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Federal Register / Vol. 86, No. 108 / Tuesday, June 8, 2021 / Notices Divestiture Assets remain economically viable, competitive, and saleable; that Defendants will preserve and maintain the Divestiture Assets; and that the level of competition that existed between Defendants prior to the Transaction is maintained during the pendency of the required divestiture.
The United States and Defendants have stipulated that the proposed Final Judgment may be entered after compliance with the APPA. Entry of the proposed Final Judgment will terminate this action, except that the Court will retain jurisdiction to construe, modify, or enforce the provisions of the Final Judgment and to punish violations thereof.

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II. Description of Events Giving Rise to the Alleged Violation A The Defendants and the Proposed Transaction Defendant ZGC, headquartered in Covington, Louisiana, is a subsidiary of the National Federation of Agricultural Cooperative Associations of Japan. ZGC
owns and operates a state-of-the-art export elevator located on the Mississippi River near Convent, Louisiana, from which it trades and exports corn, soybeans, sorghum, wheat, and grain by-products. Export elevators receive grain, largely via barge or rail, that has been purchased from farmers by inland elevators. Export elevators store the aggregated grain until it can be loaded onto ocean going ships. ZGC
does not own any inland grain elevators and relies upon its affiliate, CGB
Enterprises Inc. CGB, to supply the majority of the corn, soybeans and other agricultural commodities ZGC exports annually from Convent. Postacquisition, ZGC intends to lease the elevators that it proposes to acquire from Bunge to CGB to operate through CGBs wholly owned subsidiary, Consolidated Grain and Barge Co.
CGB is a 5050 joint venture between ZGC and Itochu Corporation, a global trading company. CGB operates more than 100 elevators in the United States, many of which are located along the Mississippi, Ohio, Arkansas, and Illinois Rivers. CGB is the fifth-largest grain company in the United States by storage capacity. CGBs grain merchandisers are in daily contact with thousands of farmers, actively seeking to purchase grain from them. Currently, CGB sells approximately 60% of the grain it purchases to ZGC.
Defendant Bunge is the North American subsidiary of Bunge Limited.
Bunge is a large agribusiness and food ingredient company that owns and operates grain elevators, oilseed
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processing plants, and edible oil refineries, as well as grain export terminals. Bunge is the eighth-largest grain company in the United States by storage capacity. Post-acquisition, Bunge will continue to purchase grain in the United States via its export elevator on the Mississippi River in Destrehan, Louisiana and its export terminal in Longview, Washington a joint venture with Itochu Corporation.
In addition to the export terminals, Bunge will retain ownership interests in eight grain elevators in Illinois and Indiana.
The 35 operating elevators ZGC
proposes to acquire from Bunge are located in nine statesArkansas, Iowa, Illinois, Indiana, Kentucky, Louisiana, Missouri, Mississippi and Tennessee primarily along the Mississippi River and its tributaries, and predominantly handle corn and soybeans.
B Relevant Markets and the Competitive Effects of the Transaction American consumers benefit from the productivity and efficiency of American farmers, who annually produce far more volume than needed to meet domestic demand. Corn and soybeans collectively referred to here as grain are the primary crops grown in the United States. American farmers produced 14.2 billion bushels of corn and 4.14 billion bushels of soybeans in 2020, and roughly one-quarter of these grains were exported. In the United States, grain may flow from the farm directly to end users like ethanol plants and feed mills, or farmers may sell their grain to nearby rail or river grain elevators, where it is stored, aggregated, and later transported by train or barge to more distant domestic end users or to port elevators for export.
More than 45% of the grain exported from the United States 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 port elevators.
Nearly all of the elevators ZGC seeks to acquire from Bunge are river elevators located on the Mississippi or its tributaries.
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
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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.
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.
Today, ZGC and its affiliate CGB
compete against Bunge to purchase corn and soybeans from farmers. In particular, in nine geographic areas a Bunge river elevator and a nearby ZGC
or CGB elevator represent two of only a handful of grain purchasing alternatives for area farmers. In those nine geographic areas, ZGC and Bunge currently compete aggressively to win farmers business by offering better prices and more attractive amenities such as faster grain drop-off services and better grain grading. Faster drop-off services mean farmers can get back to their fields more quickly and make better use of their trucks and employees, ultimately saving time and money. If one elevator is grading grain more harshly or inconsistently, which may lead to a lower price paid, the farmer has the option of selling to a competing elevator which may grade differently.
The Transaction will eliminate competition between ZGC and Bunge in those locations. As result, many U.S.
farmers are likely to receive lower prices and poorer quality service when seeking to sell their grain.
1. Relevant Product Markets 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
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