We believe Congress should continue to monitor the agriculture industry for antitrust abuse. Two major developments have occurred in recent months that bring me here today to discuss this issue. First was the announcement that Cargill was contemplating the purchase of the Continental Grain Division. Second, is the impact of the devastatingly low prices for hog farmers and the structural changes facing the livestock industry as a result. First and foremost, farmers are concerned about the impact on local competitiveness.
Price discovery is an important component of our free market system.
It takes place at each stage where the ownership of commodities changes hands. Prices are influenced by the interaction of supply and demand forces at each local or regional area which, in turn, are influenced by supply and demand conditions as the commodity moves closer to the ultimate consumer, either domestic or international. We suggest that this should be an important focus of inquiry in the government review. Another area of concern is the potential impact of the merger insofar as it affects the delivery points of grain and soybeans. Delivery is the process where the futures price and the cash price must converge.