Source: Rita Jane Gabbett, MEATINGPLACE, 4/24/19


R-CALF USA is suing the four largest U.S. meat packers, alleging the firms violated U.S. antitrust laws, the Packers and Stockyards Act, and the Commodity Exchange Act by unlawfully depressing the prices paid to American ranchers.
Scott+Scott Attorneys at Law along with Cafferty Clobes Meriwether & Sprengel LLP filed the class action lawsuit in federal district court in Chicago on behalf of R-CALF on Tuesday.

The complaint was filed against Tyson Foods, JBS S.A., Cargill and National Beef Packing Company (and certain of their affiliates), which collectively purchase and process over 80 percent of U.S. cattle raised specifically for beef production.
It alleges that from at least Jan. 1, 2015, through the present, these companies conspired to depress the price of fed cattle they purchased from American ranchers, thereby inflating their own margins and profits.

The class-action lawsuit seeks to recover the losses suffered by cattle producers who sold fed cattle to any one of the four packers from January 2015 to the present and traders who transacted live cattle futures or options contracts on the Chicago Mercantile Exchange from January 2015 to the present.

The complaint is based on witness accounts, including a former employee of one of the four packers, trade records, and economic evidence. It alleges that these companies conspired to artificially depress fed cattle prices through various means, including:
• Collectively reducing their slaughter volumes and purchases of cattle sold on the cash market in order to create a glut of slaughter-weight fed cattle;
• Manipulating the cash cattle trade to reduce price competition amongst themselves, including by enforcing an antiquated queuing convention through threats of boycott and agreeing to conduct substantially all their weekly cash market purchases during a narrow 30-minute window on Fridays;
• Transporting cattle over uneconomically long distances, including from Canada and Mexico, in order to depress U.S. fed cattle prices; and
• Deliberating closing slaughter plants to ensure the underutilization of available U.S. beef packing capacity.

The suit estimated these alleged practices depressed fed cattle prices by an average of 7.9% since January 2015, causing significant harm to U.S. ranchers.
Tyson, Cargill, NAMI respond

In a statement, Tyson Foods responded, "We’re disappointed this baseless case was filed. As with similar lawsuits concerning chicken and pork, there’s simply no merit to the allegations that Tyson colluded with competitors. This complaint is nothing more than another transparent and opportunistic attempt by attorneys to make money for themselves at the expense of consumers. Tyson operates with integrity every day. We welcome competition, which makes us a better company, enhances the quality of our products and provides more choices at greater value to our customers. We depend on thousands of independent cattle, pig and chicken farmers and ranchers as a vital part of our supply chain. Contrary to the assertions in this lawsuit, Tyson wants its suppliers to succeed. Tyson will vigorously defend itself and its proud heritage of supporting America’s farmers and ranchers."

Cargill responded with this statement: "For many years, Cargill has served as a trusted partner to American cattle ranchers, committed to supporting their family farms and livelihoods. We believe the claims lack merit, and we are confident in our efforts to maintain market integrity and conduct ethical business."

North American Meat Institute spokesman Eric Mittenthal told Meatingplace, "We have not had an opportunity to analyze the complaint fully yet, but an initial, preliminary review strongly suggests the complaint is unfounded and ignores the economics of the marketplace." 


For more stories, go to www.meatingplace.com.