Tyson Foods faces scrutiny over plant closures

by Kim Souza ([email protected]) 3,687 views 

Tyson Foods may have violated the Packers and Stockyards Act (PSA) in the effort to close large poultry processing operations in Van Buren and Glen Allen, Va., according to Peter Carstensen, law professor at the University of Wisconsin-Madison Law School.

Springdale-based Tyson gave workers at the two plants – almost 1,000 in Van Buren and just under 700 jobs in Virginia – the required 60 days notice that the plants would close on May 12. However, the Packers and Stockyards Act (PSA) requires growers who supply chicken processing plants be given at least 90 days notice before ending a contract.

Carstensen said violation of the PSA and lack of 90-day notice for growers is likely to draw antitrust scrutiny, Carstensen said in a report first published by Reuters. If Tyson is found in violation of the PSA the company could face fines up to $29,270 per contract, he added.

Tyson Foods told Talk Business & Politics that no growers would be impacted from the plant closures.

“We value our relationships with our growers and their support in maintaining the highest quality animal welfare practices and biosecurity measures to protect our animals and their contributions to our business,” said Tyson Foods spokesman Derek Burleson.

The meat giant said it is not canceling any farmer contracts and plans to pay growers for the full-term of remaining contracts. Tyson said it has also offered growers a voluntary buyout package, or the option to be paid through the duration of their contracts. Farms will stop receiving chicks after March 28.

The reason Tyson gave for the plant closures is the inability to economically improve the older plants’ efficiency. Tyson cited the “current scale and inability to economically improve operations“ at the two plants as the reason it decided to close them.

Tyson continues to invest in more automation in a number of plants and will open a new $300 million facility in Danville, Va., in August. The automated Danville plant will employ about 400 workers, less than half of the workforce in the Van Buren plant and 300 less than are employed in the Glen Allen facility.