A major multi-million dollar settlement, subject to court approval, could have a big impact on Montana.
JBS Foods has agreed to pay $83.5 million to settle allegations that it conspired with other meat packers to bring down cattle prices.
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Lack of competition in the beef industry has concerned ranchers for years.
A settlement with one of the four big meat packers in a lawsuit could potentially change the market.
“There can be nothing more important than for ranchers to have a competitive marketplace, void of any abuse of market power emanating from a highly concentrated meat packing system,” said Bill Bullard, R-CALF USA C.E.O.
It’s long been referred to as a “meat monopoly” with four big meat packers representing 85 percent of U.S. domestic beef production.
But a lawsuit filed six years ago by Billings-based R-CALF, the largest cattle producer-only trade association in the United States, hopes to change that.
“We alleged that they colluded and agreed to reduce slaughter capacity in order to ensure that there wasn't any more capacity than there was in an available cattle supply,” Bullard said. “So that we allege that they were managing supply with demand."
The lawsuit, filed in in 2019, takes aim at JBS, Tyson, Cargill, and National Beef and alleges the “the Big four” as they are known, conspired to fix cattle and retail beef prices from 2015 to 2019.
As part of a settlement, JBS has agreed to pay $83.5 million.
If approved, that money will be put into a fund to compensate thousands of cattlemen nationwide who sold cattle to the big four.
“I would like to have seen more,” said Walter Schweitzer, Montana Farmers Union president. “I think there were more damages than that. But whenever you go to court, you’ve got to take your victories where you can get them.”
Schweitzer is a rancher in Geyser and his Great Falls-based group’s national organization, the National Farmers Union, worked with the four plaintiffs who helped file the class-action lawsuit.
Schweitzer says the monopoly needs to end, with its impacts to anyone who eats meat.
“So if we can have a fair market,, and share with the producers and the consumers, as well as the packers fairly, the consumer will pay less for their beef and pork,” Schweitzer said.
JBS issued a statement.
“JBS maintains the claims asserted in the litigation are frivolous and without merit,” Nikki Richardson, JBS USA head of corporate communications, stated in an email to MTN. “By entering this agreement, JBS admits no wrongdoing for the claims alleged. This decision is in the best interest of the company, and JBS will continue to vigorously defend its interests against the remaining plaintiffs.”
The other three processors have not settled, but the impact could be big, with the potential to affect small meat processors in Montana.
“The potential can definitely vary,” said Kyler Thomson, owner of Top Notch Meats in Billings. “It just depends on if you're able to get the proper way and make sure again following those regulations of making sure that you're doing it the right way.”
Bullard says a generation ago, there were 1,500 meat processors nationwide, and half have been lost.
Schweitzer agrees that it has been tough for that part of the industry.
“If we don't hold the big boys accountable, and force a fair playing field, these small, mid-sized processors won't be able to compete,” Schweitzer said.
“Ultimately you achieve the highest level of national food security when you have a widely dis-aggregated production system, not one that is concentrated and centralized,” Bullard said.
Now they wait for a U.S. District Court judge in Minnesota to make a decision and approve the settlement.
