A new lawsuit says the four largest beef-packing companies in the U.S. conspired to lower the prices they paid ranchers for cattle, a violation of federal antitrust law, according to a Reuters report.
Cargill Inc., JBS USA, National Beef Packing Co. and Tyson Foods Inc. were named in a lawsuit filed in the U.S. District Court for the Northern District of Illinois by the Ranchers Cattlemen Action Legal Fund United Stockgrowers of America (R-CALF) and four cattle-feeding ranchers. The complaint seeks compensatory, punitive and triple damages.
The companies were accused of colluding since January 2015 to suppress the price of cattle raised specifically for beef production, with a goal of increasing margins and profitability.
The complaint says the four beef-packing companies “conspired to suppress prices through such tactics as importing foreign cattle at a loss, closing slaughter plants, and reducing slaughter and purchase volumes,” Reuters reported.
Tyson and JBS, along with many other companies, have been named in other similar lawsuits that allege price collusion in the broiler, egg and pork markets.
Tyson said the lawsuit is “baseless” and that the company “wants its suppliers to succeed.”
"We’re disappointed this baseless case was filed," the company said in a statement. "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 complaint says Cargill, JBS USA, National Beef Packing Co. and Tyson together controlled 81 percent of the U.S. fed cattle market in 2017, with beef sales of more than $48 billion in the fiscal year.
In a statement, R-CALF CEO Bill Bullard said the organization hopes to “prevent the Big 4 packers from capturing the U.S. cattle market from independent U.S. cattle producers,” adding, “We hope U.S. cattle ranchers can be compensated for years of significant losses.”
The law firms Scott+Scott Attorneys at Law LLP and Cafferty Clobes Meriwether & Sprengel LLP are representing R-CALF.
Connections to the poultry industry
Three of the four defendants are multi-species animal protein companies also involved in the poultry industry. According to the Poultry International Top Poultry Companies survey, JBS and Tyson are the two largest poultry companies in the world, while Cargill is the world's 14th largest.
Brazil-based Marfrig Global Foods owns a majority stake in National Beef Packing Co. To leverage that purchase and to better focus on its beef business, Marfrig sold its poultry subsidiary, Keystone Foods, to Tyson Foods in 2018.