Conor here: The following piece doesn’t include much detail on the US Department of Agriculture investigation, but I think it’s important to highlight nonetheless. The investigation appears to be connected to a class action lawsuit by farmers against Tyson. They accuse the the largest chicken company in the country, with nearly $53 billion in sales last year, of leaving them with millions of dollars in debt after the company shuttered plants and not only violated an agreement to sell the plants to a competitor but conspired to make sure a competitor couldn’t make the purchases. Many of the farmers faced bankruptcy and foreclosures due to Tyson’s actions.
Whether it’s screwing over farmers or ripping off consumers, there sure seems to be something rotten in the $65-billion-per-year US chicken industry where four companies control 60 percent of the market and 71 percent of chicken farmers live below the poverty line.Here are just a few of the legal cases brought against the big four in recent years:
- Earlier this year Tyson and JBS agreed to pay a combined $127.2 million to resolve a lawsuit accusing them of suppressing workers’ pay at processing plants.
- In September of last year, the Department of Justice (DOJ) filed an antitrust lawsuit against Agri Stats for allegedly sharing competitively sensitive information among pork and poultry processors to manipulate the markets. Agri Stats is a nationally utilized data and analytics firm for the meat processing industry and it has been named in more than 90 lawsuits since 2016 for using non public data to help the big poultry companies fix prices.
- In 2022, the DOJ fined a group of major poultry producers $84.8 million. More significantly, it ordered an end to the exchange of compensation information, banned the data firm (and its president) from information-sharing in any industry, and prohibited deceptive conduct towards chicken growers that lowers their compensation. Neither the poultry groups nor the data consulting firm admitted liability.
- In 2021, Tyson paid $221.5 million to settle litigation by three groups of plaintiffs that accused it of illegally conspiring to inflate chicken prices.
Is it starting to have an effect?
By John McCracken who covers the industrial agriculture meat industry for Investigate Midwest. He has experience reporting at the intersection of agriculture, environmental pollution and climate change and is a former Midwest reporting fellow for Grist. Originally published at Investigate Midwest.
The Packers and Stockyard Division is actively investigating Tyson Foods, one of the largest meat companies in the nation, according to interviews with contract growers and a USDA employee.
The PSD, an arm of the U.S. Department of Agriculture, is tasked with investigating violations of the Packers and Stockyard Act and handing out enforcement actions. The Act was created in 1921 to protect livestock and poultry producers from “unfair, unjustly discriminatory or deceptive practices.”
The agency routinely investigates potential violations such as the suppression of meatpacking worker wages, failure to pay for livestock and discrimination against contract growers. An investigation doesn’t always lead to an enforcement action or penalty.
The agency would not officially confirm or deny the existence of an ongoing investigation.
“PSD does not comment on any investigative activity, or the absence thereof,” the agency said in a statement provided to Investigate Midwest. “As a regulatory agency, PSD closely monitors all industry participants, including meat packers and poultry companies, for compliance with the Packers and Stockyards Act.”
A USDA employee confirmed that an investigation is ongoing as of early August. Investigate Midwest is not naming the employee due to concerns about employer retaliation.
The employee did not provide specific details about what the agency is seeking but did say Tyson Foods is aware of the matter, and it is larger in scope compared to other PSD investigations.
Tyson Foods is the largest chicken company in the country, with nearly $53 billion in sales last year. The company operates 183 chicken facilities in the U.S., including hatcheries, processing plants and feed mills. The company contracts with nearly 4,000 chicken farmers nationwide.
This investigation follows Tyson Foods’ recent closure of nine meatpacking plants across the country, beginning in early 2023. The company is also in active litigation for alleged violations of antitrust law.
Tyson Foods did not respond to repeated requests for comment.
A chicken operation near Harrison, Arkansas, on March 31, 2024. photo by Julie Anderson, for Investigate Midwest
Investigate Midwest filed a Freedom of Information Act with the USDA seeking records in May related to potential PSD actions against Tyson Foods after two former contract growers told a reporter they had been contacted by the agency. Contract growers said they were asked questions about the debt they took out to work with the company and their operations.
The USDA denied the records request in June, citing a federal exemption for records that could be related to “enforcement records for a pending or prospective investigation.”
“(The exemption) protects law enforcement records if their release could reasonably be expected to interfere with enforcement proceedings. The relevant law enforcement purpose in this instance is enforcement of the Packers and Stockyards Act,” the June response letter stated.
Investigate Midwest has appealed the records denial and is awaiting a response from the department.
The Packers and Stockyards Act has seen major updates in recent years, with the federal government showing an increased interest in the poultry industry.
Recent updates include the required sharing of payment information between chicken companies and the contract farmers who raise the birds. The PSA has also been updated to prevent discrimination of livestock and poultry growers based on race, sex, age, or disability.
The USDA is still developing a proposed rule to address “problematic” practices of contract growers taking out excessive debt to work with companies. The agency said it anticipates finalizing this rule by early next year.
In May, Investigate Midwest reported that chicken growers who worked with Tyson were left with millions of dollars in debt after the company shuttered plants. Many of them faced bankruptcy and foreclosures, while others retired, found work outside of farming or sold their land to pay off debt.
Peter Carstensen, an antitrust expert and emeritus law professor at the University of Wisconsin Law School, said the PSD typically builds investigative cases against companies to bring about a formal complaint alleging a violation of the act.
“It is somewhat more plausible they are seriously looking at whether they can make a claim that Tyson violated the provisions of the Packers and Stockyards Act by inducing various kinds of investments and then turning around and closing the plants,” he said.
