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Federal Register / Vol. 86, No. 108 / Tuesday, June 8, 2021 / Notices with Itochu Corporation. In addition to the export terminals, Bunge will retain ownership interests in eight elevators in Illinois and Indiana.

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IV. The Relevant Markets 13. The livelihood of farmers depends on their ability to sell the corn and soybeans they grow to purchasers who offer them the best price, net of transportation and other selling costs that farmers incur. Ethanol plants and feed and crush mills purchase grain and process it into usable products such as soymeal or fuel. Rail and river elevators also purchase grain and store it until it is sold and transported to end users, in either domestic or export markets.
14. For convenience, some farmers may sell their grain to smaller, country elevators, located in closer proximity to the farmer than end users or rail and river elevators. Such elevators serve as grain collection and buying points in rural communities, and may provide other services like grain storage, drying, and conditioning services. Upon aggregating sufficient quantities of grain, or when market prices are most attractive, country elevators ultimately resell the grain to end users or to the larger rail or river elevators that can transport the grain to end users or export elevators.
15. More than 45% of the grain exported from the U.S. is shipped out from port elevator export terminals located at the mouth of the Mississippi River near the Gulf of Mexico. The vast majority of this grain is sourced from river elevators located along the Mississippi and its tributaries. These river elevators, found as far north as Minnesota, purchase grain from surrounding farms, and load it onto barges for transport to the port elevators.
A. Relevant Product Markets 16. ZGC mainly through CGB and Bunge own grain elevators, primarily located at rail terminals and along navigable rivers. They compete with other grain purchasers, including ethanol processors, feed mills, and crush processors, to purchase corn and soybeans from U.S. farmers, brokers and country elevators. Corn and soybeans are each distinct products without reasonable substitutes, differing from other agricultural commodities and one another in their physical characteristics, means of production, uses, and pricing.
Because of the length of growing seasons, and the suitability of corn and soybeans to certain climates and regions, farmers of these crops would not switch to production of other agricultural commodities in sufficient numbers to render unprofitable a small
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but significant decrease in price by a hypothetical monopsonist of that crop.
The purchase of corn and the purchase of soybeans for end use or for sale to the export market each constitute a relevant product market and line of commerce under Section 7 of the Clayton Act, 15
U.S.C. 18.
B. Relevant Geographic Market 17. Farmers typically haul grain by truck to nearby elevators or end users.
Transportation costs increase significantly with every mile the farmers must transport the grain to reach a purchaser, reducing the farmers profits.
Transporting grain also consumes farmers time. For these reasons, a small change in price would not likely cause farmers to significantly expand the distance they are willing to drive to sell their grain. The distance a farmer is willing to drive is determined in large part by the second-closest potential purchaser, which is the best competitive threat to the purchaser closest to the farmer.
18. Rail or river elevators and other grain purchasing facilities, such as grain crush plants and ethanol plants, typically purchase grain from within the facilitys draw area. Draw area is an industry term that describes the locations of farms from which the facility expects to acquire most of its grain. Each elevator or end user has a unique draw area due to characteristics such as surrounding road conditions, crop output, local topography, and proximity of competing purchasers. The draw area of a grain purchasing facility is determined by transportation time and costs and so is usually very localized.
19. The draw area of one grain facility frequently will overlap with that of another, resulting in competition between the facilities to purchase grain from farmers. Some farming areas of the country may be located such that they fall within the overlapping draw areas of only a few competing grain purchasing facilities. In particular, in the following areas where the Defendants river elevators have overlapping draw areas, there are only a small number of grain purchasers competing to purchase farmers corn and soybeans:
a The overlapping draw areas of elevators in the vicinity of McGregor, Iowa;
b The overlapping draw areas of elevators in the vicinity of Albany/
Fulton, Illinois;
c The overlapping draw areas of elevators in the vicinity of Shawneetown, Illinois;

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d The overlapping draw areas of elevators in the vicinity of Caruthersville, Missouri;
e The overlapping draw areas of elevators in the vicinity of Huffman, Arkansas;
f The overlapping draw areas of elevators in the vicinity of Osceola, Arkansas;
g The overlapping draws areas of elevators in the vicinity of Helena, Arkansas;
h The overlapping draw areas of elevators in the vicinity of Lake Providence, Louisiana; and i The overlapping draw areas of elevators in the vicinity of Lettsworth, Louisiana.
20. These geographic areas satisfy the hypothetical monopsonist test a monopsonist is a buyer that controls the purchases in a given market, the buyer-side counterpart to the hypothetical monopolist test. A
hypothetical monopsonist of the purchase of corn or soybeans in each of these areas would impose at least a small but significant and non-transitory decrease in the price paid to farmers.
Such a price decrease for these products would not be defeated by farmers selling to purchasers outside their local area due to the added costs of transportation.
As farmers in these areas have already determined the best use of their farmland, a price decrease would also not be defeated by farmers switching to growing alternative crops. Farmers currently growing corn or soybeans are unlikely convert to production of other agricultural commodities in sufficient numbers to prevent a small but significant decrease in price. Nor could area farmers thwart a post-transaction price decrease by selling instead to local country elevators. Country elevators simply resell grain to river and rail elevators or to other end users; if Defendants lower prices posttransaction, country elevators would be forced to lower their own price to farmers to maintain profitability.
Consequently, country elevators cannot mitigate a price decrease resulting from this transaction. Therefore, each of the overlapping draw areas above constitute a relevant geographic market within the meaning of Section 7 of the Clayton Act, 15 U.S.C. 18, for the purposes of analyzing this transaction.
V. ZGCs Acquisition of Certain Grain Elevators From Bunge is Likely To Result in Anticompetitive Effects 21. In each of the nine relevant geographic markets, ZGC and its affiliate CGB and Bunge are two of a very small number of grain purchasers competing to buy corn and soybeans; in
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