- Judge declares mistrial in chicken antitrust case
According to AgWeb, a mistrial has been declared by a federal judge in Denver overseeing the trial of 10 current and former chicken company executives facing the possibility of prison and million-dollar fines after being charged with price-fixing and bid-rigging from 2012 to early 2019.
Jurors told U.S. District Judge Philip Brimmer on Thursday they were deadlocked after a seven-week trial of men who had worked for U.S. chicken producers, including Tyson Foods Inc., Pilgrim’s Pride Corp. and Perdue Farms LLC, failing to reach a verdict after almost four days of deliberations.
The Justice Department had brought the suit, and the trial was the first after a years-long investigation into the $95 billion chicken market.
The Denver jury was asked to decide whether the defendants agreed to coordinate pricing and bids to limit competition. But the jurors weren’t able to agree on a verdict, even after Judge Brimmer on Wednesday instructed them to keep trying to work through their impasse. The judge set a retrial in February after prosecutors said they will go forward with the case, while each of the defendants face a single charge of conspiring to restrain trade.
- Secretaries demand shipper action
According to DTN, a pair of Cabinet secretaries have written to the world’s largest ocean carriers demanding they treat U.S. agricultural exports fairly at West Coast ports and “restore reciprocal treatment of imports and exports that is inherent in trade.”
Agriculture Secretary Tom Vilsack and Transportation Secretary Pete Buttigieg wrote the presidents and executives of a dozen major global shipping lines to relieve the supply chains and consider options of other ports beyond the Ports of Los Angeles and Long Beach, California. The secretaries cited the “unprecedented disruption to the flow of goods worldwide” and the need for both government and industry “to pull every lever and maximize the use of our existing infrastructure to relieve congestion and shipping disruptions.”
For more than a year now, global carriers have been delivering cargo containers to U.S. ports, then returning with empty containers rather than shipping agricultural goods back to Asia – especially China. The shippers maintain they get more money to deliver containers to Asian shippers that can be quickly flipped for exports back to the U.S. rather than having to deal with handling U.S. agricultural commodities.
Dairy exporters thanked the secretaries for the letter to “call out profiteering by foreign-owned carriers” after stating that the supply chain problems have cost the dairy industry at least $1.3 billion over the first three quarters of 2021.
The secretaries stated in their letter that restoring reciprocal treatment of products is critical while shippers of U.S.-grown agricultural commodities and goods have seen reduced service, everchanging return dates, and unfair fees as containers have short-circuited the usual pathways and been rushed to be exported empty – an imbalance, according to the secretaries, that is not sustainable and contributes to the logjam of empty containers clogging ports.
The secretaries also highlighted that ocean carriers have suspended service to the Port of Oakland, which has caused agricultural exporters to truck their products to Los Angeles and Long Beach, which are already congested, adding that “the poor service and refusal to serve customers when the empty containers are clearly available is unacceptable and, if not resolved quickly, may require further examination and action by the Federal Maritime Commission.”
Yet, after a year of complaints to the Federal Maritime Commission, the commission hasn’t been aggressive in dealing with the issue of empty containers. The commission did create an advisory committee in October, and the House passed a bill last week, the Ocean Shipping Reform Act, that garnered wide bipartisan support, that would give the commission more ability to pressure shippers into filling containers rather than loading empty ones at port.
- Prop 12 modifications helpful, law remains flawed
The North American Meat Institute (NAMI) said proposed rules to implement California’s Proposition 12 animal confinement law remain flawed and more time is needed for compliance despite modifications to the proposed rules.
The California Department of Food and Agriculture (CDFA), the agency tasked with developing rules to implement the law, announced modifications to Prop 12 and NAMI said some of the changes do recognize the complexity of the pork supply chain but they do not go far enough and suggests “rather than apply ‘band aids’ to address challenges, that CDFA should go further and afford everyone in the supply chain – from hog producers all the way to foodservice and retail entities – the 28-month preparation time the law, and the voters, contemplated before enforcing any aspect of Prop 12 or its regulations.”
California voters approved Proposition 12 back in 2018. The law establishes specific minimum requirements for confinement of laying hens, breeding pigs and veal calves beginning in 2022, so the deadline for producers to comply with the law is fast approaching. Two food manufacturers have said they will comply with Prop. 12 when it goes into force January 2022.
David Eaheart, senior director of communications and brand marketing at Seaboard Foods said “Seaboard Foods will no longer sell certain whole pork products into California due to California’s Proposition 12.”
