R-CALF sues "Big 4" U.S meat packers over conspiring to depress prices

Four major meat packing businesses in the Unites States are facing a lawsuit from the Ranchers Cattlemen Action Legal Fund, United Stockgrowers of America (R-CALF). The companies include Tyson Foods, Inc., JBS S.A., Cargill, Inc., and National Beef Packing Company, LLC which are labelled as the “Big 4” in the court documents.

Scott+Scott Attorneys at Law LLP (Scott+Scott), a national antitrust and securities litigation firm, along with Cafferty Clobes Meriwether & Sprengel LLP (Cafferty Clobes), filed a class action lawsuit on Tuesday in federal district court in Chicago on behalf of R-CALF USA. The lawfirms are also representing four cattle-feeding ranchers from Iowa, Nebraska, Kansas, and Wyoming in the suit.

The complaints R-CALF is claiming are that the Big 4 conspired to:

  • collectively reduce their slaughter volumes and purchases of cattle sold on the cash market in order to create a glut of slaughter-weight fed cattle;
  • manipulate the cash cattle trade to reduce price competition amongst themselves, including enforcing an antiquated queuing convention through threats of boycott and agreeing to conduct substantially all their weekly cash market purchases during a narrow 30-minute window on Fridays;
  • transport cattle over uneconomically long distances, including from Canada and Mexico, in order to depress U.S. fed cattle prices; and
  • deliberatly closing slaughter plants to ensure the underutilization of available U.S. beef packing capacity.

These alleged practices are estimated to have depressed fed cattle prices by an average of 7.9% since January 2015, causing significant harm to U.S. rancher, the suit claims.

“R-CALF USA is taking this historic action to fulfill its promise to its members to prevent the Big 4 packers from capturing the U.S. cattle market from independent U.S. cattle producers,” says R-CALF USA CEO, Bill Bullard. “We hope U.S. cattle ranchers can be compensated for years of significant losses.”

The suit alleges from at least January 1, 2015 through the present, the Big 4 packers conspired to depress the price of fed cattle they purchased from American ranchers, thereby inflating their own margins and profits.

In a request for comment, Cargill said:

For many years, Cargill has served as a trusted partner to American cattle ranchers, committed to supporting their family farms and livelihoods. We believe the claims lack merit, and we are confident in our efforts to maintain market integrity and conduct ethical business.

RealAgriculture has reached out to all four companies for comment and at this time only Cargill has responded.

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