Suit says meat packers conspired against ranchers, Merc traders

SHARE Suit says meat packers conspired against ranchers, Merc traders

Tyson Foods | AP file photo

Tyson Foods, Cargill and two other large meat packers illegally conspired to lower livestock prices, squeezing ranchers and hurting traders who deal in cattle futures at the Chicago Mercantile Exchange, a federal lawsuit alleged Tuesday.

The suit accuses the meat-packing giants, including JBS and National Beef Packing Co., of violating U.S. antitrust law by depressing cattle prices since at least January 2015. It was brought by R-CALF USA, a nonprofit organization that represents cattle ranchers, and by four ranchers.

Industry data show the four companies named in the complaint control more than 80 percent of the market for U.S. fed cattle, which is cattle raised for beef production. The suit said the companies have increased their profit margins because consumers are paying high beef prices even though the packers are paying less for the product.

Gary Mickelson, a spokesman for Tyson, said, “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.” He said Tyson depends on independent farmers and ranchers “as a vital part of our supply chain.”

The suit seeks class action status for all ranchers who sell to the big packers, and for traders who specialize in cattle futures and options. The futures market at the Merc was distorted by the companies’ manipulation of cash prices for livestock, said Bill Bullard, CEO of R-CALF.

The Merc, part of Chicago-based CME Group, is not accused of wrongdoing.

The alleged scheme cut ranchers’ income by about 7.9 percent since January 2015, Bullard said. He said he and his lawyers are still working to quantify losses felt by futures traders.

Bullard said his group’s case is bolstered by trade data and an inside account from a former employee of one of the packers. He said R-CALF brought its information last September to the federal Commodity Futures Trading Commission, which regulates the agricultural markets, but received no response.

The suit said the packers used tactics such as slowing purchases to create a glut of slaughter-weight fed cattle, closing slaughter plants despite strong demand for beef and confining their cash market trading to a single 30-minute time frame on Fridays. Smaller packers use the cash markets throughout the week, Bullard said.

The suit was filed in U.S. District Court in Chicago and assigned to Judge John Tharp Jr., said David Scott, an attorney for the plaintiffs.

The Latest
Cornel West plans to run for president as a member of The People’s Party. He’s critical of Joe Biden and Donald Trump and wants to empower those ‘pushed to the margins.’
AM radio has a decadeslong history in Chicago, but the industry faces the prospect of losing easy access to listeners in their cars.
On June 6, 1944, nearly 160,000 Allied troops landed in Normandy in France to oust the Nazi occupiers. Of those, 73,000 were from the U.S.; 83,000 from Britain, Canada.
A handful of Cubs and Sox and Cubs have been star-level by the numbers. Let’s take a look at them.
More than 687,000 Illinois residents filed valid claims that their photo appeared on Google Photos between May 1, 2015, and April 25, 2022, in violation of state privacy laws.