Lawsuit alleges turkey companies conspired to keep prices high

A new class-action lawsuit brought by two food distributors alleges that the country’s top turkey companies conspired for most of the past decade to raise turkey prices. The allegations mirror those brought in recent years against beef, pork, and chicken companies, and all revolve around the use of reports on industry production and pricing made by a secretive data company called Agri Stats.

This latest complaint, filed Wednesday in U.S. District Court in the Northern District of Illinois, alleges that between 2010 and 2017, the country’s largest turkey companies conspired to artificially raise turkey prices by coordinating production cuts. As a result, turkey prices reached an “unprecedented level.”

The suit was brought by Olean Wholesale Grocery Cooperative and John Gross and Company, two food distributors and wholesalers based in New York and Pennsylvania, respectively, who bought turkey from the defendants during the time period covered by the suit.

The defendants in the case control approximately 80 percent of the market for turkeys, and the top four — Cargill, Hormel, Butterball, and Farbest — control more than half the market, according to the complaint. Other defendants include Agri Stats, Foster Farms, Kraft Heinz, Hormel Foods, and Tyson Foods.

According to the complaint, the companies coordinated to raise prices at industry conventions, through public discussion of production cuts, and by analyzing competitor data contained in Agri Stats reports. Those reports, which are available only on a subscription basis to industry insiders, can contain proprietary information about sales, production levels and capacity, and wages paid to farmers.

“These reports, unavailable to anybody besides Agri Stats subscribers, allowed the integrator defendants to easily identify potential opportunities where their prices for turkey products were significantly lower than their competitors,” the complaint says, thus making it possible for companies to coordinate those prices.

Though Agri Stats reports are meant to be anonymous, a confidential witness in the case who is a former accountant at the Ohio meat company Cooper Farms, says in the complaint that, “[Y]ou could usually figure out who was who.” Another confidential witness, a former sales executive at Butterball, says in the complaint that Agri Stats identified which companies participated in each report, making it easier to decode.

According to USDA data cited in the complaint, “the average wholesale price per pound for turkey hens was between $0.55 and $0.85 every year from 2000 to 2009, before steadily increasing to $1.15 by 2016.” During that time, the number of turkey slaughtered nationally also declined, according to data from the National Agricultural Statistics Service.

A Cargill spokesperson said “the claims lack merit and [we] are confident in our efforts to maintain market integrity and conduct ethical business.” Agri Stats and several other defendants in the case did not respond to requests for comment before this article was published.

Turkey processors aren’t the only poultry companies allegedly running afoul of the law. The broiler chicken industry is under investigation by the Department of Justice for alleged antitrust violations. The DOJ investigation follows several lawsuits brought by food retailers, wholesalers, restaurants, and consumers alleging that the companies conspired to keep chicken prices artificially high, in part aided by Agri Stats’ reports.

An investigation by FERN and The Guardian, published in August, examined farmers’ allegations that chicken companies have also used Agri Stats’ reports to suppress wages by sharing information about how much farmers are paid.

The plaintiffs in the turkey suit are seeking damages in excess of $5 million, and a jury trial.

This article has been updated to include a comment from Cargill.