Private protein and grain trading giant Cargill and agricultural-investment firm Continental Grain reached a deal last week to jointly take over Sanderson Farms, the third-largest chicken processor in the U.S., for $4.5 billion. If approved, this deal would merge Continental Grain’s Wayne Farms with Sanderson Farms to create a new private poultry corporation, increasing the market share of the top three chicken processors from 46% to 51%, according to data from Watt Poultry USA.

Anti-monopoly advocates, policymakers, and farmers are concerned that the merger will further consolidate market power among chicken corporations charged with fixing prices for consumers, farmers, and workers. Cargill’s unique position as a dominant grain trader and animal feed processor also raises concerns about vertical integration across the protein supply chain. “They can make a lot of money over other people because they control the grain like nobody else in this market sector,” says Joe Maxwell, president of Family Farm Action. “They can leverage more profit by squeezing more out of the [grain] farmers.”

Decades of mergers and vertical integration have consolidated poultry production into a handful of firms that source chicken from closely controlled contracted farmers. Private and federal antitrust suits recently accused major poultry corporations of conspiring together to rig bids, cut back production, and increase chicken prices. Pilgrim’s Pride pleaded guilty to price-fixing last fall following an investigation by the Justice Department, and federal enforcers have indicted other major corporations and poultry executives. Sanderson Farms was subpoenaed in this federal probe. Both Sanderson and Wayne Farms face numerous private price-fixing charges, including allegations of conspiring with other poultry corporations to hold down prices paid to farmers and workers’ wages across the industry. Cargill is also charged in this wage-fixing suit, as well as private beef and turkey price-fixing allegations.

As the third-largest chicken corporation, Sanderson Farms processes more than 13 million chickens a week between its 13 poultry plants, employing 17,000 people, and supplying large chains including Walmart and distributors such as Sysco. Sanderson trails industry leaders Tyson Foods and Pilgrim’s Pride, but a merger with Continental Grain’s Wayne Farms would increase its market share to approximately 15%, just shy of Pilgrim’s 16%.

Cargill and Continental Grain will pay a 30% premium on Sanderson Farms’ shares to jointly acquire the company and take it off the stock exchange, subject to shareholder and antitrust approval. Credit Suisse analysts claimed the deal would not take enough national market share to raise antitrust scrutiny. But given ongoing price-fixing investigations, Sen. Chuck Grassley (R-Iowa) urged the Justice Department to investigate this acquisition for risks of increased costs or decreased choices for consumers.

National market shares also overlook higher levels of regional consolidation, which matter for farmers and workers. For instance, half of all chicken farmers report having just one or two corporations to work with. Sanderson and Wayne both primarily operate in the Southeast, but it is unclear how much they compete for farmers or workers. Sanderson’s plants are largely concentrated in Texas, Mississippi, Southern Georgia, and North Carolina, while Wayne operates primarily in Alabama and Northern Georgia.

Nonetheless, farmers worry about what a change in Sanderson’s leadership will mean for them. “Growers are very, very afraid they are going to see a pay cut,” says Reid Phifer, a former poultry grower from North Carolina and administrator of a poultry forum representing some 4,200 growers. “They don’t know who will be giving the orders. … Everyone is afraid of the unknown.”

Workers also fear job losses in regions where Cargill, Wayne, or Sanderson facilities overlap. For instance, Cargill operates a cooked turkey products facility in Waco, Texas, employing nearly 650 people, and Sanderson operates a live chicken processing facility, also in Waco, employing 1,200. A spokesperson for Cargill told the Waco-Tribune Herald that the plants will “both likely remain open” given the current demand for poultry. Sanderson and Wayne also both operate chicken processing facilities in Laurel, Miss., Sanderson’s corporate headquarters. With the chief executive of Georgia-based Wayne Farms slated to run the combined business, the Laurel Leader Call reports some residents fear losing administrative jobs with Sanderson.

Sanderson Farms did not respond to a request for comment on their plans for merging plant and farmer networks with Wayne Farms. Cargill and Continental Grain declined to comment. “As part of the newly created company, Sanderson Farms and its new owners will remain committed to the employees, poultry producers, customers, communities, environment, and animals under our care,” Joe Sanderson, chairman and chief executive officer of Sanderson Farms said in a press release.

Beyond the implications of merging Wayne and Sanderson, this deal represents a considerable vertical merger into a new protein line for agribusiness giant Cargill. America’s second-largest private corporation has been looking to enter the U.S. chicken business for the past five years, the president of Cargill’s North American protein business told the Minneapolis Star Tribune. Cargill is already a top-four producer of U.S. beef and turkey and operates chicken businesses in Canada, the U.K., China, Thailand, and four Latin American countries. Cargill also sells products to chicken businesses — soon to be its competitors — including chicken feed mixes and additives, as well as software programs that use farmer data to predict outcomes and recommend changes to increase profits.

Most critically, Cargill buys and trades the key commodities that go into chicken feed, namely corn and soy. Feed makes up roughly 75% of Sanderson Farms’ production costs, according to an undated company blog, and feed prices are currently rising. Tyson Foods posted a third-quarter loss in its chicken unit, despite a seven-year high in wholesale chicken prices, citing high feed prices (plus millions in legal fees from price-fixing suits). Sanderson also reported issues with high feed costs to investors for its second quarter.

Cargill processes 21% of all U.S. soybeans and shared 87% of all wet corn milling with two other corporations in 2011. As such, Cargill has the market dominance to demand low grain prices from farmers and mitigate the fluctuating costs of feed that make or break the poultry business. Cargill’s vertical integration across many commodity markets and international trading also gives it exceptional knowledge to maneuver global markets and cross-subsidize its many ventures.

“Regulators don’t totally know how to handle a company like Cargill, because … they control an enormous amount of information about commodity supply chains that no one else has,” says Ben Lilliston, director of rural strategies for the Institute for Agriculture and Trade Policy. “Because they are so diverse and big, they can choose to lose money in one sector temporarily if they think it is going to gain in the long term … if they want to undercut the market on feed to make their chicken cheaper they would be able to, and it would be hard to track.”

Merger enforcement has decreased over the past 50 years, especially when it comes to vertical mergers. Under the current laissez-faire antitrust regime, corporations like Cargill can avoid scrutiny by arguing that their tight control over meat production from grain to grocery shelf trims margins and improves efficiency. However, this focus on efficiency overlooks the risks of decreased competition and increased market power that Congress intended to outlaw when it passed antitrust laws such as the Clayton Act. “Vertical integration is not about efficiency any longer, it is all about control,” argues Maxwell. “It’s a more efficient [way] to put money in the pockets of Cargill.”