U.S. District Judge Iain Johnston in the federal court in Rockford, Illinois on Monday ruled for now to reject Deere’s effort to end the lawsuit, which was filed at the end of Democratic President Joe Biden’s administration in January.

The lawsuit alleges Deere is violating federal antitrust law by controlling too tightly where and how farmers can get their equipment repaired, allowing the Illinois-based company to charge artificially higher prices. The FTC was joined in its lawsuit by Michigan, Wisconsin and three other U.S. states.

Deere did not immediately respond to a request for comment, and the FTC declined to comment. Deere has denied any wrongdoing.

Ruling adds to legal woes

The ruling adds to Deere’s legal woes over repair services. Johnson ruled in 2023 that the company must face similar claims from crop farms and farmers that it illegally restricted maintenance and repair services through the use of authorized dealers.

The FTC and states, like the private plaintiffs, contend that Deere is abusing its market power, allowing the company to control prices and minimize competition.

Deere is blocking farmers from acquiring the “tools and information necessary to repair their equipment in a timely and cost-effective manner,” the FTC had said in a court filing in April.

‘No basis in law’

Deere countered that it does not compete in the market for repair services. The government plaintiffs filed their lawsuit “with two vague federal antitrust claims that hide the ball and have no basis in law,” Deere told the court.

The company also challenged the lawfulness of the structure of the FTC, an independent, bipartisan board that enforces antitrust and consumer protection laws. Deere alleged that restrictions against removing FTC commissioners illegally bar the president from exercising lawful oversight.

Johnston said Deere failed to show how it was harmed by the FTC’s removal procedures.

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The merger, which would create a company worth US$34 billion including debt, would bring the combined company closer in global scale to Bunge’s leading rivals ADM and Cargill.

The proposed combination with Glencore-backed Viterra, however, is attracting scrutiny from regulators concerned about consolidation in the agricultural sector.

Heckman told Reuters healthy commodities market competition in Canada, the U.S., Brazil, Argentina, China and parts of Europe should allow Bunge to avoid having to sell assets to gain approval for the merger from antitrust authorities.

But if asset liquidations are required, Bunge believes demand for its assets is very strong, Heckman said at Reuters’ Transform Food USA event in Minnesota.

“If we have to sell some assets, everybody has called to be on the list to buy them. We’ll get a very fair price,” he said.

Bunge expects to finalize the deal by mid-2024 after closing conditions are met and regulators sign off on the deal.

— Karl Plume reports on agriculture and ag commodities for Reuters from Chicago.

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In a ruling on Tuesday, U.S. District Judge Steven Seeger in Chicago said the risk of unfair prejudice against the egg producers and marketers by showing the graphic videos was “extreme” and outweighed any minimal value in the antitrust litigation accusing them of curbing domestic supply in order to charge higher prices.

“After watching the videos, it would not take much for jurors to believe that the egg industry abuses chickens,” Seeger wrote.

Kraft and the other plaintiffs wanted to play the videos at the trial next month to bolster their claim that an industry-wide animal welfare initiative announced in 2002 was a “sham” and actually part of a broader scheme to restrain the supply of eggs.

Seeger’s ruling on the videos was among several orders he issued on Tuesday addressing the scope of what jurors will be allowed to see and hear at the five-week trial.

Kraft and the other plaintiffs, also including General Mills and Nestle, are seeking more than US$110 million in damages against United Egg Producers and other defendants, including two farms.

Lawyers for the defendants on Wednesday did not immediately respond to a request for comment.

Representatives for Kraft and the other companies either declined to comment or did not immediately respond to a request for comment.

Seeger is presiding over a case that was previously in Philadelphia federal court as part of a multidistrict litigation proceeding. Kraft’s case returned to the Northern District of Illinois in 2019.

Lawyers for Kraft and co-plaintiffs said they obtained the videos from the Humane Society of the United States. They purport to show “day-to-day operations within defendants’ facilities.”

In a court filing, attorneys for United Egg Producers and the other defendants said the videos were “surreptitiously” recorded by animal rights activists and include “highly edited footage.”

The attorneys also said the recordings were irrelevant to the plaintiffs’ claims.

Seeger said the plaintiffs’ lawyers do not need the videos to argue that the egg industry’s promotion of animal welfare was not genuine.

“After personally watching all of the videos, the court is convinced that the videos would undermine the truth-seeking function of the trial,” Seeger wrote.

— Mike Scarcella is a Reuters legal affairs reporter in Washington, D.C.

