Miller reaches agreement with Tyson Foods

By Ashley Stinnett | Sep 15, 2009


DES MOINES, Iowa (Legal Newsline) - The State of Iowa and Tyson Foods, Inc., have reached an agreement ensuring the poultry company can continue operations in the state, according to Iowa Attorney General Tom Miller.

U.S. District Court Judge Robert Pratt approved a consent decree on Friday that will end all legal disputes between the two entities.

"This agreement enables Tyson to pursue its stated plans to maintain its business operations in Iowa," Miller said, "and it protects the rights and interests of Tyson's contract producers."

The settlement clears up a lawsuit filed by Tyson earlier this month over allegations Iowa state code violates the U.S. Constitution.

Iowa Code Chapter 202B prohibits a "processor" from either "directly or indirectly" engaging in certain activities including, but not limited to, owning, operating, financing or controlling a swine operation within the State of Iowa or contracting Iowa producers for the care and feeding of swine in Iowa.

"Our company has historically depended on independent pork operations of all sizes to supply us with a large majority of the high quality hogs we process," said Jim Lochner, Tyson's vice president of Fresh Meats.

"We want to continue to rely on independent producers and do not intend to become a vertically integrated processor.

"We believe this agreement will provide greater flexibility in our marketing relationships with pork producers, helping ensure the producers have a competitive outlet for their livestock and we have a steady supply of hogs to run our plants. This is especially important in today's economic environment."

Under the terms of the settlement, Tyson must refrain from coercing contract producers, requiring producers to make additional capital investments unless producer is compensated, requiring producers to use binding arbitration to resolve disputes and must not finish hogs in company-owned facilities until Sept. 16, 2010.

"The agreement also has strong protections that will allow Tyson producers to organize and use bargaining associations. This will increase the economic bargaining power of Iowa contract producers and give them the opportunity to negotiate for their fair share of the returns in swine production," Miller said.

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