent of the pork market.
JBS and major multinational meat companies, including Tyson Foods, Smithfield Foods and Cargill, use their size and global presence to create efficiencies that allow them to produce a variety of quality foods at a lower cost. But many agricultural economists and food market analysts say that when few companies control the market, they can drive out smaller operators from the business, reducing competition and sometimes raising prices for consumers.
Applicants have other concerns, including threats to the availability and accessibility of the nation's food supplies. Big food companies in the past have reduced supply to increase the price of their products. The Justice Department is investigating whether JBS and other poultry companies have illegally coordinated to do just that.
JBS says this is a vital part of the agricultural economy; the company employs over 60,000 people in the United States and buys from more than 11,000 American farmers and ranches. The company and Agriculture Minister Sony Perdue say the JBS rescue funds help American farmers because the company buys their pigs from them.
JBS CEO Gilberto Tommasoni told analysts in August that JBS was "at its best in its history." He said the upcoming US stock offering would allow the company to continue expanding; JBS says expansion efforts "will improve the company's position to sustainably meet evolving customer and consumer expectations."
However, US sensors Marco Rubio (R-Fla.) And Robert Menendez (DN .J.) Were recently challenged as to whether JBS's entry into the US market should have been allowed.
Corruption scandals hit JBS in Brazil, senators wrote to Treasury Secretary Steven Mnuchin, and company officials "admitted criminal conduct in securing loans used to invest in the United States." "They asked for a purchase review.
JBS stated that had received all the "necessary regulatory approvals from. , the antitrust authorities, including the Ministry of Justice "before buying each of the companies.
Small farmers and livestock farmers are glad some politicians are listening. They say the federal government's bailout – and JBS's share in it – is reminiscent of of saving banks during the 2008 financial crisis. Although many of the banks have been investigated by the federal government, they still receive federal money.
"I think this is one of those situations where is too big, but to fail, "says Greg Gunthop, who runs his family's pig farm in Indiana." We're talking about a company that has shown it's not playing by the rules. "
JBS bought its first American local factories in 2007, using Brazilian bank loans, owners illegally secured, court records show, In a plea agreement, brothers Josley and Wesley Batista told prosecutors they were bribing low-interest bankers and government officials.
Bank loans and other financing allow JBS to consolidate five US companies – which produce pork, poultry and beef – into a single company, JBS USA.
In 2007, JBS purchased the pork and beef producer Swift and Co. In 2008, it purchased the beef production from Smithfield Foods. In 2009, she acquired poultry producer Pilgrim's Pride. In 2015, JBS purchased Cargill's Pork Division. And in 2017, the company purchased the poultry producer GNP Co.
"JBS uses its malicious profits to dominate the meat market," says Joe Maxwell, a fourth-generation porcine farmer and executive director of the Nonprofit Competitive Markets, which fights income disparities US agricultural markets. The loans, Maxwell said, "allowed them to become large dogs almost overnight."
JBS said it did not dispute the plea agreement, but said it also raised capital by selling shares in the company.
Rescue payments highlight JBS's advantage over smaller, local competitors. Some of its pig farms kill more than 1,000 pigs an hour, which enables JBS to operate at a lower profit margin and undermine other rescue companies.
JBS is also able to displace production to avoid high tariffs. While US pork exported to China faces a 72% tariff, Brazil's JBS pork stands at only 10 to 12 percent.
JBS increased production where tariffs were lower, benefiting twice from the Chinese trade war – first by raising salvage money and then by increasing the production of pork at its plants outside the United States, which JBS announced this year.
JBS is growing and flourishing despite numerous federal studies. The Department of Agriculture said last year JBS paid family farmers and livestock farmers to three slaughterhouses in Colorado, Nebraska and Texas, claiming the cattle weigh less than them.
Livestock producers claim that the fine is an insult to small twigs. "It's a penny," said Steve Krycek, an independent cattle producer who sells to JBS. "They make over $ 1 million a day at Nebraska plants. It's not even enough for them to blink an eye or review how they do business. "
The growth of JBS has not been delayed by on-air fines for workers' safety violations – about $ 20 million over the last decade by the US Occupational Safety and Health Administration.