Hormel Foods Corp. has assessed Proposition 12 and, while it is still awaiting final clarity on specific details and rules, the company is preparing to fully comply when the law goes into effect on January 1. The company’s Applegate portfolio of products already complies with Proposition 12, but added that although they “…face no risk of material losses from compliance with Proposition 12” the law will add complexity to the company’s supply chain, including costs associated with compliance.
- Compromise Bill gains attention: S. 3229 has all the cattle groups weighing in
Tri-State Livestock News reported the House of Representatives passed a standalone cattle contract library bill introduced by South Dakota Congressman Dusty Johnson with a vote of 411-13.
The House also voted 418-9 to advance H.R. 5290, introduced by House Agriculture Committee Chairman David Scott (D-GA), extending authorization for livestock mandatory reporting (LMR) through September 30, 2022.
The National Cattlemen’s Beef Association cheered the House passage of both pieces of legislation, saying they secured the introduction of the Johnson bill and that LMR is absolutely essential to fair, competitive, and transparent cattle markets.
Iowa cattle feeder, Eric Nelson calls the compromise bill a “feel good thing,” saying that a friend of his who worked as a hog marketing agent in 2009 told him recently that the hog contract library did not preserve the small hog producers, but rather, it hastened their decline.
The industry is in agreement that the cash market has gotten too thin to accurately determine the value of market-ready cattle in a timely manner. The 50-14 regulation would have required the bigger packers to purchase 50 percent of their needs on the cash or “spot” market and to take delivery within 14 days. The compromise bill would require USDA to implement a cattle contract library, instate regional cash trade minimums and maximums, inhibit packer confidentiality claims which would increase reporting, and require more timely reporting of cattle carcass weights and require packer to report the next 14 days’ slaughter numbers.
R Calf Region III Director, Brett Kenzy said that with 10 sponsors on Grassley’s 50-14 bill, and 5 sponsors on Fischer’s original cattle contract library bill, it is curious why the industry dropped support for 50-14, and said this bill is not a true “compromise” with very little if any of the Grassley bill is included – although several groups have voiced support for Fischer and Grassley’s S.3229, known as the Cattle Market Compromise Bill.
James Halverson, whose South Dakota Stockgrowers Board of Directors voted 15-10 to support the bill, said his group wasn’t satisfied with the regional cash minimums offered in the bill and that they will continue to push for more – as well as more transparency according to his group’s policy.
The Independent Beef Association of North Dakota, chose not to support the bill, stating their “membership felt at this point that there are too many loopholes,” unanswered questions, that it will take too long to implement, and giving more authority to USDA doesn’t sound great.
R-CALF stated publicly they did not support the bill after submitting to the sponsors three different memos which included proposed amendments to the legislation.
Kenzy said the bill takes a snapshot of the last 18 months – the poorest in the history of the cattle business – and makes that the baseline, limiting the mandatory minimums of the best cash trade areas by tying them to the lowest cash trade areas, and that his greatest opposition lies not in the idea that it does not do enough, or does not do enough quickly enough, its greatest danger is the precedent that it sets – fearful that if Congress deems ‘regionalization’ to be legal, it will change the industry forever. The Packers and Stockyards Act of 1921 was enacted to “protect members of the livestock, meat and poultry industries from unfair, deceptive, unjustly discriminatory and monopolistic practices….” Kenzy fears if regionalization is enshrined in law by this bill that we will have once again muddied the water – perhaps irreparably.
The U.S. Cattlemen’s Association voiced their immediate support for the bill, confident the Cattle Price Discovery and Transparency Act will deliver on its promise to restore robust price discovery and provide market participants with the information they need to make savvy marketing decisions, and commends Senators Fischer, Grassley, Tester, and Wyden for coming together on a bipartisan solution that has broad support from both lawmakers and producer groups.
The groups Vice President Justin Tupper said reforming the cattle marketplace to drive transparency and true price discovery is a core tenet of how we can strengthen the U.S. cattle producer’s bottom line, and that they look forward to working with members of the Senate and House Agriculture Committees to quickly advance this bill.
Tupper explained that it is crucial for the industry to gather round a bill that will pass, and to work with legislators who have proven themselves to back the cattle industry.
In response to those who might fear that if the compromise bill passes, the industry will not get support for additional issues, Tupper confirmed this is no concern, stating that “when this passes, the work begins. We have to get something done. We can’t shoot for the moon like we have for 25 years. We can’t have an end all be all bill. It won’t happen.”