A federal jury in Aberdeen, South Dakota today found the nation’s three largest beef packers liable to cattle producers for violating the federal Packers and Stockyards Act.
The class action lawsuit arose out of the misreporting of United States Department of Agriculture (USDA) boxed beef prices between April 2, 2001 and May 11, 2001. The 8-person jury unanimously found that Tyson Fresh Meats, Inc., (formerly IBP, inc.); Cargill Meat Solutions, (d/b/a Excel Corp.); and Swift Company (formerly Conagra Corp.) engaged in conduct during this period that had the purpose or effect of controlling or manipulating fed cattle prices.
The jury found that the three packers knew of the reporting error before it was made public and that their conduct during the period had the purpose or effect of injuring competition in the fed cattle market. The jury determined total monetary damages to all cattle producers who sold to the three packers during the period of the error to be $9.25 million, of which $4 million was attributed to Tyson, $3 million to Cargill, and $2.25 million to Swift. The smallest of the four packers originally sued, National Beef Packing Co., L.P., was found not liable.
Herman Schumacher of Herreid, South Dakota, one of the three plaintiffs who represented the class of cattle producers who sold during the period, hailed the jury verdict as "a victory for struggling cattle producers nationwide against the unlawful practices of the big packing companies." He added: "The packers for years have acted to crush competition and squeeze the small cattle producer to maximize packer profits. We are pleased that a jury of everyday citizens has held the packers accountable for their unlawful activities in this case." The jury trial lasted approximately two weeks. Separate court proceedings will now follow to permit individual cattle producers to recover the amounts of money they are owed as a result of the verdict.
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Center for Rural Affairs
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