WASHINGTON – The antitrust division of the US Department of Justice (DOJ) approved on May 15 a plan developed by the National Pork Producers Council (NPPC) for the orderly euthanasia of what the organization called an “overwhelming oversupply of live hogs in the United States.”
“Today’s letter addresses some of the challenges created for farmers when packing capacity shuts down,” said Assistant Attorney General Makan Delrahim. “Meanwhile, we remain committed to vigorous enforcement of the antitrust laws to ensure that farmers and consumers see the benefits of competition.”
The letter was in response to a request from NPPC to review the plan to ensure compliance with US antitrust laws. Capacity restrictions at pork packing plants have necessitated the euthanasia of approximately 700,000 head per week, NPPC said.
“To the extent NPPC communicates with its members to help USDA, APHIS’s NICC, and other agencies, under their direction and supervision, the Department is satisfied that this conduct should not raise concerns under the antitrust laws,” DOJ said. Likewise, NPPC sharing information about euthanization methods, protocols, equipment, or processors with its members – even if not at the direction of USDA or another governmental entity – is unlikely to raise concerns under the antitrust laws.
“By contrast, the Department would have concerns if industry participants shared competitively sensitive information or otherwise engaged in coordination that facilitated price fixing, output restrictions, market allocation, anticompetitive exchanges of information, or other anticompetitive conduct,” DOJ continued. “While your request does not address the communication of competitively sensitive information, we note that further guidance is available in the Antitrust Guidelines for Collaborations Among Competitors issued jointly by the Antitrust Division and the Federal Trade Commission.”
Under the proposed plan, NPPC will work with US Department of Agriculture agencies, state and local governments to assist pork producers with euthanizing hogs. The National Incident Coordination Center (NICC) of USDA’s Animal and Plant Health Inspection Service (APHIS) will work with farmers and packers to facilitate hog depopulation. Any coordination among farmers to implement USDA’s policies will happen at the direction and under the supervision of the USDA or state governmental authorities, NPPC said.
NPPC also proposes to help federal and state agencies develop other initiatives that address logistical, economic, ethical and environmental challenges presented by pork processing facility closures and capacity constraints caused by the COVID-19 outbreak. NPPC said the organization’s role would include relaying best practices for supply chain management and depopulation. The organization will not share competitively sensitive information with its members.
NPPC appreciates the Antitrust Division’s recognition that responding to the COVID-19 crisis “will require unprecedented cooperation between federal, state, and local governments and among private businesses,” which is a “necessary response to exigent circumstances [to] provide Americans with products or services that might not be available otherwise,” NPPC said in its review request. “That cooperation between the public and private sectors is necessary to continue feeding the United States and to ensure the humane treatment of its livestock.”
Major pork processors have been named in lawsuits alleging price-fixing in the pork market. A lawsuit filed in the US District Court for the District of Minnesota on June 28, 2018, claimed pork processors and other ag-related companies concocted a scheme to collectively raise pork prices in 2009. The filing stated that Agri Stats, Clemens Food Group, Hormel Foods, Indiana Packers, JBS USA, Seaboard Foods, Smithfield Foods, Triumph Foods and Tyson Foods “systematically controlled their output.”
Most recently, lawyers for plaintiffs in the case asked for judicial notice of President Trump’s executive order to keep meat processing plants open during the coronavirus (COVID-19) pandemic on grounds that statements in the order are consistent with allegations that processors were able to manipulate prices for pork.