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Federal Judge Takes Pilgrim’s Pride To The Woodshed For Manipulating Chicken Prices

Posted  October 24, 2011

A federal judge in the Eastern District of Texas has slapped Pilgrim’s Pride Corp., the largest poultry producer in the U.S., with a $26 million damage award for manipulating the price of chicken.

According to Magistrate Judge Charles Everingham IV, Pilgrim’s Pride violated the Packers and Stockyards Act of 1921 by shutting down a packing plant in El Dorado, Arkansas and refusing to sell the operations to its competitors with the intent to artificially raise prices.

The decision to idle the plant in 2009 followed Pilgrim’s Pride’s filing for bankruptcy during a time of rising feed costs and a market decline.  Pilgrim’s Pride later emerged from bankruptcy after being taken over by the Brazilian meatpacking company JBS Swift.

Judge Everingham cited an email from the company’s chief restructuring officer, William Snyder, in which he wrote that Pilgrim’s Pride intended “to restrict the chicken in the area and allow the prices to rise.”

Pilgrim’s Pride CEO, Bill Lovette, said the company will appeal the ruling.

The case was brought on behalf of approximately 90 chicken farmers in Arkansas who were injured when Pilgrim’s Pride shut down the plant and refused to buy chickens from them.  According to Peter Carstensen, an antitrust law professor at the University of Wisconsin, the ruling may open up a new avenue for farmers to sue processors in the beef and pork markets as well.

Tagged in: Antitrust Litigation,