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Two cattle farmers are alleging Tyson and a number of other meat packers conspired together in a price-fixing scheme that hurts both beef producers and consumers.
According to the class action lawsuit, Tyson schemed with Cargill and other meat packing defendants to lower the price of fed cattle.
Plaintiffs Douglas Wright and Sam Mendenhall say their cattle farms suffered as a result.
“Beginning no later than January 2015 and continuing today Defendants conspired to suppress the price of fed cattle they purchased in the United States,” alleges the Tyson beef price-fixing class action lawsuit.
“Defendants’ coordinated conduct, including slashing their respective slaughter volumes and curtailing their purchases of fed cattle in the cash cattle market, caused an unprecedented collapse in fed cattle prices in 2015. Defendants continued to suppress the price of fed cattle through coordinated procurement practices and periodic slaughter restraint. Defendants’ conspiracy impacted both the physical fed cattle market and the market for live cattle futures and options.”
The plaintiffs contend that Tyson and other “middle-men in the supply chain” failed to pass on the lower prices to consumers, making their gains illicit and illegal.
“The only parties that win are the large beef packers who use their collective market power to squeeze both producers and consumers,” contends the beef price-fixing class action lawsuit.
According to the Tyson class action, a federal law was enacted in the 1890s to combat just such a scheme. The Sherman Act came into being over concerns about large meat packers using their collective power to reduce what they paid to cattle farmers and, in turn, raising prices for consumers.
Tyson and other meat packers were hit with similar price-fixing allegations in a class action lawsuit lodged earlier this year. According to the earlier class action lawsuit representing consumers, Tyson, Cargill, and other beef manufacturers created an artificial shortage in the market and then increased the price of beef for consumers.
According to the Tyson beef price-fixing class action lawsuit initiated by the cattle farmers, prices demonstrate the effect of the conspiracy.
From 2009 to 2014, prices for cattle farmers increased steadily. However, despite experts’ forecasts that the prices would stabilize at a higher rate in 2015, cattle farmers experienced an “unprecedented collapse” in the price of the cattle they attempted to sell during that period.
The defendants, Tyson, JBS (a Brazilian based meat company), Cargill, and National Beef, operate in an industry conducive to price-fixing, alleges the Tyson beef price-fixing class action lawsuit. There are few operators and the cost of entry into the industry is high.
Additionally, say the plaintiffs, representatives of each company have exclusive means to communicate with each other and ample opportunity to enter and run such a conspiracy.
The Tyson beef price-fixing class action lawsuit is seeking damages as well as a court order stopping the alleged conspiracy.
The plaintiffs and proposed Class are represented by William R. Sieben, Alicia N. Sieben, and Matthew J. Barber of Schwebel Goetz & Sieben, Ward A. Rouse of Rouse Law PC, Richard M. Paul III and Sean Cooper of Paul LLP, and Eric H. Gibbs, Michael L. Schrag, Joshua Bloomfield, and George Sampson of Gibbs Law Group LLP.
The Tyson Beef Price-Fixing Class Action is Wright, et al. v. Tyson Foods Inc., et al., Case No. 0:19-cv-01350-WMW-TNL, in the U.S. District Court for the District of Minnesota.
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