Mega-merger of poultry processors is proceeding, despite anti-trust concerns; processors ask producers to back it

A mega-merger between two of the country’s largest poultry processing companies is proceeding even as the Biden administration attempts to clamp down on antitrust violations by big agriculture companies, including 'Big Chicken'," Claire Carlson reports for The Daily Yonder. "Wayne Farms and Sanderson Farms will soon become Wayne-Sanderson Farms after the Department of Justice greenlit the acquisition of Sanderson Farms by Cargill and Continental Grain Co. in late July. Cargill and Continental already owned Wayne and a year ago announced plans to buy Sanderson.

Days after the acquisition was finalized, the Justice Department filed suit against Cargill, Sanderson and Wayne, saying the companies illegally exchanged information about poultry workers' wages in violation of federal anti-trust laws. "The lawsuit also alleges that the poultry companies pitted chicken growers against each other through deceptive practices via the poultry tournament system, which ranks chicken producers based on the speed or efficiency with which they raise chickens," Carlson reports. "Growers who can deliver more product in a shorter amount of time are paid more by poultry processing companies." The tournament system has enabled huge processors to control the entire production process, and consolidation has concentrated power in the industry to a handful of players.

Though the companies agreed to pay an $84.8 million settlement, Diana Moss, president of the American Antitrust Institute, told Carlson she worries that the lawsuit isn't enough to keep the new company from having too much control over the poultry industry. 

The Department of Agriculture "is considering a rule that would require chicken processors to provide farmers with more information so growers can advocate for themselves in sales negotiations," Carlson reports. "A second rule under review could change the way chicken packers compensate farmers who raise chickens for them. Comments on those proposed rules are due Aug. 23 and Sept. 6, respectively."

Labor advocates, former growers, and the USDA are accusing some of the nation's largest poultry processors of pressuring farmers to oppose the proposed rule. "Growers contracted to raise chickens are increasingly weighing in against that rule through form letters," Marcia Brown reports for Politico. "Some poultry processors have acknowledged sharing the pre-written letters with farmers, urging them to submit them through the public comment process or asking them to weigh in individually. In an industry already under scrutiny for wage fixing and other practices, that’s raised concerns among advocates and USDA."

Agriculture Secretary Tom Vilsack warned against pressuring farmers when the USDA announced an extension of the public comment period earlier this month. "There is fear throughout the meat and poultry industry as we saw earlier this year at two separate Congressional hearings where witnesses did not testify due to concerns of retaliation," Vilsack said in a press release. "But it is still critical that we hear the full story, so we are highlighting the option for comments to be provided anonymously."