R-CALF USA Takes Consolidation Matters Into Their Own Hands

By Kayla Sargent

Prior to the reintroduction of the Merger Moratorium, in an effort to address unfair markets in the beef industry due to consolidation, R-CALF USA, along with four cattle feeding ranchers from Iowa, Nebraska, Kansas, and Wyoming, filed suit on the “Big Four” meatpackers.  The suit alleges that the firms violated U.S. antitrust laws, the Packers and Stockyards Act, and the Commodity Exchange Act by depressing the prices paid to American beef producers.

The four firms in the suit, Tyson Foods, Inc., JBS S.A., Cargill Inc., and National Beef Packing Company LLC, collectively “purchase and process over 80 percent of the U.S.’s fed cattle” (raised specifically for beef production) each year.  The suit claims that the four companies conspired to depress fed cattle prices from at least January 1, 2015 to the present.

“R-CALF USA is taking this historic action to fulfill its promise to its members to prevent the Big Four packers from capturing the U.S. cattle market from independent U.S. cattle producers,” R-CALF USA CEO Bill Bullard, said.  “We have exhausted all other remedies but now, with the expert help of Scott+Scott and Cafferty Clobes, our members’ concerns will be addressed and we hope U.S. cattle ranchers can be compensated for years of significant losses.”

The lawsuit aims to recover losses suffered by cattle producers who sold fed cattle to any of the four firms from January 2015 to the present and any traders who transacted live cattle futures or options contracts on the CME from January 2015 to the present. The lawsuit was initially filed in the Northern District of Illinois.  It has now been moved to the U.S. District Court in Minnesota.

Three days after the R-CALF lawsuit was announced, consumers took note and followed with a suit of their own in the Minnesota Court.  The consumer case names plaintiffs Kenneth Peterson of Nevada and Richard Kimble of Wisconsin, but the representing firm, Hagens Berman, is soliciting anyone who purchased beef since 2015 to join in the class action suit.  Defendants in the suit are the same four beef packers as well as Agri Stats Inc., a firm that provides pricing reports to the industry.

The case claims that anyone who purchased fresh or frozen beef products from January 2015 to the present may be entitled to compensation.  It alleges that the “Big Four,” along with Agri Stats Inc., “entered into a conspiracy to maximize profits from the distribution channel of beef – by both extracting all gains from the ranchers who raised the cattle, as well as artificially inflating the price of beef being sold to the consumer.”

“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,” Steve Berman, managing partner of Hagens Berman and attorney representing consumers in the lawsuit, said. “The result: this $100 billion industry reaped billions of dollars in extra profits while consumers paid far more for beef than they should have. We intend to put an end to it.”


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