Tyson Foods has agreed to settle a lawsuit stemming from the company's decision in 2002 to restructure its live swine operations in Arkansas and eastern Oklahoma, according to a company news release.

Subject to a settlement agreement and court approval, Tyson will pay $42.5 million to 85 contract swine growing operations, which had claimed the company improperly failed to renew their contracts. In accordance with the settlement, the contractos will be required to properly close the manure management systems no longer in use on their operations.

"From the beginning, we've sought to resolve this matter in a way beneficial to everyone involved, including the contract growers," says Gene Leman, senior group vice president of Tyson Fresh Meats. "While we had hoped to avoid litigation, we're pleased a settlement has finally been reached."

Operating losses in Tyson's live swine division prompted the company to announce a restructuring in 2002 that resulted in the elimination of approximately 200 jobs, the closure of company-owned and leased pork operations, and discontinued relationships with about 130 contract growers.

The phase-out of these operations was completed in 2003. It reduced the total number of sows by 30 percent in Tyson's live swine business from approximately 100,000 to approximately 70,000 sows, and reduced finishing farms by 83 percent.

About one-quarter of the affected growers reached agreements with Tyson without litigation. On Sept. 12, 2002, the contract swine operations filed suit against the company in the Circuit Court of Pope County, Arkansas. A trial had been scheduled to begin Aug. 1, 2005.

Tyson still has hog breeding operations in the Holdenville, Oklahoma area and a limited number of farms in northwest Arkansas. Both provide weaned pigs to finishing operations in the Midwest. The company also retains some contract hog finishing operations in north central Missouri, closer to Midwest processing operations and grain supplies.

 

Tyson Foods