A massive chicken merger is underway while the USDA considers a rule that would require chicken processors to provide farmers with more information so they can advocate for themselves in sales negotiations.
A second rule also under review could change the way chicken packers compensate farmers who raise chickens for them.
Two of the country’s largest poultry processing companies, Wayne Farms and Sanderson Farms, will soon become Wayne-Sanderson Farms after the DOJ approved the acquisition of Sanderson Farms by Cargill and Continental Grain Company in late July. Cargill and Continental Grain Company already owned Wayne Farms and had announced plans in August 2021 to acquire Sanderson Farms and begin the merger.
However, the Biden administration is still attempting to put a stop to antitrust violations by “big chicken,” as well as by other big agriculture companies.
Citing an information exchange conspiracy about the wages and benefits of poultry workers as a violation of the 1890 Sherman Antitrust Act that outlaws “conspiracy in restraint of trade,” on July 25 the DOJ filed a lawsuit in the U.S. District Court for the District of Maryland against Cargill, Wayne Farms, and Sanderson Farms.
The lawsuit was filed just days after the Sanderson Farms acquisition was finalized and alleges that the poultry companies used deceptive practices to pit chicken growers against each other via the “poultry tournament system.” This system ranks chicken producers based on the speed or efficiency with which they raise their chickens, and growers who can deliver the most product in the shortest amount of time are paid more by poultry processing companies.
Poultry processing companies like Wayne Farms and Sanderson Farms have achieved what experts call extreme vertical integration, in which they own the entire chicken production process, from raising the animals, slaughtering and packing them, and distributing finished meat to retailers—allegedly to the detriment of workers, not to mention the animals.
“The industry has gotten more integrated over the past 30 years and more consolidated,” said Patti Anderson, senior program officer at the Johns Hopkins Center for a Livable Future. “It’s been sold as a way to increase efficiencies, but if you look at reports from the National Chicken Council, the average income for chicken growers when you account for inflation has gone down over the past 30 years . . . [The poultry industry] will tout the kind of efficiencies that they’ve gained, but growers are not better off for being part of this system.”
If the consent decree in the lawsuit is approved by the U.S. District Court, the companies would be banned from sharing worker information with one another, among several other efforts to keep the companies in check. Currently, the three companies have agreed to pay an $84.8 million settlement written into the DOJ lawsuit that will be paid to workers that have been harmed by the information exchange conspiracy.