The Feds Just Indicted Meatpacking Moguls for Driving Up the Price of Your Chicken

The DOJ alleges that executives at Pilgrim’s Pride Corp. and Claxton Poultry Farms fixed prices for half a decade.

Did Big Chicken make its profits even tastier by colluding to push up wholesale prices? bhofack2/Getty

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Still reeling from COVID-19 outbreaks among slaughterhouse workers, the US poultry industry has another major problem on its hands: Several executives were just indicted by the Department of Justice for allegedly conspiring to boost chicken prices. 

“The one-count indictment, returned by a federal grand jury in Colorado, allege current and former senior executives at Pilgrim’s Pride Corp. and Claxton Poultry Farms fixed prices and rigged bids from 2012 to 2017,” the Wall Street Journal reported on June 3. Pilgrim’s Pride, majority-owned by Brazil meat-packing giant JBS, is the second-largest US chicken producer, churning out nearly one in five chickens produced in the United States. 

As the Journal notes, the industry is tightly consolidated, with just five companies processing 61 percent of the 41 billion pounds of chicken consumed annually by Americans. The federal indictment comes after multiple lawsuits from big buyers claiming the chicken giants colluded to boost prices. The suits charge that industry titans cooperated with each other to hold down the supply of chicken, pushing up wholesale prices and thus increasing profits—allegations the companies have repeatedly denied. 

“Wholesale chicken prices climbed 11 percent from mid-2012, when the US Department of Agriculture began calculating national prices for whole chickens, until the end of 2018,” the Journal reports. (Since then, prices have dropped significantly as the industry rolled out new processing plants and ramped up production to take advantage of what it hopes will be fast-rising exports.) The DOJ’s investigation of Big Chicken came to light a year ago,” after federal attorneys sought to intervene in a long-running lawsuit in which customers accused chicken processors, including Tyson Foods Inc., Pilgrim’s Pride Corp., Sanderson Farms Inc. and Perdue Farms Inc., of illegally cooperating,” the Journal reported in June 2019. 

The indictments caused the stocks of poultry-packing companies to tumble in Wednesday trading. Pilgrim’s Pride shares fell more than 10 percent; rival Tyson, the top US chicken producer and also a massive player in beef and pork, dropped 4 percent, and number-three chicken farm Sanderson shed 6 percent. JBS, Pilgrim’s majority shareholder, saw its stock price dip 2 percent. 

JBS is no stranger to legal trouble in its home country, Brazil. Back in 2017, JBS’s holding company, J&F Investimentos, agreed to pay a $3.2 billion fine after admitting to delivering $150 million in bribes to Brazilian politicians—the largest corporate penalty in history, according to the Financial Times

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