Target joins antitrust lawsuit against Cargill and others over high beef costs

Two Minnesota titans — hometown retailer Target and commodities giant Cargill — are squaring off in an ever-expanding antitrust lawsuit alleging price gouging by the nation’s “Big 4″ beef producers.

Last week, Target joined dozens of plaintiffs, including Subway and Kroger, in an ongoing class-action lawsuit against Cargill, JBS, National Beef and Tyson. The meatpackers allegedly coordinated to reduce cattle slaughter volumes beginning in 2015 and continued reductions through the COVID-19 pandemic, generating “suspiciously high” beef prices and plenty of profits, according to the federal lawsuit.

In one instance, following a fire at a Tyson-owned beef plant in Kansas in 2019, competitors all slowed production, according to the lawsuit.

“The parallel and coordinated decrease in production in the face of a large supply restraint cannot be explained by legitimate reasons,” Target’s suit alleges.

Target charges the beef producers with violating the 134-year-old Sherman Antitrust Act but does not ask for a specific dollar amount. The company did not respond to a request for comment.

The meat companies deny the accusations.

“The claims lack merit and we intend to vigorously defend our position,” Minnetonka-based Cargill said in a statement. “Cargill is confident in our efforts to maintain market integrity and conduct ethical business.”

The case is the latest salvo in a widespread legal campaign alleging the most powerful players in America’s beef, pork and poultry industries conspired to artificially raise prices. Some companies have agreed to settlements amounting to hundreds of millions of dollars, but several cases are ongoing, including claims against pork suppliers like Minnesota-based Hormel Foods.

The only one of these cases that has gone to trial so far involved chicken producer Sanderson Farms, which is now owned by Cargill through a joint venture. In October a jury sided with Sanderson and found the company did not violate antitrust law.

A previous antitrust suit that cattle ranchers brought against the beef companies was dismissed in August by a federal judge in Minnesota. Beef packer JBS agreed to pay $52 million to settle claims by wholesalers in January and $25 million to settle additional claims with a separate class of plaintiffs a year ago.

The federal government also has waded into the antitrust fight. Last September, the U.S. Department of Justice filed a lawsuit against AgriStats, a defunct Indiana agricultural data firm that shared “anticompetitive” market reports, the department alleges, “and, in some instances, even encouraged meat processors to raise prices and reduce supply.”

The lawsuit Target joined is playing out before U.S. District Judge John Tunheim in Minneapolis. Plaintiffs include other fast-food restaurants like Sonic and Burger King and several national grocery chains and food distributors. The companies say the big beef packers “used private meetings and emails” to illegally coordinate supplies and prices, according to the suit.

In one instance, according to the complaint, an unnamed witness who worked at a JBS plant in Texas said a manager in contact with executives in Greeley, Colo., told him, ”We have had that agreement that we don’t kill while prices are up for a while.”

The industry has said the business is cyclical. In a court filing last year, Cargill said it does not control and cannot be held responsible for “the conduct of other market participants” and “global pandemics, weather, and changes in applicable laws and regulations.”