Mike
Well-known member
ABERDEEN, South Dakota (Reuters) - Roger Koch, a Nebraska cattle producer, testified in federal court on Monday that because of beef price reporting errors in 2001 by the U.S. Agriculture Department he lost $48 a head on cattle he sold at that time.
Koch and two other cattlemen are suing the nation's four largest beef companies claiming they knew of the errors and used that knowledge to depress the prices they paid for cattle.
If the errors had not of occurred, Koch claimed he would have made money on the cattle sale.
The class-action suit being heard in U.S. District Court in South Dakota, filed in July 2002, seeks damages from Tyson Foods Inc., Swift & Co., National Beef Packing Co., and Excel Corp., which is now a unit of Cargill Inc.
Tyson Foods, the nation's largest beef producer, has denied the allegations.
"The plaintiffs are unfairly trying to make the packing industry pay for an unintentional market reporting mistake made by USDA," Tyson said in an e-mail. "Our company has done nothing wrong."
Cargill and Swift declined to comment. National Beef did not respond to a request for a comment.
The case relates to a period from April 2 to May 11, 2001, when calculating errors by USDA caused beef prices in its daily boxed beef reports to be quoted lower than what they should have been. USDA admitted the errors and later published the correct prices.
However, Koch and the other plaintiffs, Herman Schumacher of South Dakota and Michael Callicrate of Kansas, claim the beef companies knew of the price errors before USDA discovered the mistakes.
The trial, which began with jury selection on Friday, is expected to last about two weeks.
Former employees of beef companies, in depositions that were presented on Monday, said that boxed beef prices are only a part of what beef companies use to determine cattle prices. Other elements include what grocery stores will pay for the beef, what producers will take for their cattle, and the prices at the Chicago cattle futures markets.
The National Cattlemen's Beef Association, which is not a party in the suit, in 2001 estimated that the errors cost the nation's cattle producers $42 million to $54 million in lost revenue.
Jim Robb, an economist with the Livestock Marketing Information Center, said the three cattlemen may have a hard time proving their case. The jury will have to be educated on how beef prices are calculated, which Robb says could be complicated.
"You have to prove the next step that it actually did impact cattle prices and buying patterns. That process I think is rather difficult to show," said Robb.
Should the cattlemen win, Robb said the damages will likely be too small to affect quarterly earnings of the beef companies.
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Mt question is............Everyone agrees cattlem lost money.
Who benefitted from the mistakes? Whose pocket did the money go in?
Koch and two other cattlemen are suing the nation's four largest beef companies claiming they knew of the errors and used that knowledge to depress the prices they paid for cattle.
If the errors had not of occurred, Koch claimed he would have made money on the cattle sale.
The class-action suit being heard in U.S. District Court in South Dakota, filed in July 2002, seeks damages from Tyson Foods Inc., Swift & Co., National Beef Packing Co., and Excel Corp., which is now a unit of Cargill Inc.
Tyson Foods, the nation's largest beef producer, has denied the allegations.
"The plaintiffs are unfairly trying to make the packing industry pay for an unintentional market reporting mistake made by USDA," Tyson said in an e-mail. "Our company has done nothing wrong."
Cargill and Swift declined to comment. National Beef did not respond to a request for a comment.
The case relates to a period from April 2 to May 11, 2001, when calculating errors by USDA caused beef prices in its daily boxed beef reports to be quoted lower than what they should have been. USDA admitted the errors and later published the correct prices.
However, Koch and the other plaintiffs, Herman Schumacher of South Dakota and Michael Callicrate of Kansas, claim the beef companies knew of the price errors before USDA discovered the mistakes.
The trial, which began with jury selection on Friday, is expected to last about two weeks.
Former employees of beef companies, in depositions that were presented on Monday, said that boxed beef prices are only a part of what beef companies use to determine cattle prices. Other elements include what grocery stores will pay for the beef, what producers will take for their cattle, and the prices at the Chicago cattle futures markets.
The National Cattlemen's Beef Association, which is not a party in the suit, in 2001 estimated that the errors cost the nation's cattle producers $42 million to $54 million in lost revenue.
Jim Robb, an economist with the Livestock Marketing Information Center, said the three cattlemen may have a hard time proving their case. The jury will have to be educated on how beef prices are calculated, which Robb says could be complicated.
"You have to prove the next step that it actually did impact cattle prices and buying patterns. That process I think is rather difficult to show," said Robb.
Should the cattlemen win, Robb said the damages will likely be too small to affect quarterly earnings of the beef companies.
*****************************************************
Mt question is............Everyone agrees cattlem lost money.
Who benefitted from the mistakes? Whose pocket did the money go in?
