U.S. antitrust targets seed, livestock, ag markets

WASHINGTON, Aug 7 (Reuters) - U.S. antitrust experts will
examine controls on how livestock markets operate,
concentration in the seed industry and transparency in
agricultural markets, a senior Justice Department official said
on Friday.

Deputy Assistant Attorney General Philip Weiser, in remarks
prepared for the Organization for Competitive Markets
conference in St. Louis, detailed areas that the Justice and
Agriculture departments plan to review in a series of public
workshops beginning in early 2010.

The workshops will examine the "buyer power" that results
when a few processors dominate a market, the impact on farmers
from vertical integration of agricultural production and
related topics like assuring markets operate openly.

Under the Obama administration, the Justice Department has
aggressively stepped up antitrust scrutiny of competition in
the telecommunications, pharmaceutical and high tech
industries.

Weiser said an "important area to review" is the 1921
Packers and Stockyards law intended to assure fair prices and
competition in livestock sales.

"We are interested in learning whether the controls of the
(law) are relevant to the way businesses are run today and
whether the law is being implemented effectively to promote
competition," he said.

Earlier this year, Brazil's JBS (JBSS3.SA) abandoned a plan
to acquire U.S. meat company National Beef Packing Co. after
U.S. antitrust authorities sued to halt the deal. The Justice
Department argued it would create the largest U.S. beef packer,
slaughtering about 35 percent of U.S. cattle, and reduce the
price that slaughterhouses pay cattle ranchers.

The Justice Department's antitrust already "is keeping a
close watch" on livestock markets, he said.

Another area to be examined is concentration in the corn
and soybean seed industry, the dairy market and the livestock
market, and whether new companies are able to enter those
markets easily. Monsanto Co (MON.N) and DuPont Co (DD.N) are
among the biggest U.S. seed makers.

"Competition is frequently local or regional in nature,
meaning that the nature and extent of competition-related
concerns will differ across different parts of the country and
that broad national statistics can be misleading," Weiser
said.

Transparency in the overall agricultural market is also of
interest to antitrust experts.

"Some have suggested that trading in agriculture markets
has shifted from organized exchanges to a greater reliance on
vertical integration and bilateral trading," he said. "To the
extent that these changes in trading raise any competition
concerns, however, we will welcome suggestions and strategies
for promoting greater levels of transparency."

A U.S. Senate panel last month issued a report blaming
commodity index funds for driving up wheat futures prices so
high last year that it became impossible for grain firms to use
Chicago Board of Trade contracts to hedge their purchases.

During his election campaign, President Barack Obama said
his administration would strengthen fair-play laws by steps
like a regulatory definition of unfair pricing. He said family
farmers should have fair access to markets and supported a ban
on meatpackers raising cattle in competition with farmers.

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(Reporting by Julie Vorman; Editing by Marguerita Choy)