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USDA vs Excel

Mike

Well-known member
USDA CHARGES EXCEL CORPORATION VIOLATED PACKERS AND STOCKYARDS ACT

WASHINGTON, DC, April 9, 1999-- Agriculture Secretary Dan Glickman
announced
today that USDA has filed a complaint against Excel Corporation alleging
that the company
underpaid more than 1250 farmers by about $1.8 million in violation of the
Packers and
Stockyards Act.

"To remain competitive and to survive, America's small- and
medium-size producers
need a level playing field," said Glickman. "Today's action demonstrates
how seriously we at
USDA take our responsibility for ensuring that level playing field. We
simply will not tolerate
unfair and deceptive trade practices."

The complaint, brought by USDA's Grain Inspection, Packers and Stockyards
Administration, alleges that Excel failed to notify hog producers that it
changed the method of
calculating lean percent of hogs. Excel uses lean percent to compute the
purchase price it pays
farmers for hogs that it buys on a carcass merit basis.

According to the complaint, as a result of the undisclosed formula
change, Excel paid
lower prices for more than 19,900 lots of hogs that it purchased on a
carcass merit basis. The
complaint stems from a routine compliance investigation into Excel's hog
purchases during late
1997 and early 1998. That investigation revealed violations of the Packers
and Stockyards Act, a
fair trade practice and payment protection law.

The complaint was filed with the office of USDA's hearing clerk.
Excel, a subsidiary of
Cargill, Inc., will have an opportunity to respond to the complaint and
request an oral hearing.

Glickman said USDA has become increasingly concerned about ensuring
the integrity
and competitiveness of livestock markets -- and the need to protect smaller
producers from unfair
trade practices. He has restructured GIPSA's Packers and Stockyards
Program, strengthening its
economic and legal expertise to enhance USDA's ability to monitor and
investigate livestock
transactions.

GIPSA runs a toll-free hotline for complaints about unfair trade
practices and possible
violations of the Packers and Stockyards Act. The hotline number is
1-800-998-3447.


USDA'S COMPLAINT AGAINST EXCEL CORPORATION
Release No.0154.99

Backgrounder

USDA'S COMPLAINT AGAINST EXCEL CORPORATION
April 9, 1999


The announcement today that USDA's Grain Inspection, Packers and
Stockyards Administration has filed a complaint against Excel Corporation
completes a 12-month investigation. The complaint alleges that Excel violated
Section 202 of the Packers and Stockyards Act which prohibits, unfair and
deceptive practices by packers. It is alleged that Excel failed to disclose
to producers a change in the calculation of lean percent for hogs purchased on
a carcass merit basis. The complaint further alleges that, as a result of
this change in formula, Excel paid lower prices for the majority of hogs
purchased on a carcass merit basis. The alleged actions by Excel resulted in
farmers being paid $1.8 million less in transactions involving more than
19,900 lots of hogs that were slaughtered at each of Excel's three hog
plants.

The complaint alleges that on or about October 23, 1997,
Excel, without notification to its carcass merit sellers,
replaced the manufacturer's formula in its grading
instrument with a new formula at its Beardstown, Illinois
plant. This formula change resulted in lower prices being
paid for approximately 12,506 lots of hogs purchased by the
Beardstown plant between October 23, 1997 and June 1, 1998.
The dollar value of this change to Excel was approximately
$1,043,000.

The complaint alleges that on or about October 29, 1997,
Excel, without notification to its carcass merit sellers,
replaced the manufacturer's formula in its grading
instrument with a new formula at its Ottumwa, Iowa plant.
This formula change resulted in lower prices being paid for
approximately 7,104 lots of hogs purchased by the Ottumwa
plant between October 29, 1997 and June 1, 1998. The dollar
value of this change to Excel was approximately $780,000.

The complaint alleges that on or about April 23, 1998,
Excel, without notification to its carcass merit sellers,
except Tyson Foods, Inc., replaced the manufacturer's
formula in its grading instrument with a new formula at its
Marshall, Missouri plant. This formula change resulted in
lower prices being paid for approximately 332 lots of hogs
purchased by the Marshall plant between April 23, 1998 and
June 1, 1998. The dollar value of this change to Excel was
approximately $16,000.


This complaint resulted from discrepancies uncovered by
GIPSA investigators in the course of a routine compliance
investigation to ensure accuracy in the use of grading
devices used to measure percent lean.
 
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