The federal government is investigating how poultry processing companies pay the farmers who raise the birds they process.
Pilgrim’s Pride Corp. said in a regulatory filing Oct. 27 that it has learned the U.S. Justice Department has opened a probe into its relations with poultry raisers, including contracts and payment formats. The Wall Street Journal reports that other poultry processors are undergoing similar investigations.
Major poultry companies usually own both the birds that they contract out to growers to raise, and the feed they eat. Farmers often are subjected to a much-reviled “tournament system” in which they compete with other chicken farmers in a region and are supposedly compensated according to their productivity.
The probe of Pilgrim’s Pride and the other companies is part of the Biden administration’s ongoing scrutiny of how farmers are treated. In May, the USDA unveiled proposed new rules that would require processing companies to disclose information about compensation to the farmers it contracts with. In July, the Justice Department made the newly formed Wayne-Sanderson Farms agree to stop using the tournament system as a condition of settling an antitrust lawsuit.