Organic Consumers Association

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Don't Look, But a Couple of Mega-Companies Are About to Take Over Your Food Supply

A rumored marriage between two ag behemoths could make life tough for farmers in a whole new way.

Farmers—especially the ones who grow the corn and soybeans that churn through our food system and fuel our country’s penchant for hamburgers and bacon—are in a tight spot. For seeds, pesticides, and fertilizers, these growers depend on a tiny number of companies that have enormous leverage to raise prices. And when they’re ready to market their crops, they’re confronted by another handful of powerful grain-trading firms, who in turn have leverage to keep prices down. 

These companies are merging into bigger and more powerful entities. The Department of Justice is currently mulling a proposed merger between seed/pesticide giants Monsanto and Bayer, which would further shrink farmers’ options for buying inputs. And now a new tie-up between agribusiness titans looms. The grain-trading behemoth Archer Daniels Midland is pushing to take over rival Bunge, the Wall Street Journal recently reported, citing unnamed sources. 

Neither company has commented on the story, but investors appear to be taking it quite seriously. ADM’s share price has jumped about 10 percent since the Journalreport, while Bunge shares are up 15 percent

If ADM and Bunge do hook up, the marriage will represent the latest episode in an extraordinary spasm of consolidation in agribusiness markets that began in 2015, when Dow and DuPont announced their intention to merge, ultimately creating a combined seed/pesticide unit that’s roughly the size of its biggest current rival, Monsanto, in annual sales. Since then, Swiss pesticide/seed player Syngenta has been bought by the Chinese chemical colossus ChemChina, fertilizer giants Agrium and Potash Corp of Saskatchewan have merged into a new mega-player called Nutrien, and, of course, Bayer bought Monsanto—a deal that still awaits regulatory approval in Europe and the United States.

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