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- DTN Headline News
Poultry Growers Sue Tyson Over Shutdown
By Chris Clayton
Monday, July 15, 2024 3:37PM CDT

OMAHA (DTN) -- A pair of Missouri's top political leaders are going after Tyson Foods, alleging the meatpacking giant deceived Missouri farmers when Tyson closed a poultry-processing plant in Dexter, Missouri, last year.

U.S. Sen. Josh Hawley and state Attorney General Andrew Bailey, both Republicans, are lending their support to a lawsuit filed against Tyson Foods on behalf of at least 45 chicken growers in Missouri and Arkansas. Hawley wrote Tyson's CEO last week questioning claims Tyson had made about selling the Dexter facility in southeastern Missouri to another chicken processor. Bailey stated Friday on social media that his office plans to intervene in a class-action lawsuit filed on behalf of chicken growers.

WHEN TYSON SHUTDOWN DEXTER PLANT

Tyson shut down its hatchery and broiler operations around Dexter last October. The move left broiler producers in the area with no market to sell chickens while at least some producers were left staring at millions of dollars of debt for loans used to build poultry buildings to Tyson's standards.

Tyson sold the Dexter facility to egg producer Cal-Maine Foods. Raising chickens for egg production requires an entirely different type of barns and facilities than raising chickens for a broiler operation.

The lawsuit filed in June is led by Grandview Farms out of Maynard, Arkansas, which had contracted three farms since 2020 to raise Tyson chickens. The case also seeks class-action status for an estimated 45 other poultry farmers who were affected by the Tyson closure. The defendants are Tyson, Cal-Maine Foods and Mark Avery, who was manager of the Dexter facility for Tyson.

While the case was filed in state court, Cal-Maine and Tyson immediately requested to move the case to the U.S. District Court for the Eastern District of Missouri.

One argument Tyson and Cal-Maine made for moving the case to federal court is that the alleged damaged claimed by the farmers is more than $5 million. Along with that, Tyson and Cal-Maine cite the number of impacted farmers is "at least 105 members," though the attorney for Grandview Farms stated only 45 farmers were involved, which justified keeping the case in Missouri state court.

A federal magistrate last week gave Tyson, Cal-Maine and Avery until July 19, to file their motion to dismiss the case.

The lawsuit led by Grandview Farms alleges Tyson's effort to close Dexter was an "anticompetitive and fraudulent scheme to eliminate competition for the processing of poultry; reduce the supply of broiler chickens, and achieve artificially high profits." The producers alleged Tyson's moves to close the broiler processing facility in Dexter had devastated the community and area chicken growers.

Producers claim they took on heavy debt loads before Tyson announced the closure. A Missouri farmer stated Tyson required him to spend $200,000 on new nesting boxes just a few months before the facility closed. Another Arkansas farmer that had started contracting with Tyson in January 2022 also spent $2.6 million to build chicken houses.

Tyson had filed documents with the Securities and Exchange Commission in 2021 and executives also discussed in an earnings call about efforts to cut $1 billion in production costs by the end of 2023.

SENATOR WRITES TYSON CEO

Hawley last week wrote Donnie King, CEO of Tyson Foods. Hawley stated that King had told Hawley Tyson would not prevent a competitor from buying the Dexter plant or another one in Noel, Missouri. Hawley's letter points to allegations made by Grandview Farms in the lawsuit. Hawley stated in the letter that King "misled" Hawley and Rep. Jason Smith, R-Mo., about Tyson's intentions for the Dexter plant.

On social platform X on Sept. 15, 2023, Hawley wrote that King had said "Tyson would help any farmer who wanted to keep raising chickens to do so, including helping them get new contracts with Tyson or other companies. We will hold them to these commitments."

REDACTED COURT DOCUMENTS

Hawley's letter also cites "internal documents" that run counter to the commitments King made to Hawley and Smith. "However, the key details have been redacted from the publicly available court filing." Hawley stated the documents are now subject to a protective order in New Madrid County, Missouri, now blocking their release.

An exhibit filed in the U.S. District Court for Eastern Missouri had multiple redactions to it. Another motion filed by attorneys for Tyson and Cal-Maine also was sealed by the federal magistrate.

"These are serious allegations, and the people of Missouri deserve to know the truth," Hawley stated in his letter to King. "You should immediately make this redacted information public, and additionally provide my office with an unredacted copy of the class action petition and all internal documents it references. I will follow up with you upon receipt."

The redacted court filings state Tyson made assurances in August 2023 that the company would sell the Dexter facility to another meat processor. Instead, Tyson sold the facility to Cal-Maine on Dec. 29, 2023. The lawsuit alleges the sale to Cal-Maine -- and redacted details are "evidence that this transaction was not a product of fair market negotiation, but rather collusion between Tyson and Cal-Maine for the purpose to restrain trade and suppress the market supply of chicken meat."

AG CLAIMS MISSOURI GETTING INVOLVED

On the afternoon of July 12, Missouri Attorney General Bailey posted on X, "The people deserve better than big corporations who engage in anticompetitive behavior at the expense of Missouri jobs and communities. To that end, I am filing a motion to intervene in the antitrust lawsuit against Tyson Foods. I will always fight for Missouri agriculture."

Hawley responded on X, "Great news -- Tyson's deserves to be prosecuted for antitrust and to be sued by farmers for what they did to the people of Missouri."

As of Monday afternoon, Bailey's office has not filed any motion to intervene in the case. Bailey's office did not respond to DTN.

Tyson Foods also did not respond to DTN about the case.

Also see, "City Officials Think Tyson Pork Plant May Reopen in Perry, Iowa," https://www.dtnpf.com/…

Chris Clayton can be reached at Chris.Clayton@dtn.com

Follow him on social platform X @ChrisClaytonDTN


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