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Sanderson, other processors sued for alleged price-fixing

By JACK WEATHERLY

Former contract chicken growers have filed suit against major processors, including Laurel-based Sanderson Farms Inc., seeking damages for what they contend is price fixing that squeezed them out of their livelihood.

The other defendants are Tyson Foods Inc., Pilgrim Pride Corp., Perdue Farms and Koch Foods Inc.

The suit was filed Jan. 27 in the U.S. District Court for the Eastern District of Oklahoma and seeks class status.

The complaint argues that the processors violated the Sherman Antitrust Act and the Packers and Stockyards Act.

Mike Cockrell, treasurer and chief financial officer for Sanderson, declined to comment but said that the company “will vigorously defend” itself against the allegations. The company has not filed a response yet, he said.

Sanderson and 13 other processors were sued along the same lines last fall in the U.S. District Court for the Northern District of Illinois.

The five plaintiffs in the Oklahoma suit live in Mississippi, Alabama, North Carolina, Oklahoma and Texas.

Mississippian Johnathan Walters is one of the plaintiffs.

Walters said in the complaint that he borrowed $639,000 to build broiler houses to Sanderson specifications in 2001.

Sanderson demanded that Walters make further investments, and so he spent another $100,000, he said.

Processors provide chicks, feed and expertise for the farmers to grow the fowl to marketable size.

The Sanderson compensation to Walters was insufficient and he shut down his business and was left with $130,000 in debt and no use for the houses other than growing broilers, he said.

The National Chicken Council, an industry trade group representing the companies, said the suit is a matter of a disgruntled few.

“The way that the system it’s set up it’s a performance-based and incentive system that rewards those farmers who invest who put in the most work and raise the healthiest birds,” spokesman Tom Super is quoted by the Associated Press as saying.

The system has worked for nearly six decades because it benefits both sides, Super said in an AP article.

As of last week, none of the processors had filed responses in court, but Tyson spokesman Gary Mickelson told AP: “We want our contract farmers to succeed and don’t consult competitors about how our farmers are paid. These are false claims.”

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