Missouri chicken farmers sue Tyson Foods for breach of contract

A group of contract growers that supplied chickens to Tyson Foods’ slaughter and processing plant in Dexter, Mo., have sued the company claiming a breach of contract following a plant closure in October.

The suit was filed Dec. 22 with the Circuit Court of Stoddard County, located in southeast Missouri.

The farmers claim Tyson executives knew as early as November 2021 that the company planned to cease operations in Dexter but withheld that information from growers who said they incurred more debt and made additional investments in their farms without knowledge that their contracts would end.

The plaintiffs seek $25,000 each and additional relief for damages relating to their loss of income resulting from the closure.

Tyson Foods and the broiler chicken industry utilize a vertically integrated production system where the company owns all the chickens throughout the hatching, growing and slaughter process. The farmers contract with Tyson to raise the chickens delivered to their farms. However, the plaintiffs said Tyson exercised control over how the chickens were raised, including what equipment and supplies were used in the growing cycles.

The farmers expected based on statements and promises from Tyson that their relationship would continue as long as they met Tyson’s demands, according to the filing.

The plant operated for 20 years before its closure in October. The plant closure was one of two in Missouri, two in Arkansas and two other plants with production shifting to newer plants in Humboldt, Tenn., and an automated facility in Danville, Va., that came online in August.

Tyson Foods did not respond to a request for comment on the pending suit in Stoddard County, but Talk Business & Politics asked CEO Donnie King in August when the closure announcements were made what would happen to growers under contract. King said growers who supply birds to the Noel, Mo., plant would have the opportunity to grow for other plants in Northwest Arkansas. He said in some cases at other complexes buyer contracts will be bought out.

In August, Tyson released the following statement regarding grower contracts: “We are having individual conversations with the contract growers who may be impacted. 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.”

Cal-Maine Foods announced this week plans to acquire Tyson’s plant in Dexter and invest $13 million to convert the operations from meat processing to egg production. The repurposing of the former poultry-processing plant would create about 96 jobs, a company official said in a news release.

Sherman Miller, Cal-Maine president and CEO, said the company is working to close the deal with Tyson and with contract growers who will supply the operation. However, farms – equipment and houses, for example – for raising chickens are far different than farms providing poultry eggs.