Feds Eye Processor-Grower Chicken Contracts

Oct. 28, 2022
‘Tournament system’ that pits growers against each other will receive special scrutiny.

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.

About the Author

Pan Demetrakakes | Senior Editor

Pan has written about the food and beverage industry for more than 25 years. His areas of coverage have included formulations, processing, packaging, marketing and retailing. Pan worked for Food Processing Magazine for six years in the 1990s, where he was operations editor (his current role), touring dozens of food plants of every description. He has also worked for Packaging and Food & Beverage Packaging magazines, the latter as chief editor, during which he won three ASBPE awards. He is a graduate of Stanford University with a BA in communications.

Sponsored Recommendations

Learn About: Micro Motion™ 4700 Config I/O Coriolis Transmitter

An Advanced Transmitter that Expands Connectivity

Micro Motion™ G-Series Coriolis Flow and Density Meter

Micro Motion G-Series: market-leading compact design featuring advanced process diagnostic capability.

Embracing Sustainability using Advanced Measurement Instrumentation

A practical guide to greeningyour brewing operationsusing advanced measurementinstrumentation.

Get Hands-On Training in Emerson's Interactive Plant Environment

Enhance the training experience and increase retention by training hands-on in Emerson's Interactive Plant Environment. Build skills here so you have them where and when it matters...