An analysis by the Washington Post of OSHA data from 2015 to 2018 shows that JBS has the highest rate of serious worker injuries – including those involving amputation and hospitalization – among U.S. meat companies and the second highest the rate of serious injury among all companies in the United States.
JBS declined to comment on the $ 79,000 fine and the rate of injury to its workers. Consumer Concerns Consolidation can bring benefits to consumers.
Trey Malone, an agricultural economist at Michigan State University, said consolidation has led to lower prices and the explosion of new foods. The average grocery store in 1995 had about 8,000 options. Now that's over 45,000.
"When companies get bigger, you get economies of scale. Unit production costs are down, "Malone said. "Companies are increasingly competing at quality levels, offering hormone-free, Angus beef. They create new products. From a consumer perspective, you have higher quality meat and cheaper meat products. "
But the small number of major players increases the ability for companies to negotiate price increases," said Malone and other economists. A lawsuit filed in 2016 by a New York-based food service firm claims that the ownership of JBS Pilgrim & # 39; s Pride and other poultry companies intentionally destroyed breeding flocks to reduce the supply of poultry.
Coordinated efforts resulted in a 50 percent increase. wholesale broiler chickens, the case alleges. The civil suit has been detained while the Justice Department is investigating.
"This is a consumer disaster because of the amount of power, money and political influence that these companies have," says Marion Nestle, a New York University professor who studies the food industry. "If you own everything, you have to set the rules, you can set the price because there is no real competition."
JBS declined to comment on the pricing investigation. Attorneys for Pilgrim's Pride and other poultry companies filed a motion to dismiss in January.
With several large operators, contamination with meat can pose a greater threat as their products end up on plates all over the country. Retail giants Costco, Walmart and Sysco sell JBS products.
For example, in 2018, JBS ordered the largest download of minced beef in U.S. history, according to the US Centers for Disease Control and Prevention. About 12 million kilograms of beef
contaminated with a virulent strain of salmonella in 30 states have affected 403 people, of whom 117 have been hospitalized. Less than 2 percent of meat was recovered.
"They can cause a major food safety disaster," says Tony Corbo, senior lobbyist at Food & Water Watch, a consumer protection group. "These plants are bigger, they are turning into faster products, and the federal government is deregulating them, giving plant owners more control over safety checks."
JBS said it was responding quickly through issuing the download. The company said it was working with "internal and external food safety experts" to "ensure the safety of our products".
Small cattle ran a social media campaign in October at a rally called "Stop the Stealin" "In protest at the power of JBS and other large beef processors over bidding for cattle. Ranchers said JBS declined to comment on ranch complaints.
About 400 cattle and women attended a rally in Nebraska – some rode on horseback. The younger ranches downloaded the Twitter app on older smartphones ranches, teaching them how to tweet, though
"Stop the collusion !!" tweeted Casey Perman, a small ranch in South Dakota. "It's time to help the little boy, as you promised.,, #FairCattleMarkets @realDonaldTrump."
Ranches and some Democratic members of Congress argue that the concentrated power of these companies gives them too much leverage over federal regulators. "These multinational corporations are taking over food supplies, and the federal government is complicit in this; The USDA is complicit in this, "said reporter Rosa L. Delara (D-Conn.)
After entering the US market in 2007, JBS has spent more than $ 7.7 million in lobbying, records show. making it the fourth-largest expense in the meat industry, and has also won more than $ 900 million in government meat contracts that were outsourced to US-based Tyson Foods alone, according to a Washington Post analysis of government records.  Achieving companies in the federal government involves successfully hiring you US regulators., JBS created a new position – Global Head of Food Safety and Quality Assurance – in 2017, giving the position of former highest USDA food safety regulator named Al Almanza.
At USDA , Almanza has been viewed by smallholder and food safety groups as an advocate for large producers; it leads the deregulation efforts of poultry, pork and beef inspections sought by JBS and other large companies. Three days after leaving the USDA, Almanza launches at JBS.
In a statement, JBS stated that Almanza "strongly disagreed with any opinion that he had an interest in increasing profits in the industry over public health during his public service career."  Maxwell also focuses on Secretary of Agriculture Perdy and the bailout he gave to JBS, The Small Ranch Campaign spreads a political cartoon of JBS Perdley and Wesley Batista in bed with Perdu throwing cash stacks.  Andrei Ba Tran and A IS Krits contributed to this report.