WASHINGTON – In a recent letter, US Senator Elizabeth Warren and several other Democratic lawmakers asked the US Department of Justice to review the announced joint venture of Continental Grain Co., and Cargill to acquire poultry processor Sanderson Farms for $4.5 billion. 

Under the proposed terms, Sanderson Farms would merge with Wayne Farms, a subsidiary of Continental Grain.

Legislators expressed concern about the proposed deal and how it would shape poultry processing going forward. 

“This mega merger, in a sector already plagued with consolidation and illegal behaviors that harm farmers and consumers alike, represents a new threat to building a competitive agricultural industry,” the lawmakers said in the letter to Assistant Attorney General Jonathan Kanter, of the Antitrust Division.  “In light of these serious concerns, we respectfully urge the DOJ to scrutinize the proposed Sanderson-Wayne transaction to determine whether it violates the antitrust laws, and the DOJ should oppose the merger if it does.”

Wayne Farms responded to the letter from Congress arguing the positive benefits to the poultry industry.

“A combination of Wayne Farms and Sanderson Farms will create a new American competitor in the poultry industry, improving production and strengthening the US food supply chain at a time when doing so is critical,” the company said in a statement. “The combined entity plans to redouble investment in rural communities, which will help create new jobs and will offer American consumers more choices rather than fewer.”

Wayne Farms also reiterated that the new poultry company would be a 50/50 partnership between Cargill and Continental Grain.

“It will have its own board of directors and set its own strategy separate from that of Cargill and Continental Grain,” Wayne Farms said. “Cargill is also not a major player in the fragmented chicken feed market in the US.”

Wayne Farms said that price-fixing insinuations referenced in the letter were false and there have not been any indictments of Wayne or Sanderson Farms following government antitrust or price-fixing investigations.

In November 2021, Warren called on the DOJ to look at the practices that have raised poultry prices including some of the price-fixing allegations.   

Wayne Farms added the new poultry company would pursue hundreds of millions of dollars in new investments where it operates for years to come.

“The scale and speed of these new investments will be easier and will occur faster for a combined organization than for two standalone companies,” the company said.