Minnesota AG Keith Ellison preaches antitrust authority at MFU discussion
Minnesota Attorney General Keith Ellison explained at a June 15 meeting with Minnesota Famers Union members that his office is addressing market consolidation, price gouging and right-to-repair legislation.
ORONOCO, Minn. — Agricultural markets are becoming increasingly consolidated, to the detriment of farmers.
To convince farmers they had an ally in the state's attorney general, Minnesota Attorney General Keith Ellison reported on recent activities by his office to address market consolidation, price gouging, right-to-repair legislation and more at a roundtable organized by Minnesota Farmers Union June 15 at the People’s Energy Cooperative in Oronoco.
"We had the attorney general, and Commissioner Patrice Bailey from the Minnesota Department of Agriculture, and a group of farmers who are motivated to come down and talk about the need for competitive markets, and for fairness in our economy," said Stu Lourey, MFU's government relations director.
Lourey said it was market consolidation that led to the founding of the Farmers Union in 1902, when a cooperative of farmers realized their suppliers were consolidating. That consolidation led to them not getting a fair price for inputs and products they sold.
"That was not a sustainable model for them, so they started forming cooperatives and fighting for antitrust reform, so that's in our blood," said Lourey of the Farmers Union.
He said the disruptions from the pandemic to the processing industry and food supply chains are still reverberating, presenting an opportunity to confront consolidation issues.
"Consumers, legislators and the general public realize that markets that aren't fair for farmers, aren't fair for consumers, and they aren't fair for workers either," said Lourey. "There's a new consensus around building an economy that's more distributed, more resilient and more fair for farmers and everyone else."
The farmer's share
According to the MFU website, four companies control 85% of beef packing, 85% of seed corn production and 84% of the pesticide market. The farmer’s share of every dollar that consumers spend on food has fallen from 50% in 1952 to less than 16% today, according to MFU.
Mike Frost farms in Pine Island with his wife and son, raising grains and beef on land that Frost's great-grandfather homesteaded in 1855 and his grandfather milked Holsteins starting in 1913. Frost purchased the farm from his father in 1996 and transitioned to raising beef and focusing on soil health in 2004.
Frost said he attended the MFU meeting to hear Ellison talk about what his office was doing to combat market consolidation.
"Basically it's four companies that control beef packing, and it's putting the farmer at a disadvantage," said White, who has been a member of MFU for around 15 years. "I've often said, what makes America great is competition."
White, who's raised both Angus and Highland breeds, said that market consolidation in the beef industry doesn't really affect his operation because it's smaller scale.
"We're just a small operation, and kind of do it for ourselves, but maybe trying to grow," said White. "But right now, crops are more profitable."
He said he's been learning more about antitrust history, and how U.S. antitrust law got underway with the Sherman Antitrust Act and with President Teddy Roosevelt's trust busting campaigns at the turn of the century.
"We forget about all those things he did, and slowly things can go the other way, especially if people are making profits," said White.
Ellison said that his office will "continue to work with, and organize legislation at the state legislature to devote more resources to tracking and understanding the risks of consolidation" in Minnesota.
"So we can develop the tools to fight this scourge," he said.
Ellison said their antitrust division has added two full-time lawyers focused on antitrust, along with support staff to help with the work.
"And we're not done and are going to continue, because we need to get bigger in this area," said Ellison.
Funded by MFU, the AG's office also has a law clerk on staff, but Lourey said MFU has no control of what the law student is assigned to work on.
"We're not directing their work, and we don't know who they are until they're hired," he said of the position. "But what we're excited about is that it's in an office that's passionate about antitrust and that's effective on antitrust action."
Fighting consolidation has been a priority for Ellison, and in February, he joined an antitrust lawsuit to stop Minnetonka-based UnitedHealth Group from acquiring Change Healthcare in a deal worth $13 billion. In a statement, Ellison said the anticompetitive effects of the deal mean consumers "could see lower-quality service and higher costs from significantly reduced competition."
"We're talking ag here, but last I heard, everybody needs health care, especially folks in rural communities," said Ellison.
In a December 2021 letter to USDA Secretary Tom Vilsack, Ellison and a bipartisan coalition of attorneys general from Midwestern states raised concerns about the increasing market concentration in meatpacking. The letter offered solutions to aid USDA in efforts to strengthen enforcement under the Packers and Stockyards Act.
The following month, the White House announced a variety of initiatives to improve competition in the meat processing industry, issue stronger rules under the Packers and Stockyards Act and better coordinate antitrust efforts between the U.S. Department of Agriculture and the U.S. Department of Justice.
"The Biden administration is listening," said Ellison of the initiatives, which his office is submitting comments on.
He said his office also plans to tackle right-to-repair legislation.
"The way business is structured now, we've essentially eliminated repair shops," said Ellison on right-to-repair. "You buy a product, then you have to go to that manufacturer, and that could be a John Deere tractor or an Apple phone — this is a unreasonable restraint of trade, and we're fighting against it."
Controlling the markets
The practice of price gouging is a "hole in Minnesota law," said Ellison, and it's something his office is aware and concerned about.
Bruce Olson, who farms near Red Wing, shared with Ellison the issue he had with high fertilizer costs. Olson said that he's paying three or four times more for fertilizer than he was three years ago.
"I noticed that the last time the price of commodities went up, fertilizer went up. So I assume it doesn't have any real value, but it's just a matter of what they can get from us," said Olson. "Which is kind of ripping us off, and I mean, we're happy that we've got better prices right now, but they're just taking it away from us."
In response to Olson, Ellison said high input costs are the result of price gouging more than having to do with market disruptions.
"The CEOs of these companies that are sharing information with the shareholders are like, oh, we're doing gangbusters. Inflation has been good for us," said Ellison. "This is price gouging."
Minnesota is one of 13 states that doesn't have a price gouging law, said Ellison.
"These folks are taking advantage of the situation and saying it's inflation, or it's Putin's doing — they're blaming anyone except for themselves," said Ellison. "(Companies) saying we don't set commodity prices — yes they do. They've got such huge market control that of course they can move the market."