The meat and poultry processing industry endured a challenging year on many fronts in 2019, but it will survive, grow and continue to meet the challenge of feeding a global population that increases exponentially. Looking back at some of the year’s high-profile headlines, it was a common theme to see stakeholders in the processing industry under the gavel and facing opposition and litigation throughout 2019.
In a fix
A price-fixing lawsuit that started in September 2016 with Falconer, New York-based food distributor Maplevale Farms filing a lawsuit alleging that Tyson and several other poultry companies conspired as early as January 2008 to “fix, raise, maintain, and stabilize” prices for broiler chickens, continued through 2019.
Additional lawsuits have been filed since, including one earlier in 2019 when Kraft Heinz Co., Conagra Brands Inc., Nestle USA Inc. and Nestle Purina Petcare Co. filed a lawsuit in Chicago federal court, claiming Tyson Foods Inc., Pilgrim’s Pride Corp. and other poultry processors conspired to inflate chicken prices.
In January, Darden Restaurants Inc., parent company of Olive Garden, Cheddar’s Scratch Kitchen and Longhorn Steakhouse, filed an antitrust suit in the US District Court for the Northern District of Illinois based on similar allegations.
In May 2019, Walmart Inc. filed a separate lawsuit in the US District Court for the Western District of Arkansas claiming various US poultry companies conspired to inflate chicken prices. The antitrust lawsuit included Pilgrim’s Pride Corp., Sanderson Farms Inc., House of Raeford Farms Inc., Mar-Jac Poultry Inc., O.K. Foods Inc., Foster Farms LLC, Mountaire Farms Inc. and Agri Stats Inc. It stated the chicken producers engaged in price fixing from 2008 to 2016.
“By filing a complaint separate from the class action that began in 2016, we believe we can best protect our business and our customers from artificially increased costs,” said Randy Hargrove, Walmart’s senior director of corporate communications in a statement. “For more than 50 years, we’ve focused on giving our customers great deals with an everyday low-cost mindset that is core to who we are.”
Tyson Foods Inc. has possibly dealt with the greatest backlash in 2019. Not only have plaintiffs implicated it in price-fixing lawsuits, but it’s been the target of other litigation as well.
In July of 2019, two non-profit groups, Food & Water Watch and Organic Consumers Association (OCA), sued Tyson in Washington, DC, superior court alleging the company misled consumers with claims it produces chicken products with humane and sustainable practices. The groups’ suit alleges Tyson’s claims of humane treatment of animals and environmental stewardship amount to false marketing and advertising.
Tyson did not comment on the litigation, but did release a statement saying, “…we believe in transparency and have been increasingly open about our business as we’ve shown through our annual sustainability reports. We’re committed to continuous improvement in everything we do. That’s how we’ve become the world’s leading producer of no-antibiotics-ever chicken, why we employ more than 2,500 food safety professionals, implemented third-party animal welfare audits and video monitoring, have the largest team of animal welfare specialists, and have set a science-based target of reducing greenhouse gas emissions 30 percent by 2030.”
The groups’ complaint claims that during the past 12 years the company has permitted intentionally cruel treatment of chickens used to produce its products, alleging that the proof is in about 12 undercover investigations during that time. The complaint attacks Tyson’s claims of environmental stewardship as well stating, “Contrary to Tyson’s representations, Tyson regularly fails to comply with environmental laws and is the second largest polluter in the United States.”
In addition to price fixing, a class-action lawsuit filed in US District Court for the District of Maryland in September of 2019, accused 18 poultry processors, including Tyson Foods Inc., Perdue Farms, Sanderson Farms Inc., Pilgrim’s Pride Corp. and Case Foods, of conspiring to fix and depress wages and other compensation paid to hundreds of thousands of workers. Agri Stats Inc. and Webber, Meng, Sahl and Co. Inc. (WMS) also are named as defendants in the lawsuit for allegedly facilitating the exchange of compensation data, according to court documents.
The complaint alleges executives held secret meetings that often coincided with the US Poultry & Egg Association’s (USPOULTRY) annual Human Resources Seminar, but weren’t a formal part of the seminar. Court documents state executives shared information at these meetings and ultimately lowered wages and benefits of class members artificially. The lawsuit also alleges personal meetings took place during other industry-sponsored events with the same outcome of depressed wages and benefits.
According to the lawsuit, wages were fixed through the exchange of non-public wage and benefits information through surveys conducted by Agri Stats and WMS, as well as through plant managers exchanging information which was later passed on to executives who used the information in the alleged wage fixing.
No to CAFO
Public opposition to controlled animal feeding operations (CAFOs) not only stalled the expansion of Kingsville, Missouri-based Valley Oaks Steak Co., the costs the vertically integrated beef processor incurred ultimately led to the operation closing in 2019.
The company employed about 70 people and slaughtered 60 head of cattle per day. In June of 2018 Valley Oaks applied and was approved to increase its on-site feeding operation from 1,000 head to 6,999 head by the Missouri Dept. of Natural Resources. However, landowners around the business and nearby Powell Gardens botanical garden protested the expansion claiming threats to water quality, property values and the risk of disease-spreading pests to the botanical center.
The legal battle continued, changed shape and added players until it took its ultimate toll on Aug. 19, 2019, when Valley Oaks announced it would shut down operations.
The company said economic factors and a “constant barrage of legal battles and extensive marketing efforts needed to counter misinformation” led to the closing.
In September of 2019, community and environmental groups launched a change.org petition calling for a moratorium on CAFOs in Nebraska. Costco and its Lincoln Premium Poultry business in Fremont, Nebraska, which includes a 75,000-sq.-ft. hatchery, a 400,000-sq.-ft. processing facility, a feed mill and other improvements stirred support for the petition.
The petition stated Costco and Lincoln Premium planned to build 520 barns to hold up to 47,500 birds per flock, up to six flocks a year, as well as the announcement of another project for Central Nebraska by its governor, Pete Ricketts.
“It’s unfortunate that people not familiar with large scale food production have developed fears related to our industry,” said Lincoln Premium spokeswoman Jessica Kolterman. “We will continue to educate the public about our farmer partners and our new facility.”
Addressing the issue
Today, almost all large processors, and many mid-size and small companies, try to maintain the transparency of their operations through some kind of annual report. These reports usually cover initiatives, standard operating procedures, expectations and performance regarding humane animal handling, environmental stewardship, food and worker safety, community outreach, etc.
While individual businesses within the industry all work to present themselves in a better light to the consumer, the North American Meat Institute (NAMI) developed an initiative to assist animal producers and meat and poultry processors do a better job in the animal welfare arena. Eric Mittenthal, vice president of sustainability for NAMI, describes the initiative, Trust in Animal Protein, as “…a universally adhered-to, globally accepted, outcomes-based standard for animal welfare at all points in the supply chain.”
Mittenthal says it will take time and perseverance to achieve Trust in Animal Protein’s goal, but NAMI is committed to the initiative and telling the industry’s story.
“We have a great story to tell,” Mittenthal said.