Tyson Foods, Cargill sued by cattle group R-CALF

Tyson Foods and its beef competitors were sued by cattle group — R-CALF USA in a Chicago federal court this week. The complaint alleges Tyson Foods, Cargill, JBS S.S. and National Beef Packing, which collectively process more than 80% of the U.S. cattle raised for beef production, unlawfully depressed prices paid to American ranchers.

The suit was filed in violation of U.S. antitrust laws and the Packers and Stockyard Act for action dating back to January 2015. This class-action suit seeks to recover the losses it says cattle producers suffered while meat packers depressed the price fed cattle to fatten their own margins. The complaint also implicates commodity traders on the Chicago Mercantile Exchange who transacted live cattle futures or options.

Tyson Foods refutes the claims and said it will fight vigorously to defend itself in this case. The company released the following statement about the claims.

“We’re disappointed this baseless case was filed. As with similar lawsuits concerning chicken and pork, there’s simply no merit to the allegations that Tyson colluded with competitors. This complaint is nothing more than another transparent and opportunistic attempt by attorneys to make money for themselves at the expense of consumers. Tyson operates with integrity every day.

“We welcome competition, which makes us a better company, enhances the quality of our products and provides more choices at greater value to our customers. We depend on thousands of independent cattle, pig and chicken farmers and ranchers as a vital part of our supply chain. Contrary to the assertions in this lawsuit, Tyson wants its suppliers to succeed. Tyson will vigorously defend itself and its proud heritage of supporting America’s farmers and ranchers.”

The suit claims the packers collectively manipulated cattle trade to reduce purchases of cattle sold on the cash market in order to create too much fed cattle being slaughtered. They are accused of deliberately closing slaughter plans to ensure underutilization of available of U.S beefpacking capacity. And, they were accused of transporting cattle over long distances including Canada and Mexico to squeeze U.S. fed cattle prices.

The suit estimated these alleged practices depressed fed cattle prices by an average of 7.9% since January 2015, causing significant harm to U.S. ranchers.

Cargill also said the claims lack merit. Wichita, Kansas-based Cargill Meat Solutions released the following statement:

“For many years, Cargill has served as a trusted partner to American cattle ranchers, committed to supporting their family farms and livelihoods … we are confident in our efforts to maintain market integrity and conduct ethical business.”