Pilgrim's Pride Sued by Farmer Over Chicken-Raising Practice

(Bloomberg) -- A contract farmer for Pilgrim’s Pride Corp. is blowing the whistle on what he says is the poultry company’s repeated violations of federal law covering the raising of birds.

Eric Hedrick, a West Virginia-based chicken producer, sued Pilgrim’s Pride, a unit of Brazil’s scandal-plagued JBS SA, alleging the company retaliated by sending him diseased chicks and moldy feed when he objected to some of its practices.

Pilgrim’s Pride “falsely represents’’ that contract farmers are “independent growers’’ while the company micromanages all aspects of the operation and punishes those who object to their heavy-handedness, Hedrick said in the Oct. 25 lawsuit filed in West Virginia.

The suit is the latest to target alleged misdeeds in the poultry industry. In May, a grocery supplier accused companies including Tyson Foods Inc., Perdue Farms Inc., Sanderson Farms Inc. and Pilgrim’s Pride of price-fixing, leading to losses for Associated Wholesale Grocers Inc. of $300 million. Another 12 companies filed a similar complaint on the same day, May 16, in federal court in Chicago.

“Pilgrim’s strongly denies the allegations and looks forward to defending our interests,” Cameron Bruett, a company spokesman, said in an email.

The owner of the Triple R Ranch also accuses Pilgrim’s Pride executives of misleading growers about the profit potential of raising chickens. Instead of making what Pilgrim’s Pride estimated would be $700,000 of annual profit over 10 years, Hedrick said the company’s equipment and other demands left him $1,541 in the hole.

Triple R Ranch

The Triple R Ranch owner said Pilgrim’s Pride violated the Agricultural Fair Practices Act, which protects farmers from retaliation by those who buy their products because of membership in a cooperative. Hedrick in 2008 joined the Contract Poultry Growers Association of the Virginias (CPGAVA) and soon became a director. In December 2010, he spoke at a government hearing to discuss abuses in the industry.

After Hedrick’s participation in CPGAVA and his appearance at the government hearing, he said in the complaint, Pilgrim’s Pride retaliated by supplying substandard food for the chicks, resulting in financial loss. Pilgrim’s Pride intentionally delivered "a lot of feed containing corn with mold," Hedrick said. The company, according to the complaint, also "failed to provide needed medication for the chicks" and delayed weighing the birds, leading to "reduced live weight."

For a contract farmer to sue the company it grows chickens for under the Packers and Stockyards Act, as has been tried in the past, he or she has to overcome a high hurdle. To allege anti-competitive behavior, the plaintiff must show that the integrator not only harmed individuals, but the entire industry. Obama-era rules known as the Farmer Fair Practice Rules would have changed that, but the Trump administration shelved them before they went into effect.

More on other lawsuits here

This isn’t the first time a chicken farmer has gone after the industry. In 2014, Craig Watts invited the animal welfare group Compassion in World Farming to document the conditions, largely dictated by terms of his contract with Perdue, under which he was raising about 700,000 chickens each year. Perdue later said Watts "deliberately withheld appropriate care from chickens he was raising for Perdue to allow the activist group to film them and cooperated in the production of a skewed and misleading video."

Five chicken farmers also sued Tyson, Pilgrim’s Pride, Sanderson, Perdue and Koch Foods Inc., in 2017 saying the companies conspired to tamp down compensation for those who raise so-called broiler chickens, which make up most of the U.S. domestic market.

The case is Triple R Ranch LLC v. Pilgrim’s Pride, 18-cv-109, U.S. District Court, Northern District of West Virginia (Elkins).

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