Last week, R-CALF USA filed a national class action lawsuit, alleging the four largest beef packers Tyson, Cargill, JBS and National Beef, had engaged in collusion to unlawfully depress prices paid to U.S. cattle producers. And in doing so, they increased both their margins and profits on the backs of the U.S. cattle producers. R-CALF further alleges the packers violated antitrust laws of the U.S., the Packers and Stockyards Act and the Commodity Exchange Act.
Tuesday, Bill Bullard, R-CALF CEO joined Clinton Griffiths, host of AgDay, and Davis Michaelson, guest host of AgriTalk, to talk about this lawsuit and details behind the situation.
“This litigation was filed to protect the integrity of our U.S. cattle industry,” Bullard said. But taking this step didn’t come lightly.
“We had exhausted all other remedies,” Bullard said. “We have gone to Congress and to the administration. We've asked them to conduct investigations into the structure of our cattle industry, we've asked them to identify what they believe to be the causes or cause of the anomalous price activities within our industry. We…concluded that the government has not acted and is not inclined to act.”
“Therefore, if we are going to preserve the U.S. cattle industry as we know it today, and not allow the Big Four beef packers to essentially ‘chickenize’ our industry by capturing control over the live cattle supply chain, then producers have to do it themselves,” he said. “We're confident this is a means by which U.S. cattle producers can recover the losses that we allege they have accrued as a result of the packers’ conduct, and hopefully make them whole again.”
The lawsuit alleges packers depressed cash fat cattle prices by 7.9%, Griffiths said, asking how R-CALF came to that number.
Bullard said that number was reached by their firm’s economic analysis of the cattle industry from at least January 2015 to present. “As we litigate, we hope to learn more,” he added.
“In our complaint, we allege for example, cattle producers have seen losses to their cattle as high as $500 a head, while at the same time the packers have been receiving record margins and profits. And so we allege this has been happening, at least since January 2015 and all the way to present. And everyone knows by virtue of the news reports, that packer margins have reached unprecedented levels here in recent years.”
R-CALF charges that the packers made a concerted effort to control producer returns, through the reduction of the volume of cattle they purchase on the cash market and reducing slaughter volumes.
Listen in to the full interview with Bill Bullard, CEO of R-CALF, at the player above.