A class-action lawsuit claims that four large beef-packing companies and an industry information-sharing service have schemed to suppress the prices they pay for cattle and inflate the prices they charge consumers.
Lawsuit accuses Cargill, Tyson and other meat producers of price-fixing
Cargill, Tyson and others accused of fixing costs; state cattlemen's group is skeptical.
April 30, 2019 at 10:22PM
The lawsuit filed in U.S. District Court in Minnesota names Cargill, Tyson Foods, National Beef Packing and JBS USA Food Co. — who collectively control 70% of U.S. beef processing — as defendants. Agri Stats Inc., a price forecasting service for beef, pork and poultry, is also named as a defendant.
It's the latest in a series of similar lawsuits against meat processors filed by Seattle law firm Hagens Berman and makes accusations that have been investigated by the federal government in recent years.
The plaintiffs, a beef consumer in Wisconsin and one in Nevada, argue that the decoupling of the price of cattle and the retail price of beef is the result of price-fixing by the meatpacking companies, which boosted their profit margins in recent years. Cattle prices fell in 2015 and have not recovered, while the price of beef at the grocery store remained roughly constant.
"Our complaint alleges that families nationwide have been overpaying for years for beef products they buy routinely, unknowingly paying inflated prices fixed by a scheme to limit beef supplies," said Steve Berman, managing partner at Hagens Berman.
The lawsuit, filed on Friday, names any American consumer who has bought beef directly or indirectly from the defendants as a member of the class. Hagens Berman specializes in class-action lawsuits and has filed similar complaints against the pork and poultry industries, naming Agri Stats as a defendant in those actions as well.
Cattle farmers in Minnesota — the 10th largest beef-producing state in the U.S. — are skeptical of the lawsuit, said Ashley Kohls, executive director of the Minnesota State Cattlemen's Association whose family raises beef cows near Hutchinson.
Concerns about the prices meatpackers pay for cattle, and whether the market's been tampered with, have been investigated before.
In 2016, the U.S. Senate Judiciary Committee looked into the decline in cattle prices and said it found no evidence of collusion.
In 2018, the U.S. Government Accountability Office looked into the matter at the behest of the Judiciary Committee. The office reported that its analysis of the data "indicated that competition levels among packers that slaughter and process fed cattle did not appear to affect the national price changes in the fed cattle market."
Kohls said that while farmers have been frustrated with the low prices for their cattle, the market is rebounding and her members are satisfied that the meatpackers are not conspiring to manipulate the market.
"There's a lot of confusion about why this lawsuit is necessary," Kohls said. "In our opinion, the answers that they're trying to find in the lawsuit have already been found, in the Senate Judiciary Committee investigation and the GAO study."
Cargill issued a statement saying the lawsuit lacks merit.
"For many years, Cargill has served as a trusted partner to American cattle ranchers, committed to supporting their family farms and livelihoods," the statement said. "We believe the claims lack merit, and we are confident in our efforts to maintain market integrity and conduct ethical business.
Adam Belz • 612-673-4405 Twitter: @adambelz
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