Poultry Growers Upset Over Abuse of Market Power

[Econ101]

Subject: Chicken Growers Upset

Chicken Growers Upset Over Contract with Processing Plant




KNOE-TV
A group of area independent poultry producers has sued an Arcadia
processing company for compensatory and punitive damages for
allegedly ignoring signed contracts with them. The growers say new
company demands amounted to nothing short of a scheme to deplete
their finances while substantially increasing profits for the
company. TV8's Ken Booth reports from Union Parish. The chicken
growers say arbitrary, unreasonable and highly expensive demands
they upgrade their chicken houses was part of a scheme to fatten
their supplier's profits while providing a means by which the
farmers are cut out of the supply chain completely. Seven area
poultry producers have sued Raeford Farms of Louisiana based in
Arcadia along with its North Carolina-based parent corporation,
seeking unspecified damages for fraud, misrepresentation, and unjust
enrichment. The plaintiffs say they were required by Raeford to
financially encumber their property to a sole use leaving them
totally at the mercy of the company which has now notified each of
them, they will receive no more flocks from Raeford. The petition
alleges the end result of Raeford's actions is the designed ability
of the company to wrongfully control its cost of operations while
maintaining undue financial dominance over the plaintiffs...

The lawsuit says the alleged fraud constitutes a willful, wanton,
intentional and malicious disregard for the rights of the plaintiffs
and the public at-large which is dependent upon company's like
Raeford Farms to maintain at least a modicum of basic business
standards and societal morality in their dealings with poultry
growers. Ken Booth, TV8 News, Bernice.

 

[Jason]

The word alleged is used a lot. Must be that the accusations are not proven. Who do we know here that refuses to prove anything?

Could the changes to the chicken barns have anything to do with new requirements for birds to be raised in larger cages and under better environmental standards?

 

[Mike]

The word alleged is used a lot. Must be that the accusations are not proven. Who do we know here that refuses to prove anything?

Could the changes to the chicken barns have anything to do with new requirements for birds to be raised in larger cages and under better environmental standards?

Jason, I know many, many chickens growers in and around my area. Broilers do not live in cages, they walk around on the floor of the house. The changes are mostly watering, cooling, heating and feeding systems that are mandated by the processors who also sell much of the equipment they require.

Chicken processors control the supply of chicken by either delivering or NOT delivering chicks to the contract growers. That is fact. I have seen it too many times. Funny thing is......they always seem to find another sucker down the line who will build a new chickenhouse, only to get screwed sooner or later.

 

[Econ101]

The word alleged is used a lot. Must be that the accusations are not proven. Who do we know here that refuses to prove anything?

Could the changes to the chicken barns have anything to do with new requirements for birds to be raised in larger cages and under better environmental standards?

Jason, I know many, many chickens growers in and around my area. Broilers do not live in cages, they walk around on the floor of the house. The changes are mostly watering, cooling, heating and feeding systems that are mandated by the processors who also sell much of the equipment they require.

Chicken processors control the supply of chicken by either delivering or NOT delivering chicks to the contract growers. That is fact. I have seen it too many times. Funny thing is......they always seem to find another sucker down the line who will build a new chickenhouse, only to get screwed sooner or later.

Mike, what makes it even worse is that the agribusiness lobby in D.C. got the Farm Service Agency (FSA) to finance chicken barns. Banks were burned by the poultry companies and their tricks so they wouldn't finance them any more. Poultry companies wanted more farmers to grow birds for them that did not know the little industry tricks so they got the FSA to be a part of the fraud that the finance market would not accept.

FSA does not have the financial risk that could put a bank or other financial institution under so they keep making the loans as a part of USDA policy. Taxpayers have the risk. Talk about the Broiler Council knowing the "next" move to make when they **** on thier own producers!!!

 

[Mike]

I did not know the FSA was in cahoots with the processors on the scheme. I guess it's all part of our governments "Cheap Food Policy".

