The analytics company Agri Stats has violated antitrust law for years by sharing information with chicken, pork, and turkey processors about their competitors’ costs, output, and prices, said the Justice Department in a lawsuit filed on Thursday. Processors used the reports to restrain production and raise prices to consumers, said the lawsuit, filed in federal court in Minneapolis.
“Agri Stats does not advise its customers to compete more vigorously against each other or to take sales from one another; rather, it enables and encourages processors to raise total industry profits,” said the lawsuit. Three dozen processors, including such industry leaders as Perdue, Tyson Foods, Pilgrim’s Pride, Hormel, Smithfield, and Cargill, were listed as co-conspirators but were not charged.
On its website, Agri Stats says, “We utilize customized reports and graphs to identify for each customer exactly how every level of their operation performed in a given period, and how they compared to similar organizations in the industry.” The company, based in Fort Wayne, Indiana, did not respond immediately to a request for comment on the federal lawsuit.
“The Justice Department is committed to addressing anti-competitive information exchanges that result in consumers paying more for chicken, pork, and turkey,” said Assistant Attorney General Jonathan Kanter.
Operating on a “give to get” policy, Agri Stats requires its clients to share complete data for each of their facilities and does not make the material available to outsiders, such as grocery stores and restaurants, said the Justice Department. “The information that Agri Stats collects and distributes is available nowhere else, and processors have regularly used this information to inflate prices and restrict output.” The reports are “loosely anonymized” so processors can see what their competitors are doing and set their own production and prices into the future, it said.
The anti-monopoly group Farm Action said the largest processors benefited from the Agri Stats reports. “This only serves to drive up corporate profits, crush competition, lower prices paid to producers, and keep prices high for consumers,” it said on social media. Said the National Farmers Union, “If you collude with monopolies to gouge farmers and consumers, it’s only fair that the Department of Justice make you face the consequences.”
Agri Stats halted its pork and turkey reporting in 2019 due to private antitrust litigation. Executives said they want to resume the reports when the lawsuit is concluded.
Share prices for Tyson Foods, Hormel Foods, and Conagra Brands fell on Thursday, while Pilgrim’s Pride stock rose marginally, reported Market Watch.