USDA's Grain, Inspection, Packers and Stockyards Administration held a public meeting last night to discuss Meadowbrook Farms Cooperative’s plant closure, payment and cash-flow issues.
The meeting was designed to inform pork producers who've done business with Meadowbrook of their rights under the trust and bond provisions of the Packers and Stockyards Act. Meadowbrook temporarily ceased slaughtering operations effective Jan. 30.
Pork producer shareholders in Meadowbrook filed claims under the P&S Act after the co-op was more than 60 days past due on payment for their hogs sent to the packing plant. Reports are that some producers have not been paid as much as $150,000.
On Jan. 15, GIPSA gave Meadowbrook 30 days to increase its bond to $5,970,000 from $740,000 to cover producer claims. GIPSA Deputy Administrator Alan Christian adds that there is an investigation underway.
There are disputes as to what has lead to Meadowbrook's cash-flow problems.. Management points to a contract default by Triad Foods Group was the reason. However, a shareholder told Meatingplace.com that problems preceded Triad's cancellation. Further, that it was Meadowbrook's inability to fulfill its supply obligations that caused Triad to walk away from the contract.
According to other shareholders, some co-op members have had to liquidate their hog operations. Members report receiving $20 per head below the cash market since the cooperative began in 2004. Meadowbrook started with 200 shareholder members; as of last fall, that number dropped by half. The disparity in cash hog prices kept the plant from pulling in enough hogs to operate at capacity.