Tyson Fresh Meats and the state of Iowa have reached an agreement regarding packer ownership of livestock and the company's hog production contracts. Iowa has a ban on packer ownership of livestock, but this new agreement waives that and allows the company's contract hog growers certain protections.

Terms of the agreement are outlined in a consent decree approved Friday by a federal judge, reports Meatingplace.com. It resolves a dispute regarding the constitutionality of the state's ban that prevents processors from establishing a vertically integrated pork system.

Tyson contracts with independent growers to raise hogs which are then slaughtered through company-owned plants in Columbus Junction, Perry, Storm Lake and Waterloo, Iowa. The settlement provides that Tyson Fresh Meats, a subsidiary of Tyson Foods in Springdale, Ark., can maintain its business operations including hog contracting in Iowa.

The Iowa/Tyson agreement, allows contract growers certain rights, including:

  • The right to be a "whistle-blower"
  • The right to join an association
  • The right to use a contract producer lien
  • The right to publicly discuss and disclose the terms of their contracts, according to a statement by Iowa Attorney General Tom Miller.

Tyson also has agreed that it cannot finish hogs in company-owned facilities before Sept. 16, 2010, and that for two years 25 percent of the swine slaughtered at its Iowa plants will be bought on the open market from sellers other than Tyson affiliates.

"Our long-term business plan is to continue to rely on independent producers and we do not intend to change our long-term model to a vertically integrated system," the company said.

Miller emphasized that the state made no allegations that Tyson has violated state law. "On the contrary: Tyson approached our office to begin negotiations prior to engaging in production contracting," he said.

The agreement with Tyson is similar to others made with Hormel Foods, Cargill and Smithfield Foods. This agreement will expire on Sept. 10, 2015.

Source: Tyson, Meatingplace.com