WASHINGTON, D.C. – JBS Foods will pay $83.5 million to settle a lawsuit alleging it conspired with other meat packers to fix the price of fed cattle, if a federal judge signs off on an agreement between the company and several plaintiffs.

The proposed settlement was announced Jan. 31. The 2019 lawsuit claimed the actions of JBS, Tyson Foods, Cargill and National Beef violated U.S. antitrust law. As of press time, JBS was the only defendant to reach a settlement with the plaintiffs.

In the class-action lawsuit, the plaintiffs – the National Farmers Union (NFU), R-CALF USA and four fed cattle producers – said the meat packers “conspired to fix, depress, suppress or stabilize the price of fed cattle they purchased in the United States.”

The lawsuit said the defendants conspired to manipulate the price of live cattle futures and options traded on the Chicago Mercantile Exchange (CME) in violation of the Sherman Act, the Commodity Exchange Act and the Packers and Stockyard Act.

In agreeing to the settlement, JBS admitted no wrongdoing for the claims alleged, according to Nikki Richardson, JBS USA spokeswoman. 

“JBS has entered into an agreement to settle with the largest outstanding class in the In re Cattle and Beef Antitrust Litigation,” Richardson said in an email to Farm World. “JBS maintains the claims asserted in the litigation are frivolous and without merit.

“This decision is in the best interest of the company, and JBS will continue to vigorously defend its interests against the remaining plaintiffs.”

The settlement calls for JBS to cooperate in any future prosecution of Tyson, Cargill and National Beef.

Bill Bullard, CEO of R-CALF USA (Ranchers Cattlemen Action Legal Fund United Stockgrowers of America), told Farm World his organization is pleased to have reached the proposed settlement with JBS. He and the other plaintiffs look forward to prosecuting their claims against the remaining defendants, Bullard added.

The lawsuit alleged that the four meat packers engaged in unlawful collusion to suppress cattle prices beginning at least around mid-2015, he said.

“During the widespread drought from 2011-2013, the supply of cattle was reduced to decades-low levels and beef demand remained strong,” Bullard explained. “As a result, cattle prices in 2014 reached the highest nominal levels in history. Due to the long biological cycle of cattle (meaning it would take three years to rebuild the herd), it was expected that cattle prices would remain strong for several years.

“But, beginning in 2015, cattle prices fell further and faster than any time in history. We allege that cattle producers suffered financial losses as a result of the alleged collusion.”

In a statement, NFU President Rob Larew said his organization was also pleased with the settlement.

“We look forward to prosecuting our claims against the remaining defendants, Tyson, Cargill and National Beef,” he said. “Outside of the litigation, NFU’s work to restore pricing transparency and competitiveness for family farmers and ranchers continues.”

Bullard said if the proposed agreement is approved, the court will order that a notice be sent to the settlement classes informing them of the proposed settlement’s details, including how class members can make a claim for their share of the settlement.

Class members include all persons or entities within the U.S. that directly sold fed cattle for slaughter to Tyson, JBS, Cargill and/or National Beef from June 1, 2015, to Feb. 29, 2020, other than pursuant to a cost-plus agreement and/or profit sharing agreement, he said. The class also includes those persons or entities who held a long position in live cattle futures traded on the CME prior to June 1, 2015, and subsequently liquidated the long position through an offsetting market transaction at any point prior to Nov. 1, 2016, Bullard said.

Lawyers for the plaintiffs have estimated there may be thousands of members in each of the two groups, according to media reports.