In the wake of a devastating drought that already has farmers and consumers looking to pay significantly more for grains and cereals, market analysts are nervously watching as a small conglomeration of corporations consolidate control over grain trading and grain markets,

Four major companies currently dominate the grain market (ADM, Bunge, Cargill, and Louis Dreyfus). These companies, along with top commodity traders Glencore and Marubeni, essentially control the cereal market worldwide. With prices already volatile after the devastating drought in the United States, consumers and farmers are worried that monopolistic tendencies will only help drive prices up.

“The increasing concentration of power in the global grain market is not healthy. This will lead to grain prices being controlled by top trading companies,” said deputy agriculture minister of Indonesia, one of the top wheat importers in Asia.

“So-called grain majors account for about 75 percent of the global grain market. If they keep on merging with other grain companies, there is the possibility of a monopolistic situation,” said Han Sukho of the Korea Rural Economic Institute.

Major grain traders, however, argued that this level of consolidation is necessary. According to the Chairman and CEO of Bunge, “We will have more consolidation because the market has shown that it is necessary to have large companies [with geographically diverse assets] to operate and serve the market in these volatile times.”

To learn more about agricultural financing opportunities contact a Farm Plus Financial representative by calling 866-929-5585 or by visiting www.farmloans.com.

Follow us on: Twitter

Written by: Justin Ellison / Farm Plus Staff Writer