In August, Tyson Foods ended a dispute with the federal government over violations of a 2002 consent decree and federal pollution discharge permit by agreeing to pay a $2,026,500 fine. 

The Justice Department and the Environmental Protection Agency announced the agreement to resolve wastewater issues that occurred in 2003 and 2004 at Tyson’s Dakota City, Nebraska, beef packing plant. In April 2002, IBP – later acquired by Tyson – entered into a consent decree that required the construction of a $2.9 million nitrification system intended to reduce the ammonia content of wastewater discharges into the Missouri River.

According to EPA, from July 2003 through March 2004, Tyson failed to operate the nitrification system properly, resulting in “numerous discharges of fecal coliform and nitrates and high levels of toxicity to aquatic life in the Missouri.”

Increasing numbers of farmers have reported termination of hog production contracts. We’ve heard from a number of contract growers who have received notification from integrators that their contracts will no longer be fulfilled due to H1N1 flu or mandatory country-of-origin regulations.

Integrators have referenced “force majeure” contract provisions in termination notices. Force majeure is a contractual clause that excuses performance obligations under contracts due to extreme circumstances like war or natural disasters such as floods or tornadoes.

According to Erin Herbold, staff attorney at the Center for Agricultural Law and Taxation at Iowa State University, H1N1 flu and mandatory COOL do not constitute a force majeure event. The Iowa Supreme Court has ruled that a “force majeure clause is not intended to shield a party from normal risk associated with an agreement.”

Using mandatory COOL or H1N1 as a rationale for contract termination is a thinly veiled attempt by integrators to renegotiate contracts and force contract growers to accept a lower price per pig space.

This behavior by packers and integrators is yet another reason why it is crucial that the Secretary of Agriculture write a strong rule regarding the Packers and Stockyards Act’s prohibition of “unreasonable preferences” as required by the 2008 farm bill.

For more information about protections for contract growers, contact John Crabtree at johnc@cfra.org or 402.687.2103 x 1010.