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BREAKING: Poultry Executives Indicted for Price-Fixing

Yesterday, The Wall Street Journal reported that several current and former poultry industry executives, including the CEO of Pilgrim’s Pride, were indicted on charges of price-fixing and bid-rigging chicken sold to restaurants and grocery stores from 2012 to 2017. Wholesale chicken prices climbed 11% during this period.

The indictment draws on text messages and other communications suggesting executives at Pilgrim’s Pride, owned by JBS, and Claxton Poultry Farms coordinated to raise their prices and avoid competing with one another on bids to supply restaurant chains.

These are the first charges in an ongoing antitrust probe by the Justice Department into poultry price-fixing. Several lawsuits allege that dominant poultry and pork companies conspired to coordinate production, fix prices, and suppress workers’ wages. The five largest corporations control 61% of the U.S. chicken industry, which makes collusion easier than in a less concentrated industry.

Photo courtesy of iStock by Getty Images

Farmers Join Labor Union in Call to Protect Workers, Citing Need for Farmer Labor Solidarity

A group of farmers and ranchers last week joined the leading meatpacking workers’ union to demand greater protections for meatpacking workers, acknowledging a shared fight against mistreatment by large meatpackers in the wake of COVID-19.

Dakota Rural Action (DRA), Northern Plains Resource Council, Western Colorado Alliance, and the Western Organization of Resource Councils, along with the United Food and Commercial Workers International Union (UFCW), released a statement last Thursday urging meatpacking corporations and public officials to immediately halt all line speed waivers in meatpacking plants, mandate distancing inside plants, and increase worker testing and protective equipment, among other measures. The groups represent more than 250,000 meatpacking workers and 15,000 rural organizers, many of whom are farmers and ranchers.

“We’re definitely aligned and have sympathies for the workers in the plants because we all feel like we’re being taken advantage of by those companies,” says Kathryn Bedell, a rancher and member of the Colorado Agricultural Commission. Ranchers pointed to historic alliances between farmers, workers, and consumers that helped spur meatpacking reforms as reason to revive those coalitions today. “The greater group of people you put together, the greater change you can implement … if you want to develop a new supply chain and you need input from the whole chain,” says Bedell.

COVID-19 has sickened and killed many meatpacking workers and disrupted the livestock industry. To date, at least 21,230 meatpacking workers have tested positive for COVID-19, and at least 77 have died, according to data collected by the Food and Environment Reporting Network. Outbreaks among workers shuttered many plants in March and April, bringing as much as 30% and 14% of hog and beef processing capacity offline, respectively.

Shutdowns created a backlog of slaughter-ready animals, which lowered livestock values. Hog farmers and egg producers have had to euthanize livestock to correct for sudden oversupply, and some contracts have been abruptly canceled. Meanwhile, grocery stores face meat shortages, and consumer prices are up.

On April 28, President Donald Trump used the Defense Production Act to declare food processing critical infrastructure and to reopen plants under unenforceable joint safety guidelines from the CDC and OSHA. Of the more than 260 meatpacking plants with confirmed coronavirus cases, only one is currently closed. The number of meatpacking workers with confirmed cases of COVID-19 has more than quadrupled since April 28.

As cases and deaths continue to rise, unions and advocates argue that meatpacking corporations and public officials have not done enough to protect meatpacking workers, roughly half of whom are immigrants facing immense pressure to return to reopened plants for fear of losing their jobs and health insurance. The UFCW calls for increasing testing and access to PPE, halting waivers that allow plants to operate at faster speeds, and reconfiguring plants to distance workers, even if this means slowing line speeds. Last week’s statement aligns several farmer and rancher organizations behind these demands.

“We do need to figure out a way to keep these cattle moving through the system, but we can’t sacrifice peoples’ health and their lives,” says Steve Charter, a third-generation rancher from Billings, Montana and board member of the Northern Plains Resource Council, which joined the statement with the UFCW. “It’s more important that we have some solidarity with the people who are not served by this whole system.”

The National Farmers Union, which represents 200,000 members, was not a part of this recent statement, but the farmer organization also supports stronger worker protections including mandatory distancing within plants, providing testing and PPE, and paid sick leave, according to a statement from President Rob Larew sent to Food & Power.

“The people who feed us deserve to feel safe in their workplaces. But protecting workers is also critical to farmers’ livelihoods, food security, and rural public health,” Larew said. Rural communities with meatpacking plants have five times more COVID-19 cases per capita than other rural communities.

The nation’s largest farmer organization, the American Farm Bureau Federation, did not respond for request to comment on this issue.

Charter and Bedell emphasized the importance of allying with workers to push for both immediate COVID-19 protections and longer-term food system reforms that will benefit food producers, workers, and also consumers. “None of these big companies have any interests but their own, and if we’re going to change that, it’s got to be a coalition of everybody that is not served well by this present system,” says Charter.

Both Charter and Bedell cited increased antitrust enforcement and fair dealing regulations as ways to target the corporate power that exploits both farmers and workers and to level the playing field for small to midsized players to support more regional and resilient food systems. They drew inspiration from past movements in which farmer and labor alliances pushed for the passage of the Sherman and Clayton antitrust acts.

“I imagine what we need is regional-sized processing spread out throughout the country,” says Bedell. She explained that it would be easier to put distance between workers and slow line speeds in smaller plants, adding that these plants would not knock out a substantial portion of production capacity if any one of them closed. Bedell says decades of policy choices, including lax antitrust enforcement, have squeezed out these smaller regional players. “Government in agriculture encouraged the ‘get big or get out’ thing … [but] maybe that efficiency is not worth the price we’re paying for it,” she said.

The UFCW has supported stronger anti-monopoly enforcement in agriculture by showing up to Justice Department hearings on the Packers and Stockyards Act (PSA) and submitting comments in support of rule-making to strengthen PSA enforcement. UFCW also stood with ranching groups in support of mandatory country-of-origin labeling, though the union did not call for increased antitrust enforcement in this statement.

Find and share this story originally published on Food & Power.

What We're Reading: Resources on Anti-Black Racism in the Food System

In this moment of national reckoning and mourning following the murder of George Floyd by the Minneapolis police, it is important to recognize and condemn systemic racism, including racism in the food system. American agriculture was built on the seizure of the land from Native Americans and the enslavement of black people, and the U.S. food system continues to perpetuate racial inequities today.

We recommend these resources to learn more about anti-black racism in the U.S. food system:

• “The sugar that saturates the American diet has a barbaric history as the ‘white gold’ that fueled slavery,” an article for The New York Times Magazine 1619 Project by Khalil Gibran Muhammad.

• Progressive Governance Can Turn the Tide for Black Farmers, a report by the Center for American Progress.

• “How USDA distorted data to conceal decades of discrimination against black farmers,” an investigation by Nathan Rosenberg and Bryce Wilson Stucki for The Counter.

• “Food apartheid: the root of the problem with America's groceries,” an interview with food justice activist Karen Washington for The Guardian.

• “Retail Redlining: One of the Most Pervasive Forms of Racism Left in America?” by Emily Badger for CityLab.

• “Examining the Impact of Structural Racism on Food Insecurity: Implications for Addressing Racial/Ethnic Disparities,” a study by professor Angela M. Odoms-Young published in the Family & Community Health journal.

• “‘Setting a place at the table’: The black chefs unearthing history,” by Patrik Jonsson for The Christian Science Monitor.

About the Open Markets Institute

The Open Markets Institute promotes political, industrial, economic, and environmental resilience. We do so by documenting and clarifying the dangers of extreme consolidation, and by fostering discussions of ways to reestablish America’s political economy on a more stable and fair foundation.

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