Brief

More poultry price-fixing accusations: This time, farmer pay

Dive Brief:

  • Poultry growers have filed a class action lawsuit accusing Tyson Foods, Pilgrim’s Pride, Perdue Farms, Koch Foods, Sanderson Farms and subsidiaries of each company for conspiring to suppress compensation paid to farmers, according to Meat + Poultry.
  • The complaint claims the poultry processors agreed to share detailed data on grower compensation with each another in an effort to keep grower compensation below competitive levels.
  • The suit also says that the poultry processors agreed not to solicit or hire farmers from other poultry companies in an effort to keep competition at bay.

Dive Insight:

The poultry industry has been having a rough couple of months. Last November, the Georgia Dock Pricing Index's numbers were called into question, and the investigation eventually led to the index's demise. The poultry industry has since announced a new pricing index, and it seemed that the storm had passed. Now comes this class action lawsuit from farmers who refer to the industry's major companies, a group they refer to as "the Cartel." 

Price fixing accusations aren't new to poultry at this point, but the case will still ruffle feathers at the Federal Trade Commission. When consumers make choices about what food products to purchase, they expect that the price has been determined freely on the basis of supply and demand, not by an agreement among competitors. 

A spokesperson from Tyson Foods denies the claims and cited a 2015 study by Dr. Thomas Elam, president of agricultural consulting firm Farm Econ LLC, which showed the average farmer payments per pound of chicken have increased almost 53% since 1990. 

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Filed Under: Manufacturing Policy Meat / Protein
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