Meat packing giant JBS USA getting millions in subsidies meant for farmers impacted by trade war
January 16, 2019
GREELEY — The U.S. Department of Agriculture plans to purchase $22.3 million of pork from Greeley-based JBS USA, which is owned by JBS SA, a Brazil-based company.
The purchase is part of a bailout program intended to provide aid to U.S. farmers negatively impacted by the international trade war. In November 2018, Smithfield Foods, owned by a Chinese firm, pulled its bid for $240,000 in pork payments after Sen. Charles Grassley, R-Iowa, echoed criticisms that the payment meant to help local farmers was going to an international firm.
The payments to JBS USA, totaling nearly 9.8 million pounds of pork for $22.3 million, have also drawn ire, due in part to the company's Brazilian roots. The Organization for Competitive Markets criticized payments to JBS through the trade mitigation program in a news release.
“It is a sad day when our own government will open its doors for global meatpacking corporations while keeping them closed during this government shutdown to America’s family farmers," the organization said in the release.
The petition calls on the USDA and Congress to halt the payments, citing a $5 million originally reported by the Washington Post. That $5 million only scratches the surface, as one of three contracts awarded to JBS USA. Other contracts include nearly $8 million for about 3.8 million pounds from the company's Marshalltown, Iowa, plant and nearly $8.9 million for about 4.3 million pounds from its Worthington, Minn., plant.
"JBS USA is proud to partner with U.S. family farmers and ranchers, helping create economic opportunity in hundreds of small, rural towns across our great nation each and every day," the company said in the statement. "As an approved vendor in USDA food purchasing programs, all eligible JBS USA pork products come from American livestock raised on American farms by U.S. family farmers, and are processed in American facilities in rural American towns."
Recommended Stories For You
At the company’s Greeley headquarters, JBS Carriers headquarters and a beef production facility, the company employs more than 4,000 people in Greeley, according to its website. Joyce Kelly, executive director of the Colorado Pork Producers Council and a Greeley resident, said to focus on JBS' Brazil headquarters is to over-simplify the complex protein market.
"On the outside, it looks like you've got a foreign company benefiting from this, but what people don't realize is that not only does JBS raise their own hogs, they contract with a lot of small farmers and small producers who raise hogs. And those people are American farmers who contract with them," Kelly said.
If that surplus pork isn't purchased, Kelly added, it could saturate the market, pressuring pork producers to lower prices in a way that would ultimately hurt the smaller, local producers. The Colorado Farm Bureau agreed the JBS payments would trickle down to support local farmers.
"We greatly support and appreciate the administration's efforts, as payments such as these will eventually pass down to local farm families," the Colorado Farm Bureau said in a statement. "This aid comes at a time when Colorado agriculture has dealt with some of the lowest commodity prices in recent years, severe weather and drought. It will go a long way to help weather this storm."
The company continues to rebound from corruption scandals in Brazil that brought company officials to pull a planned $500 million public offering on the U.S. stock market in 2017. JBS USA's Standard and Poor's credit rating was upgraded from BB- to B+ in October. In December, the company expanded a recall of raw beef from its Tolleson, Ariz., facility from nearly 7 million pounds to more than 12 million pounds. That recall marked another target for critics of the federal payments.
“While elected officials debate border security, JBS’ abusive takeover of the U.S. beef market and the resulting threat to our food supply should be at the forefront of the conversation. Instead, our government is handing JBS the taxpayer money meant for U.S. farmers,” the Organization for Competitive Markets said in its release.