The Packers and Stockyard Division is actively investigating Tyson Foods, one of the largest meat companies in the country, according to interviews with contract farmers and a USDA official.
The PSD, a division of the U.S. Department of Agriculture, is tasked with investigating and taking enforcement actions against violations of the Packers and Stockyard Act. The law was created in 1921 to protect livestock and poultry producers from “unfair, unjustifiably discriminatory, or deceptive practices.”
The agency regularly investigates possible violations such as suppression of wages for meat processors, non-payment of livestock and discrimination against contract farmers. An investigation does not always lead to enforcement action or penalties.
The agency would neither officially confirm nor deny the existence of ongoing investigations.
“PSD does not comment on investigative activities or lack thereof,” the agency said in a statement to Investigate Midwest. “As a regulator, PSD closely monitors all industry participants, including meatpackers and poultry companies, for compliance with the Packers and Stockyards Act.”
A USDA official confirmed that an investigation has been ongoing since early August. Investigate Midwest is not naming the employee because of concerns about retaliation from the employer.
The official did not provide specific details about the agency’s objectives, but said Tyson Foods was aware of the matter and that it was larger in scope compared to other PSD investigations.
Tyson Foods is the nation’s largest chicken producer, with revenue of nearly $53 billion last year. The company operates 183 chicken operations in the United States, including hatcheries, processing plants and feed mills. The company contracts with nearly 4,000 chicken farmers nationwide.
This investigation follows Tyson Foods’ closure of nine meatpacking plants across the country beginning in early 2023. The company also has active litigation over alleged antitrust violations.
Tyson Foods did not respond to repeated requests for comment.
Investigate Midwest filed a Freedom of Information request with the U.S. Department of Agriculture in May seeking records related to potential PSD action against Tyson Foods after two former contract growers told a reporter they had been contacted by the agency. The contract growers said they were questioned about the debt they had incurred to work with the company and their operations.
The U.S. Department of Agriculture (USDA) denied the request for the records in June, citing a federal exemption for records that could relate to “enforcement records for an ongoing or planned investigation.”
“(The exception) protects law enforcement records when it is reasonably expected that their release would prejudice law enforcement proceedings. The relevant law enforcement purpose in this case is enforcement of the Packers and Stockyards Act,” the June response letter said.
Investigate Midwest has appealed the denial of the documents and is awaiting a response from the agency.
The Packers and Stockyards Act has been substantially revised in recent years as the federal government has shown increasing interest in the poultry industry.
Recent updates include requiring the sharing of payment information between chicken companies and the contract farmers who raise the birds. The PSA has also been updated to prevent discrimination against livestock and poultry farmers based on race, gender, age or disability.
The USDA is still working on a proposed rule to combat the “problematic” practices of contract growers who take on excessive debt to work with companies. The agency expects to finalize that proposed rule early next year.
In May, Investigate Midwest reported that chicken farmers who had worked with Tyson were left with millions of dollars in debt after the company closed factories. Many of them faced bankruptcy and foreclosure, while others retired, found work outside of farming or sold their land to pay off their debts.
Peter Carstensen, an antitrust expert and professor emeritus of law at the University of Wisconsin Law School, said the PSD typically investigates companies to obtain a formal complaint of violation of the law.
“It’s a little more plausible that they’re seriously considering whether they can claim that Tyson violated the provisions of the Packers and Stockyards Act by making various types of investments and then closing the factories,” he said.
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