R-CALF files amended complaint to keep packer lawsuit alive
R-CALF USA submitted an amended complaint (see end of story) against the big four meat packers alleging anti-trust activity including price fixing and other anti-competitive behaviors.
Last fall, the Minnesota federal judge John R. Tunheim dismissed the lawsuit, and provided the plaintiffs 90 days to submit an amended complaint.
The updated complaint includes more recent data and details showing market anomalies following the Tyson plant fire in Holcomb, Kansas and during the COVID pandemic, said Bill Bullard, the organization’s CEO. “It is updated to include more details about the evidence we have that the alleged collusion transpired,” he said.
“We believe the additional detail included in the amended complaint addresses the concerns raised by the court,” said Bullard.
As for what will happen next, Bullard said he doesn’t know and their group is hopeful that the judge will not dismiss the case. “I don’t know if there will be another opposition brief. I don’t know what to expect next. We’re hoping that we will prevail with the new amended complaint,” said Bullard.
The suit filed by R-CALF USA, National Farmers Union and four cattlemen had been consolidated with several other suits that also accused the big four meat packers – Cargill, JBS, Marfrig/National Beef and Tyson – of using their market power to artificially depress cattle prices.
Last fall, Bullard was unable to provide detail as to the suit dismissal due to the ongoing nature of the lawsuit, but some news sources reported that the judge reported that the two main witnesses were not sufficiently detailed as to their relationship to the cattle market, and that their allegations were “mismatched.”
One witness reported being in a conversation with a packer employee about more than one packer reducing slaughter volumes in response to high cattle prices. The other witness reported what he or she described as a “queueing convention” which provided for cash sales to be established by a “complicated system requiring producers to either agree to a bid or reject it but then requiring the producer to accept only a bid greater than the original price,” the judge’s order said, according to a DTN report.
“If no buyer offers a higher price, the producer must return to the first bidder and offer a right-of-first refusal because that packer remains ‘on the cattle.’ Witness 2 described the negative consequences of a failure to adhere to this convention; producers could be blackballed or boycotted for breaking with it,” reported DTN.
Fed-cattle prices rose between 2009 and 2014.
Throughout November 2014, the cattle industry was told by a variety of marketing experts that fed-cattle prices would stabilize or keep moving upward in 2015 and remain at the new higher level for several years. Instead, the market crashed and has never recovered to 2014 levels.
Economist Dr. Robert Taylor’s April, 2022, cattle report, Harvested Cattle, Slaughtered Markets, offers some unique solutions to the buyer power that many believe is depressing live cattle prices.
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