I was talking to a grower who also runs cattle at our bull sale in November. He and some other growers went to a large processor about helping them with the high costs of propane gas this winter. The processor set up a meeting with the growers and agreed to "Book" a certain amount of LP gas at a reasonable cost to the growers. Come to find out, the cost of the gas was wthout delivery..........and the cost to get that gas delivered is more than they can get it for locally. Screwed again.

You would think that processors would take delight in helping the growers.
:???:

 

[Sandhusker]

Jason, "The word alleged is used a lot. Must be that the accusations are not proven."

"Alleged" is the word used before court. The story is clear they haven't been there yet. You felt the need to point out the ovbious?

Jason, "Who do we know here that refuses to prove anything?"

Your compadre, SH.

 

[Econ101]

The word alleged is used a lot. Must be that the accusations are not proven. Who do we know here that refuses to prove anything?

Could the changes to the chicken barns have anything to do with new requirements for birds to be raised in larger cages and under better environmental standards?

No, it has to do with the exercise of market power and getting new supply off of the backs of old farmers.

 

[mrj]

If all those chicken growers are so badly abused, why don't they go out on their own, or form a group cooperative and process and sell the poultry themselves?

In SD at least one Hutterite (I believe) colony is selling their chickens direct to consumers by asking individuals in the communities to solicit orders, then they bring the frozen chickens, packed in cartons of 8 birds, to a given site for distribution to the consumers.

The quality of these birds is vastly superior to anything one can buy in stores. I have no idea what standards they must follow for safety in processing, but the whole birds seem very clean, have little water absorbed, and run about 4 pounds or more and sell for around $5.00 or a little less per bird. If this can be done profitably in extremely rural and sparsely populated SD, it seems it should work in most places.

My point is, if growers are being abused, there seems to be real opportunity for either organically grown, or "humanely" or "naturally" grown chicken sales.

MRJ

 

[Anonymous]

If all those chicken growers are so badly abused, why don't they go out on their own, or form a group cooperative and process and sell the poultry themselves?

In SD at least one Hutterite (I believe) colony is selling their chickens direct to consumers by asking individuals in the communities to solicit orders, then they bring the frozen chickens, packed in cartons of 8 birds, to a given site for distribution to the consumers.

The quality of these birds is vastly superior to anything one can buy in stores. I have no idea what standards they must follow for safety in processing, but the whole birds seem very clean, have little water absorbed, and run about 4 pounds or more and sell for around $5.00 or a little less per bird. If this can be done profitably in extremely rural and sparsely populated SD, it seems it should work in most places.

My point is, if growers are being abused, there seems to be real opportunity for either organically grown, or "humanely" or "naturally" grown chicken sales.

MRJ

MRJ- Unless your Hutterites are using a state and/or federally inspected and licensed slaughter plant they probably are doing it illegally....

Hutterites have been doing it around here for years- but then the retailers complained, and the health and regulatory authorities were forced to step in- now instead of selling out of the freezer trucks they are selling out of the trunks of their cars in the back alleys........

The retailers and Packers seem to enjoy state and federal regulation when it is to their benefit!!!!!!

 

[Econ101]

If all those chicken growers are so badly abused, why don't they go out on their own, or form a group cooperative and process and sell the poultry themselves?

In SD at least one Hutterite (I believe) colony is selling their chickens direct to consumers by asking individuals in the communities to solicit orders, then they bring the frozen chickens, packed in cartons of 8 birds, to a given site for distribution to the consumers.

The quality of these birds is vastly superior to anything one can buy in stores. I have no idea what standards they must follow for safety in processing, but the whole birds seem very clean, have little water absorbed, and run about 4 pounds or more and sell for around $5.00 or a little less per bird. If this can be done profitably in extremely rural and sparsely populated SD, it seems it should work in most places.

My point is, if growers are being abused, there seems to be real opportunity for either organically grown, or "humanely" or "naturally" grown chicken sales.

