Divestitures necessary to preserve competition in Ardent Mills JV, rules US Justice Department
ConAgra Foods, Cargill, CHS and Horizon Milling must divest four “competitively significant” flour mills in order to proceed with the creation of their milling joint venture, Ardent Mills.
The US Department of Justice announced its decision last week, saying the divestitures will preserve flour milling competition in four regions of the country including Los Angeles, Dallas, Minneapolis and the San Francisco/Oakland Bay Area, and ultimately lower prices for consumers.
The department’s Antitrust Division filed a civil antitrust lawsuit on May 20 in the US District Court for the District of Columbia to block the proposed joint venture and also filed a proposed settlement that, if approved by the court, would resolve the competitive concerns alleged in the lawsuit, according to a statement.
“Without the Antitrust Division’s required divestitures, the creation of Ardent Mills would have resulted in less competition in the sale of wheat flour, resulting in customers, such as industrial bakers and food service companies, paying higher prices for wheat flour and ultimately consumers paying more for products,” said deputy assistant attorney general for the Antitrust Division, Renata B Hesse.
The statement will now be published in the Federal Register and will be followed by a grace period of 60-days when respondents can submit written comments. At the conclusion of the 60-days, the US District Court may ratify the proposed settlement if it is deemed to be in the public interest.
Positive outlook for UK wheat harvests
The US Department of Agriculture has forecast an increase in UK wheat production to 15.15m tonnes this year, thanks to a 20% revival in sowings - to 19.5m hectares - and a 6.0% rise in the yield to 7.77 tonnes per hectare.
The UK is the EU’s third largest wheat producer but harvests continue to suffer the after-effects of the country’s second wettest year on record in 2012, which destroyed crop quality and severely hampered autumn sowings.
As a result, UK imports reached a three-month high in March as home-grown supplies struggled to meet domestic demand.
Custom’s data confirmed the UK imported 126,201 tonnes of grain in March – 54% more than in February – following last year’s smallest harvest in a decade (of 11.92m tonnes).
Nevertheless crop quality is improving, according to traders, and all the signs point towards a revived harvest and improved competitiveness in 2014.
French farmers ease tension with drip irrigation
Corn farmers in the Verdant plains of South Western France are employing drip irrigation techniques to limit the effects of water shortages on harvests.
Tension has been mounting in the region over water rationing imposed to counteract depletion of resources by water-hungry corn, which is a major crop in the area. Breeching the rationing orders can result in hefty fines and with too little water to go around drip irrigation is an expensive but effective alternative.
Farmers using the technique – where water is supplied directly to crops via perforated pipes buried close to their roots - have reduced water use by 40% and fertilisers by 20%.
France's National Research Institute of Science and Technology for Environment and Agriculture (IRSTEA), which has been testing a drip irrigation system in southern Montpellier since 2008, estimates the savings at between 15-20%.
Despite the advantages only 1,000 hectares of France's total 1.8 million hectares of agricultural land use drip irrigation. The technique is widely used in the US and Italy.
Canadian funding to expand corn production
Agri-food giants Cargill, Viterra and Canadian firm Richardson are expected to invest a combined $13m to boost grain research, production and processing in Canada’s major wheat and corn growing province of Manitoba over the next five years.
Federal Agriculture Minister Gerry Ritz announced the creation of a "grain innovation hub" earlier this month, involving a $33m package of funding for research and development that will take place in university labs and private-sector facilities.
Initial research will focus on expanding corn production to new areas of Manitoba and on projects to stimulate the development of new food and pharmaceutical processing plants in the province.
The funding aims to placate controversy in the region following federal decisions to end the Winnipeg-based Canadian Wheat Board’s monopoly on wheat and barley marketing and close the University of Manitoba’s Cereals and Research Centre in 2012.
Karachi millers cement bags scandal
Millers in Pakistan are allegedly selling flour in reused cement bags, despite the risks to consumers’ health, according to national newspaper reports.
A random survey carried out by financial daily Business Recorder discovered several flour millers indulging in the unlawful act of selling wheat in recycled cement bags.
One wheat grower admitted that millers were tempted into buying used cement bags at very low prices from cement factories, however all the millers approached denied any involvement.