USDA’s Grain Inspection, Packers and Stockyards Administration has enforced a $162,500 penalty on John Morrell & Co., Cincinnati, Ohio, related to erroneous calculations of yield and payments for pork carcasses.

The process began earlier in the month as GIPSA and Morrell agreed to a consent decision on the matter. Morrell was ordered to “cease and desist from failing to disclose” when the packer is missing data needed to accurately calculate the lean percent of a hog carcass or carcasses in a seller’s lot. The agreement also addressed substituting an undisclosed lean value for carcasses with missing data when calculating carcass-merit payments for hogs delivered to Morrell’s processing plants.

Of the $162,500 civil penalty that Morrell will pay, $37,500 will be held in abeyance until Morrell identifies underpaid sellers and makes restitution.

“The underpayment was due to an inadvertent mistake in how John Morrell calculated the price when hogs were missing probe data,” a Smithfield spokesperson told MEATPOULTRY.com.  The Smithfield representative reported that he company consulted with GIPSA to correct the mistake, and that John Morrell is reviewing its records to determine any and all producer reimbursements associated with this development.

Source: USDA, Meat & Poultry