MRJ

MRJ, why are you the kind of person who blames the victims? These farmers are being abused by market power. What would you do if all the buyers of your product told you that you had to upgrade your farm for them when it provided no benefit to you? Most of the time they are the only buyer and they make the farmers make uprades for them with no additional compensation. If they don't do it, they make the value of their farm go to zero.

To put it in perspective, how would you like your electric company telling you to put new poles on your place with your own money and run the line down to your neighbor so they don't have to pay for it themselves? If you don't do it, then you don't get to be on the electrical grid. MRJ, you could set up your own generator. How would you like that? Make it a little more real life by saying that if you don't do it, you don't get to sell your farm when you get ready to retire or just move off of it.

It is pretty easy for you to sit on your throne and come up with the things you do when you are not the one being abused by market power.

 

[mrj]

Guys, isn't it recognized that ignorance ( "ignorance" meaning, in this case, not knowing about it) of the law is no excuse for breaking it?

Why is it unreasonable to expect that a farmer entering into a contract would hire his own lawer to study that contract and assure that it is fair and within the capabilities of his client, the farmer?

Econ, there you go again! Accusing me of having a "throne" (apparently denoting obscene wealth, as you use the word). This, in my opinion, is another example of you "calling names" while you claim innocence.

There is possibly a victim mentality at work in these situations. It seems apparent that liberals in government manage to create "victims" they need to "help" (entitlement programs that do little or nothing to train or educate people to move up and out of the "system" and live by their own efforts. Why do chicken growers have this mindset? Why do they not get out of such a system? Why are there some growers who are successful and not complaining? Your scenarios for improvement seem to me to "need" you or your "party" or "organization" or "whatever" to save these people from their "oppressors". What I wonder is why can't they do that themselves. Needing someone to "save" us from our business or lifestyle decisions through political action does not seem like the "American way".

MRJ

 

[Econ101]

Guys, isn't it recognized that ignorance ( "ignorance" meaning, in this case, not knowing about it) of the law is no excuse for breaking it?

Why is it unreasonable to expect that a farmer entering into a contract would hire his own lawer to study that contract and assure that it is fair and within the capabilities of his client, the farmer?

Econ, there you go again! Accusing me of having a "throne" (apparently denoting obscene wealth, as you use the word). This, in my opinion, is another example of you "calling names" while you claim innocence.

There is possibly a victim mentality at work in these situations. It seems apparent that liberals in government manage to create "victims" they need to "help" (entitlement programs that do little or nothing to train or educate people to move up and out of the "system" and live by their own efforts. Why do chicken growers have this mindset? Why do they not get out of such a system? Why are there some growers who are successful and not complaining? Your scenarios for improvement seem to me to "need" you or your "party" or "organization" or "whatever" to save these people from their "oppressors". What I wonder is why can't they do that themselves. Needing someone to "save" us from our business or lifestyle decisions through political action does not seem like the "American way".

MRJ

MRJ, it has been the pattern in almost every larger poultry company that the contracts farmers must sign in order to get a new flock the next year are given to them the day they pick up their last paycheck of the year. They have to sign it at the company, usually behind a gated and guarded yard. They don't have access to the contract before that date and they have the expertise to read those contracts. There was a big push in Georgia for the poultry growers to have at least three days to read the contract. The integrators fought it tooth and nail.

The fact remains that the poultry integrators have all of the market power in the poultry business. They break up any resistence or organizations of growers by giving the "trouble maker" growers bad, diseased, genetically inferior birds or mess with their feed. Go read the London Case, which is what the 11th circuit based its Pickett decision on. London was given diseased birds so that he would do bad in the ranking system and the integrator could cut him off. This was all in response to the farmer testifying against the integrator in a race discrimination case. The farmer was only telling the truth. Talk about after the fact witness tampering that has had a chilling effect in the poultry industy!!! The whole 11th circuit set of judges should be required to buy and operate a poultry farm. They have lost touch with average americans and want to substitute their jugdement for jury judgements.

Slavery still exists in the South and the 11th circuit has approved it.