A federal court in Alabama found Tyson guilty of antitrust violations under the Packers and Stockyards Act. The court awarded $1.28 billion to a group of cattlemen after finding the nation’s largest beef packer had unfairly manipulated prices.
Attorneys for Tyson say they plan to appeal the class action verdict. The plaintiffs say Tyson relied on this captive supply when cattle prices were high and entered the cash market for cattle only when prices were low, depressing the cattle markets as a result.
Eight years have passed since six cattlemen filed a class-action lawsuit on behalf of up to 30,000 producers who sold cattle to Tyson in the cash market from February 1994 to October 2002.
Central to the cattlemen’s claim is Tyson’s use of marketing agreements in which cattle producers pledge to ship a certain number of cattle to a packer. The plaintiffs contend Tyson used those agreements to drive prices down, threatening the livelihood of thousands of ranchers.
The final result of this case could have far-reaching effects on the way livestock is marketed, not just in the beef market, but the pork market as well. If the legality of contracts is called into question, the ramifications could be huge for the pork industry, as only about 13.5 percent of the U.S. hogs marketed are sold on the spot market.