Iowa reaches settlement with Japanese subsidiary

by Meat&Poultry Staff
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DES MOINES – The State of Iowa and a subsidiary of Osaka, Japan-based Nippon Meat Packers Inc., have reached a settlement resolving a dispute over the constitutionality of Iowa’s ban against processors vertically integrating into pork production in the state.

US District Judge Robert Pratt approved a consent decree on April 19 that was jointly submitted by the state and Texas Farm LLC of Perryton, Texas which owns hog production facilities throughout the US. Texas Farm is owned by Nippon Meat Packers.

Texas Farm plans to expand its hog contracting business, however Iowa law prohibits a processor from directly or indirectly operating, financing or controlling a swine operation in within the state or contracting with Iowa producers for the care and feeding of swine in Iowa. This formal agreement, which also institutes contract grower rights, addresses the state’s legal concerns.

“This resolution with Texas Farm protects the rights and interests of the state’s contract growers,” Attorney General Tom Miller said. “At the same time it allows the company to do business here in Iowa and expand its operations.”

Provisions of the agreement include contract grower rights that allow Texas Farms' Iowa contract growers to be a “whistleblower,” to join an association, to use a contract grower’s lien, the right to review production contracts and the right to disclose contractual terms. In return for Texas Farm’s compliance with its commitments under the settlement, Iowa will not enforce the ban on packer involvement in swine production with respect to Texas Farm. The agreement expires on Sept. 16, 2015.

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