Billings, Mont. – R-CALF USA and 53 other organizations have joined in filing a friend-of-the-court brief on behalf of plaintiffs in an appeal of a lawsuit against Pilgrim’s Pride Corporation (Pilgrim’s Pride) for violating the Packers and Stockyard Act. The lawsuit R-CALF USA joined as an amici party is Cody Wheeler, Don Davis, and Davey Williams v. Pilgrim’s Pride Corporation.

“Even though the plaintiffs are contract poultry producers, the appeal of the lawsuit’s outcome will be critically important to the cattle industry because there is a tremendous push to consolidate and integrate cattle production,” said R-CALF USA President/Region VI Director Max Thornsberry, a Missouri veterinarian who also chairs the group’s animal health committee. “We’ve already witnessed the poultry and the hog industries succumb to vertical integration, and with ever-increasing contract growing of cattle under specific buyer standards or programs in our industry, we must take steps to preserve the independence of our producers.”

It is standard in the poultry industry for farmer-growers to raise broiler chicks furnished to them under specific standards established by the 'integrator' providing the chicks – in this case, Pilgrims Pride. The farmer-growers also build and maintain the grower houses at their own expense, then feed and manage the flocks according to the exact methods prescribed by the integrator. Payments for their efforts are made via a tournament system, in which all growers in a region are compared to each other and paid more or less for their production based upon efficiency. In the case of Pilgrim’s Pride, the past CEO and founder of the company, Lonnie "Bo" Pilgrim, also raised broilers at his farm and was not paid under the tournament system like the other farmer-growers, but paid significantly more.

The attorneys for Pilgrim’s Pride argued that Bo Pilgrim’s increased pay was justified, as he had to pay up front for the chicks, feed and medication. However, the lower court found that this was misleading and Bo Pilgrim was given 60-days to reimburse the company, while the broilers were finished in 42 days – meaning Pilgrim would be paid for his broilers before payment to the company was due.

“The lower court rightly ruled that according to the clear terms of the Packers and Stockyards Act, Pilgrim’s Pride was in violation of the law,” said Thornsberry. “The lower court found that the law reads plainly, particularly in this case.”

The Packer and Stockyard Act (PSA) states, in part:

Packers and Stockyards Act, 7 U.S.C. §§ 192(a)-(b), It shall be unlawful . . . for any live poultry dealer with respect to live poultry to: (a) Engage in or use any unfair, unjustly discriminatory, or deceptive practice or device; or (b) Make or give any undue or unreasonable preference or advantage to any particular person or locality in any respect, or subject any particular person or locality to any undue or unreasonable prejudice or disadvantage in any respect.

Following the favorable lower court decision, attorneys for Pilgrim’s Pride filed an appeal claiming that Wheeler, Davis and Williams had not demonstrated a clear negative effect on competition. The American Meat Institute and the National Pork Producers Council, as well as Tyson Foods and Cargill Meat Solutions also have filed an amicus curiae brief on behalf of Pilgrim’s Pride in this suit.

According to Thornsberry, in order for the PSA to adequately prevent anticompetitive practices in the marketplace, the lower court decision finding that producers do not need to prove an overall harm to competition in order to seek protection under the PSA must be upheld on appeal.

“At issue for cattle growers is the continued contraction of producers and feedlots and the consolidation of the entire meat industry, which promotes the packers’ exercise of market power that is detrimental to cattle producers,” he pointed out. “Market consolidation and the anticompetitive practices that emanate from that consolidation are a serious threat to our livelihoods and our nation’s food security.

“We are proud to stand with the other 53 organizations that are willing to fight to protect the competitiveness of our U.S. livestock markets,” Thornsberry concluded. R-CALF USA has been, and will remain, on the front line fighting for independent cattle growers and defending American agriculture for the good of all.”