Tyson, Meat-Company Pricing Power Target of New Rules

Tyson Foods Inc., Smithfield Foods Inc. and other large meatpackers would be barred from buying animals from each other and limits would be set on their exclusive contracts with large livestock suppliers under a rule proposed by the government to address antitrust concerns. Industry consolidation and increasing packer ownership of livestock have lowered the prices smaller farmers receive for their cattle, hogs and poultry, U.S. Agriculture Secretary Tom Vilsack said today. Exclusive contracts among larger producers and meatpackers keep small farmers in the dark about pricing, limiting their negotiating power, he said. Under the USDA proposal, meatpackers would be barred from signing higher-paying contracts with large producers than farmer groups that can provide the same quantity and quality of livestock, “without providing legitimate justification for the disparity,” according to an outline of the rule on the USDA’s website. Packers also would be prohibited from sharing prices with competitors and receiving livestock from each other. Sample contracts also would be made available on a USDA website, in a move to improve transparency, the department said...more