Ted “Mr. Cotton” Cruz goes after Monsanto-Bayer
Did you hear the one about the agriculture secretary, senator and ag committee chairman who walked into a John Deere dealership in Lamesa?
I did. It was as humorous as it was surreal.
The senator grabbed a mic and raised concerns that Monsanto Co. and Bayer AG were operating antitrust, seedy monopolies — and he made the comments just 65 miles away from Monsanto’s new 500,000-square-foot, $140 million cottonseed processing plant in North Lubbock and Bayer’s rather new $14.3 million Plant Science Building at Texas Tech.
Cotton is the fabric of our lives — and the foundation of our regional economy. Within a 100-mile radius of Lubbock, the cotton industry has a $5 billion annual economic impact. Given the the region’s prominent role in U.S. cotton production, it made sense for Monsanto to choose the Hub City two years ago. The massive facility is nearing completion today.
However, cotton prices have slipped some 25 percent on average over the past three years; over that duration of time, cotton has been the only ag commodity not covered by a farm bill.
Cotton’s plight and the region’s importance to the industry prefaced last week’s historic visit by Secretary of Agriculture Sonny Perdue, Sen. Ted Cruz of Texas and House Agriculture Chairman Mike Conway of Midland. No one can recall three such high-ranking officials visiting West Texas together at the same time.
A crowd of 500-plus packed the Southwest Council on Agribusiness event to eat chicken fries and listen to remarks in a wide open tractor shop. From a flatbed trailer stage, each official addressed the need for a new farm bill and initiatives to mitigate losses by cotton growers in the meantime. Strategies like designating cottonseed as an oilseed and implementing a ginning cost share program. Cruz goaded Perdue to announce both programs, Perdue dared Cruz to fund both, and Conaway challenged them both to pass a new farm bill before the 2018 general election, while Conaway still has the votes.
But the event became more newsworthy in the question-and-answer session. A young, bright FFA member boldly asked the powerful panel what could be done about the escalating costs of cottonseed in markets dominated by Monsanto and Bayer.
Her question is being asked all across the cotton industry at present. The two companies combined to compose 58 percent of all upland cottonseed planted in 2016, and seed prices from the large market providers have increased approximately 18 percent over the past three years. Moreover, the two companies own some 80 percent of technological seed traits, which they license out to smaller competitors. And the kicker: last year Bayer offered $66 billion for Monsanto. That deal is expected to be finalized in early 2018. Critics fear the deal will result in jacking up seed prices another 18 percent.
With this context and the young lady’s question, Cruz, unexpectedly, spoke up in his signature nasally bravado.
“Federal antitrust laws exist to constrain abuses that are contrary to the free market,” the junior senator overviewed. “And if you have companies that are exercising monopoly powers, abusing monopoly powers and charging monopoly prices, the federal government has heckuva authority to address that.”
You could’ve heard a plastic fork drop.
“And this was the concern with Monsanto-Bayer that I’ve raised in Senate Judiciary Committee previously — precisely this question — that we have the antitrust laws for a reason, and they need to be enforced faithfully and vigorously,” he said to rapturous applause.
(Note: Monsanto was given opportunity to comment, but chose not to respond directly to Cruz in this column.)
Over the last year, it’s plain to see that Cruz has been diligently rehabilitating perceptions — many of which derive from his previous voting record — that he is an adversary to agriculture. As one grower at the event told me through an ornery grin, “We’re gonna start calling him Mr. Cotton.” A clever concession that Cruz is clearly trying.
In this, the Monsanto-Bayer antitrust concern is a winning issue for Cruz, a former head of policy at the Federal Trade Commission, as it allows him to maintain conservative think tank footing while appealing to a populist base. And it’s likely to become a major asset to his turnrow transformation going forward. Particularly if cotton isn’t brought into a farm bill in the next 12 months and input prices do, indeed, escalate after the Monsanto-Bayer deal is complete.
But what remains an open question is if Cruz will finally vote for a farm bill. After all, concerns about input costs assume there’s an American agriculture infrastructure in which it’s worth planting seeds. Time will tell.
After the event, I asked him if he intends to offer legislation against Monsanto-Bayer.
“It’s an issue I intend to continue pressing forward,” Mr. Cotton replied.
This column first appeared in the Lubbock Avalanche-Journal