GIPSA fines Morrell $162,500 for 'underpayment'
July 25, 2011
by Bryan Salvage
WASHINGTON – Earlier in July, the US Department of Agriculture’s Grain Inspection, Packers and Stockyards Administration entered into a consent decision with John Morrell & Co., Cincinnati, Ohio.
Morrell was ordered to cease and desist from failing to disclose when missing data has prevented Morrell from calculating the lean percent of a particular carcass or carcasses in a seller’s lot; and substituting an undisclosed lean value for carcasses with missing data when calculating carcass-merit payments for hogs delivered to Morrell’s processing plants.
As a result, Morrell was assessed a civil penalty totaling $162,500 of which $37,500 will be held in abeyance until Morrell identifies underpaid sellers and makes restitution.
The Packers and Stockyards Act is a fair trade practice and payment protection law that promotes fair and competitive marketing environments for the livestock, meat, and poultry industries.
“The underpayment was due to an inadvertent mistake in how John Morrell calculated the price when hogs were missing probe data,” a Smithfield spokesperson told MEATPOULTRY.com. “That mistake was corrected in consultation with GIPSA, and John Morrell is currently undertaking an extensive review of its records in order to reimburse as soon as possible any producers that were underpaid.”