Grandview Poultry sues Tyson Foods and Cal-Maine for anti-competitive practices 

A group of 45 former poultry growers for Tyson Foods in Dexter, Mo., have filed a class action suit as Grandview Poultry against Springdale-based Tyson Foods and Cal-Maine Foods alleging anticompetitive and fraudulent practices.

The suit, filed June 5 in the Circuit Court of New Madrid County, Mo., is related to the Dexter processing plant that closed in October 2023.  This is the second suit brought by the farmers, now in a class action following Cal-Maine’s closing on the purchase of the former Tyson facility assets. In January, Cal-Maine said it planned to convert the site into a shell egg operation with an investment of $13 million.

The suit alleges the closure announcement in 2023 devastated the Dexter community, but Cal-Maine executives were at the facility the following day indicating Tyson upper management already had plans to sell the facility, while they kept it from growers. The Missouri farmer group said Tyson’s dealings with Cal-Maine will hurt the region as it “wrongfully”  terminates contracts with chicken farmers.

Tyson Foods provided the following statement Tuesday (June 11) to Talk Business & Politics: “We are disappointed that Grandview has chosen to litigate against Tyson and Cal-Maine. Tyson has honored its contractual obligations to all growers and continues to pay Grandview even though Grandview has no birds in the field. Cal-Maine is investing in the region and has offered Grandview and other growers the opportunity to supply its facility with eggs. The allegations have no merit. On the contrary, Tyson selling its facility to Cal-Maine has brought opportunities to growers that would not have existed if the building had been left empty.”

Tyson growers said they had hoped to supply eggs for Cal-Maine and keep their farms viable, but Cal-Maine’s requirements for more farmer investment were cost-prohibitive for many. Also, state law refers to “meat” as “any eligible portion of livestock or poultry” creating a conflict between the two businesses.

The complaint alleges Tyson Foods and Cal-Maine conspired against the displaced growers with a “property use agreement” that is anti-competitive in nature when the two companies do not compete. Tyson Foods has its own integrated chicken business from hatchery to broiler slaughter. Cal-Maine is a major supplier of table eggs, not a meat protein. The complaint also said the defendants required Tyson growers to waive all claims against them before signing with Cal-Maine.

Plaintiffs’ attorney Russell Oliver said much of Tyson’s “property use agreement” is redacted or blacked out, and he’s asked the court to have the company make a complete document available to the public and state lawmakers concerned about the plant closing’s impact on the farm community. Oliver said growers invested heavily in their farms to Tyson’s specifications, and now those facilities have little value without a grower contract.

The complaint said the property use agreement signed Dec. 29, 2023, between Tyson and Cal-Maine that remains in effect for 25 years is a “blatant restraint of trade in violation of Missouri’s antitrust laws.” Tyson and Cal-Maine were given 30 days to respond to the request for an unredacted property-use agreement to be disclosed to the court and the public.

SUIT BACKGROUND
Following the plant closure in October 2023, growers first sued Tyson Foods on Dec. 22, alleging breach of contract and fraudulent misrepresentation after the growers had invested in their farms at Tyson’s request.

This litigation alleged Tyson knew as early as November 2021 it planned to close the Dexter plant and withheld that information from growers who incurred more debt during that time. The Dexter plant operated for 20 years and was one of two plant closures in Missouri and two others in Arkansas with production shifted to newer plants in Humboldt, Tenn., and Danville, Va.

Tyson CEO Donnie King said at the time the company was working with impacted communities and most growers would have the option to supply other plants and in some cases, contracts would be bought out. Cal-Maine CEO Sherman Miller said in January the company was working to deal with Tyson and contract growers who would supply its new operation in Dexter.