NIXON AGAINST MERGER

The U.S. Department of Justice should reject a proposed merger between two grain companies because it would be bad for Missouri farmers, state Attorney General Jay Nixon said Monday.

Nixon said Cargill Inc.'s plan to buy Continental Grain would reduce competition that would hurt grain farmers in the Missouri Bootheel.

"It is bad for competition and bad for our country," he said.

Cargill officials at the company's corporate office in Minneapolis couldn't be reached for comment. A storm that knocked out telephone service at the Southeast Missourian Monday afternoon hampered efforts to reach the company.

In a letter to the Justice Department's antitrust division, Nixon said the merger would give Cargill control of the Continental Grain Cottonwood terminal on the Mississippi River near Caruthersville.

"In the Southeast Missouri market, the new Cargill would have the power to control or artificially depress the prices farmers get for their grain," he said.

Nixon said the merger would reduce from four to three the number of grain buyers at Mississippi River terminals in the New Madrid and Caruthersville areas.

Cargill and Continental combined handle 6.61 million bushels of grain on the Missouri side of the river, between Buffalo Island, at the confluence with the Ohio River, and Cottonwood Point, south of Caruthersville.

The remaining two competitors, Bunge Corp. and Consolidated Grain can handle 5.29 million bushels.

Nixon said a merger of Cargill and Continental would leave the new company with control of at least half of the market and "dangerously reduce" the level of competition for river barge transportation.

Cargill already is the "dominant competitor" in the area, Nixon said.

Cargill owns two of the four biggest river terminals, and the only two large railroad-truck terminals in that market.

"The Bootheel is uniquely vulnerable because of the fact that the barge traffic is the significant and primary method of moving grain to market," the attorney general said.