Chicken Farmers’ Antitrust Suit Clears Hurdle, Plus New Data on Agribusiness Lobbying Might
United States District Court for the Eastern District of Oklahoma, photo courtesy of iStock.
Poultry Growers Receive Class Certification
After more than seven years of litigation, contract poultry growers just got one step closer to justice last week. A federal judge granted farmers’ motion for class certification in an antitrust suit that alleges chicken companies conspired together to suppress their pay. This represents a major step forward for the poultry growers’ case and a broader triumph for efforts to challenge corporate wage-fixing.
A group of poultry farmers allege that 21 companies representing 98% of U.S. chicken production colluded together to hold down their wages by sharing detailed information about farmer pay and agreeing not to poach or recruit growers from one another. This alleged conspiracy made it harder for growers to switch between chicken companies to obtain higher pay or better contract terms. It also allegedly allowed companies to monitor their competitors’ compensation and ensure a consistent, lower pay rate across the industry. The third-party information-sharing service in question, Agri Stats, has been embroiled in several private and federal antitrust suits.
Class action lawsuits allow a large group of plaintiffs, in this case contract poultry farmers, to sue companies for a similar injury. Before the case can go to trial, it must go through a mini pre-trial called class certification, which both determines who can be included in the larger group of plaintiffs and preliminarily assesses their allegations and evidence. Courts have raised the bar for class certification in antitrust cases, but once surpassed, defendants tend to settle. As one law firm put it, class certification is “often seen as the end of the road for defendants,” though defendants still have a chance to appeal.
In this case, Pilgrim’s Pride petitioned to deny farmers’ class certification and exclude testimony from one expert witness, economist Hal Singer. Singer’s two economic models showed how the alleged no-poach agreement and information-sharing scheme lowered prices paid to farmers. His analysis also argued that all or nearly all chicken growers in the class suffered lower pay because of the alleged conspiracy. Pilgrim’s and their expert witnesses argued that the plaintiffs could not actually prove this.
The judge didn’t weigh in on whether chicken companies violated antitrust law, but they did find that chicken growers and their representatives presented enough comprehensive information to claim a potential impact across their full class.
The plaintiffs presented e-mails between chicken company staff in which they talked about “a gentlemen’s agreement” to “not recruit broiler producers” from a competitor, as well as their efforts to “stay out of each others [sic] area” for recruiting growers. Executives also testified to setting or adjusting grower pay based on the Agri Stats national benchmark. Singer’s economic analysis looked at wage data from packers that did not subscribe to Agri Stats to show how these companies tended to pay farmers more. He also compared poultry growers’ wages during the period of the alleged conspiracy to the “War on the Shore,” a brief period between 2013 and 2015 on the Delmarva peninsula when chicken companies appeared to cheat on their no-poach agreement to recruit each other’s growers. During this time, the rate of growers switching between chicken companies more than doubled, and pay went up.
Very few labor antitrust cases have received class certification. This success could inspire more plaintiffs’ lawyers to look for other corporate conspiracies to suppress wages.
Big Ag’s Million Dollar Lobbying Might
After months of delays, the House and Senate agriculture committees are finally getting concrete about the next Farm Bill. A new study reveals that agribusiness corporations and their trade associations have invested hundreds of millions of dollars to influence this landmark legislation.
The last Farm Bill technically expired in September and congressional leaders have missed multiple deadlines to produce new proposals. Two weeks ago, the House and Senate agriculture committees put out an overview of their respective farm bill priorities, and the House has scheduled the first Farm Bill markup for next week on May 23.
While the Republican-controlled House and Democrat-controlled Senate have different visions for some key issues, such as federal food assistance and investments in “climate-smart” farming, both parties largely agree on maintaining the agricultural policy status quo. That is, generous crop subsidies and insurance supports that benefit the largest farmers with little to no strings attached to protect the environment.
Dominant agribusiness interests have spent big to keep things this way. A new analysis by the Union of Concerned Scientists (UCS) found that food and farming interest groups spent half a billion dollars on lobbying in the run-up to this Farm Bill, specifically, $523 million between 2019 and 2023. The largest spenders were corporate interests.
UCS tallied this figure by pulling every lobbying disclosure report that listed the “farm bill” as a lobbying issue over the last five years. This total represents the disclosed labor value of registered lobbyists for corporations, trade associations, nonprofits, and other interest groups. UCS found that a wide range of interest groups paid lobbyists to weigh in on the latest farm bill, from universities and state governments to trade associations and environmental advocates.
More than half of this lobbying spending, $286 million, came from agribusiness and trade groups. Together, these entities spent over four times more on lobbying than all nonprofit and advocacy groups, only a subset of which represent farmers or the public interest. Other big spenders included pharmaceutical companies, fuel companies, and universities.
UCS only counted lobbying that mentioned the farm bill, which misses lobbying spending on general farm policy issues, the authors note. Further, lobbying spending only represents the tip of the iceberg for corporate influence over policymaking. “Looking at the money is a great way to start talking about the problem of industry influence, but it’s everywhere,” says Rebecca Wolf, senior food policy analyst for Food & Water Watch. “From positioning industry’s lobby as an expert at a hearing or helping write legislation, there are many ways that industry leads through our elected officials.”
What We’re Reading
Instacart and Uber started a partnership that allows users to order Uber Eats restaurant delivery through the Instacart app. Even though Uber runs a competing grocery delivery business, it’s desperate to boost delivery traffic. (The Verge)
A coalition of UFCW locals and the American Economic Liberties Project wrote a letter to the Justice Department urging antitrust enforcers to open a criminal investigation into Kroger and Albertson’s no-poach agreements. (Bloomberg Law)
Tyson unexpectedly closed a processing plant in Northwest Arkansas, leaving contract growers with millions in debt and no revenue. (Investigate Midwest)