USDA, Farmland Agree on Complaint

June 1, 2001

USDA's Grain Inspection, Packers and Stockyards Administration (GIPSA) and Farmland National Beef Packing Company, L.P. (Farmland National) have reached an agreement to settle GIPSA's complaint against Farmland National. In July 1999, GIPSA filed a complaint alleging that Farmland National retaliated against Callicrate Feedyard of St. Francis, KS, in violation of the Packers and Stockyards Act (P&S Act).

According to the complaint, Farmland National changed its bidding and buying practices at Callicrate Feedyard after a major livestock journal published a letter written by the manager of Callicrate Feedyard that was critical of Farmland National. Farmland National has consistently denied and continues to deny any wrongdoing.

GIPSA and Farmland National both realize that to pursue this case to final judicial resolution could be time consuming and expensive, USDA said. The ultimate decision would probably not be made for more than a year, after a decision by a USDA administrative law judge and potential appeals to the judicial officer of USDA and to the U.S. Court of Appeals. Termination of this case by the entry of this consent order is believed to be in the best interest of the parties and the industry.

Under the terms of the settlement, Farmland National is to comply with the law and shall not engage in any unfair or unjustly discriminatory practice or subject any cattle seller to any undue or unreasonable prejudice or disadvantage in any respect whatsoever, in connection with its operations under the P&S Act.

The consent order does not require Farmland National to visit, offer bids or buy cattle from any particular seller, including Callicrate Feedyard, unless the failure to do so is a violation of the P&S Act. Retaliation is a violation of the P&S Act. In the Consent Order, Farmland National recognizes that it benefitted from the cost and expense incurred by GIPSA in conducting its investigation of this matter, because GIPSA has clarified Farmland National's rights and responsibilities under the law and wishes to reimburse GIPSA. However, as reimbursement is not provided for by law, Farmland National agreed to pay the Treasury of the United States $95,000 in lieu of reimbursement.