The department alleges the company charged farmers penalty fees for switching processors.
The Department of Justice partnered with the U.S. Department of Agriculture (USDA) to file a lawsuit against Koch Foods this month. Koch Foods is the fifth largest poultry processor in America and has processing facilities in many Southern states.
Poultry farmers regularly partner with large poultry processors to ship their chickens to grocery shelves for purchase. However, Koch Foods included a steep termination penalty in their contract, forcing farmers to pay half of the money they made through their work with Koch Foods if they decided to break their contract and switch processors.
The Departments of Justice and Agriculture claim that this termination penalty violates agriculture antitrust laws by unlawfully punishing farmers who decide to work with the competitors of Koch Foods.
“The Packers and Stockyards Act stands for fairness, and that’s what this enforcement action today delivers,” said USDA Senior Advisor for Fair and Competitive Markets Andy Green. “This action to protect growers’ right to compete signals the joint commitment of the USDA and Justice Department to open competitive markets.”
As the Lord Leads, Pray with Us…
- For the judge(s) who will hear the antitrust case brought by the DOJ and USDA.
- For Attorney General Merrick Garland and Secretary Vilsack as their departments collaborate on the case.
- For Advisor Green to be led by God as he provides input on Fair and Competitive Markets.
- For American farmers and producers as they navigate the contracts and penalties in production agreements.
Sources: Department of Justice
