Tyson Foods Under USDA Investigation

The U.S. Department of Agriculture is investigating Tyson Foods Inc. of Springdale and four of the nation’s other top 10 broiler-producing companies for possible unfair dealings with poultry producers, according to an article in The Wall Street Journal.

The investigation, along with two others concerning alleged anticompetitive practices in the meatpacking industry, was disclosed by Agriculture Secretary Dan Glickman in a June 4 press release. The press release, however, didn’t name any specific companies. The Journal article stated that a reporter had learned of the Tyson investigation from “department officials.”

Glickman says the investigation is an effort by the federal government to promote fair competition in the country’s livestock and poultry markets. The USDA initiated the investigation after receiving numerous complaints from poultry growers across the eastern half of the country about contract settlements.

The press release states that the investigation will examine poultry contracts of growers who began supplying birds to the companies during the same time periods.

Ed Nicholson, a spokesman for Tyson Foods, says he believes the investigation stems from grower complaints over incentive pay. Growers who use less feed to produce healthy broilers receive incentive pay from the company, he says.

Tyson Foods supplies growers with chicks and feed. Several factors – including conditions, temperature and cleanliness of chicken houses – can affect the amount of weight chickens gain on a certain amount of feed.

“People who consistently end up as the poorest performers are making the most noise about this,” Nicholson says. “They feel like people should be paid on an equal basis regardless of performance. The people who work harder don’t feel that way. It takes a certain amount of work to grow chickens effectively.”

The press release stated that Glickman will ask Congress to expand enforcement of the Packers and Stockyards Act of 1921 to include live poultry dealers as well as meat packers.

‘”At present, live poultry dealers are not subject to the same enforcement procedures as meat packers for alleged violations,” the release states.

Earlier this year, auditor’s for the USDA’s Office of Inspector General reported that the Grain Inspection, Packers and Stockyards Administration is ill prepared to investigate price fixing and other violations, and the administration should consider transferring antitrust duties to the Justice Department or Federal Trade Commission.

The investigation focuses on poultry contracting between producers and processing plants in Arkansas, Louisiana and Mississippi.