Conor here: The following piece doesn’t go into much detail about the US Department of Agriculture’s investigation, but I think it’s worth highlighting anyway. The investigation appears to be connected to the farmer action lawsuit against Tyson. They accused the largest poultry company in the country, which sold about 53 billion dollars last year, for leaving them with a debt of millions of dollars after the company closed the plants and not only broke the agreement to sell the plants to competitors but conspired to make sure that the competitor could not buy. Many farmers faced bankruptcy and foreclosure as a result of Tyson’s actions.
Whether it’s harassing farmers or robbing consumers, something appears to be rotten in the $65-billion-a-year US poultry industry where four companies control 60 percent of the market and 71 percent of poultry farmers live below the poverty line. Here are just a few cases that have been brought to the big four in recent years:
- Earlier this year, Tyson and JBS agreed to pay a combined $127.2 million to settle a lawsuit accusing them of suppressing workers’ wages at processing facilities.
- In September of last year, the Department of Justice (DOJ) filed a defamation suit against Agri Stats for allegedly sharing sensitive information about competition between pork and poultry processors to manipulate markets. Agri Stats is a national data and statistics firm for the meat industry and has been sued in more than 90 lawsuits since 2016 for using non-public data to help major poultry companies fix prices.
- In 2022, the DOJ fined a group of large chicken producers $84.8 million. More importantly, it ordered an end to the exchange of compensation information, banned the data company (and its president) from sharing information with any industry, and prohibited the deceptive behavior of poultry farmers that lowers their compensation. Neither the chicken groups nor the data consulting firm claimed responsibility.
- In 2021, Tyson paid $221.5 million to settle lawsuits by three groups of plaintiffs who accused him of illegally conspiring to inflate chicken prices.
Is it starting to have an effect?
It’s John McCracken who covers the industrial meat industry for Investigate Midwest. He has experience reporting on the intersection of agriculture, pollution and climate change and is a former Midwest reporter for Grist. Originally published in Investigate Midwest.
The Packers and Stockyard Division is actively investigating Tyson Foods, one of the largest meat companies in the country, according to interviews with contract farmers and a USDA employee.
The PSD, an arm of the US Department of Agriculture, is tasked with investigating violations of the Packers and Stockyard Act and providing enforcement actions. The law was established in 1921 to protect livestock and poultry from “unfair, unfairly discriminatory or deceptive practices.”
The organization often investigates potential violations such as wage suppression of meatpacking workers, failure to pay livestock and discrimination against contract farmers. Investigations do not always lead to enforcement action or sanctions.
The agency would not officially confirm or deny that there is an ongoing investigation.
“PSD does not comment on any investigative activity, or lack thereof,” the agency said in a statement provided to Investigate Midwest. “As a regulatory agency, PSD carefully monitors all stakeholders in the industry, including meat packers and poultry companies, to comply with the Packers and Stockyards Act.”
A USDA official confirmed that the investigation has been ongoing since early August. Investigate Midwest is not naming the employee due to concerns about employer retaliation.
The employee did not provide specifics about what the agency is seeking but said Tyson Foods is aware of the matter, and it is larger in scope than other PSD investigations.
The Tyson Foods chicken company is the largest chicken company in the country, with sales of approximately $53 billion last year. The company operates 183 poultry facilities in the US, including hatcheries, poultry processing plants and feed mills. The company has contracts with nearly 4,000 chicken farmers across the country.
The investigation follows Tyson Foods’ recent closure of nine meatpacking plants across the country, effective as early as 2023.
Tyson Foods did not respond to repeated requests for comment.
A chicken operation near Harrison, Arkansas, on March 31, 2024. photo by Julie Anderson, Investigate Midwest
Investigate Midwest filed a Freedom of Information Act with the USDA seeking records in May related to possible PSD actions against Tyson Foods after two former contract farmers told a reporter they had been contacted by the agency. Contract farmers said they were asked questions about the credit they took to work with the company and its operations.
The USDA denied the records request in June, citing a federal exemption for records that may relate to “records to confirm a pending or potential investigation.”
“(The exemption) protects law enforcement records if their release could reasonably be expected to interfere with the administration of law. “The proper purpose of law enforcement in this case is to enforce the Packers and Stockyards Act,” June’s response letter said.
The Midwest investigator has appealed the records denial and is awaiting a response from the department.
The Packers and Stockyards Act has seen major revisions in recent years, with the federal government showing increased interest in the poultry industry.
Recent updates include the required sharing of payment information between poultry companies and contract poultry farmers. The PSA has also been revised to prevent discrimination against livestock and poultry based on race, sex, age, or disability.
The USDA is still developing a proposed rule to address the “problematic” practices of contract farmers who take on excessive credit to work with companies. The organization said it expects to finalize the law early next year.
In May, Investigate Midwest reported that chicken farmers working with Tyson were left with millions of dollars in debt after the company closed plants. Many of them face bankruptcy and foreclosure, while others retire, find work outside of farming or sell their land to pay off debts.
Peter Carstensen, an antitrust expert and emeritus law professor at the University of Wisconsin Law School, said the PSD often creates investigative cases for companies to file formal complaints alleging violations of the act.
“It is clear that they are looking at whether they can make a claim that Tyson violated the provisions of the Packers and Stockyards Act by making various investments and then turning around and closing the plants,” he said.
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