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In a decision dated Oct. 31, the Competition Tribunal — the federal quasi-judicial body with the power of approval over any antitrust actions proposed by the federal Competition Bureau — dismissed an application from the bureau that would have ordered P+H to sell either the former Dreyfus elevator at Virden, Man. or the P+H elevator at Moosomin, Sask., about 60 km northwest.

“While we are disappointed that the tribunal has ruled against our challenge, we are carefully reviewing the tribunal’s decision to determine appropriate next steps,” the Competition Bureau said in a release Nov. 1.

The bureau proposed the order following Winnipeg-based P+H’s September 2019 deal to buy all 10 of the primary grain elevators Dreyfus built in the four western provinces between 1998 and 2003.

Of the 10, six of the Dreyfus sites are about an hour’s drive or less from at least one other P+H elevator, but the bureau in December 2019 said it would ask the tribunal to make an order only regarding the Virden and Moosomin sites. The bureau also sought an order preventing P+H from buying any other elevator in those markets for a set period of time.

The Moosomin and Virden elevators “were close competitors due to their proximity” along the Trans-Canada Highway, the bureau said at the time, as the companies “closely monitored each other’s wheat and canola prices and responded to competitive activity from each other by offering farmers better prices.”

The deal “eliminates this rivalry,” meaning “farmers in the corridor between Moosomin and Virden will earn less for their wheat and canola,” the bureau said.

P+H, through its Dreyfus deal, got “the ability and incentive to unilaterally exercise market power in the relevant markets,” the bureau said in its application, adding that P+H already “no longer intends” to follow through on previous plans to expand its rail car spot at Moosomin.

P+H challenged the bureau’s proposed order shortly after closing its deal with Dreyfus in December 2019. According to Competition Tribunal filings in January 2020, P+H said there was no evidence of any alleged imminent harm to farmers, other than allegations by the bureau that the company said “are based on a misunderstanding of the grain handling industry.”

The tribunal, in its Oct. 31 ruling, said the Competition Bureau’s commissioner “had not established that the acquisition lessened competition substantially in any relevant market, or was likely to do so in the future.”

Focusing on wheat and canola purchases from farmers in the Virden-Moosomin corridor, the tribunal said it found the “relevant geographic market for the purchase of wheat” was more likely than not to include “at least seven” elevators in that area. For canola, meanwhile, the area included “at least 10 elevators as well as four crushing plants.”

The tribunal said its evidence shows the price effects of the P+H deal for the Dreyfus elevators were “immaterial” and “several effective remaining competitors remained” in the market. It also found the relevant grain companies’ “post-merger” market shares to be below the 35 per cent safe harbour threshold for such cases.

The tribunal kept its specific reasons “confidential at this time.” It said it plans release a full public version of its decision at a later date, after it reaches consensus with the involved parties about what exact information would still have to be kept confidential going forward. — Glacier FarmMedia Network

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A preliminary settlement in the antitrust case was filed on Tuesday night with the federal court in Minneapolis, and requires approval by U.S. District Judge John Tunheim.

The accord follows the judge’s Sept. 14 approval of a similar $20 million settlement between consumers and JBS, one of Smithfield’s largest rivals (all figures US$).

Smithfield spokesman Jim Monroe said the company denied liability in agreeing to settle, and that the accord reduces the distraction, risk and cost of protracted litigation.

He also said the accord eliminates a “substantial portion” of Smithfield’s remaining liability in the nationwide case.

The company, based in Smithfield, Virginia, is a unit of Hong Kong-listed WH Group, which calls itself the world’s largest pork company.

Several companies have faced lawsuits in Minneapolis and Chicago also accusing them of inflating beef and chicken prices.

In the pork litigation, Smithfield previously reached settlements of $83 million with so-called “direct” purchasers such as Maplevale Farms and $42 million with commercial purchasers, a group that includes restaurants.

Some of the other defendants are Hormel Foods, Tyson Foods and data provider Agri Stats Inc.

Smithfield agreed to provide co-operation that the plaintiffs’ lawyers said will strengthen their cases against the remaining defendants.

The Biden administration has announced plans to bolster competition in the meat sector, amid concern that some meat packers could dictate prices and add to inflationary pressures.

— Jonathan Stempel is a Reuters correspondent covering U.S. courts and antitrust regulation from New York.

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Under the deal, which was announced last August, Sanderson is being combined with Continental Grain subsidiary Wayne Farms. Sanderson will cease trading on Friday.

The new business, to be called Wayne-Sanderson Farms, will be headquartered at Oakwood, Ga., northeast of Atlanta, and will be led by Wayne Farms CEO Clint Rivers.

Any outstanding issues with the Justice Department were resolved prior to close, according to a person familiar with the matter.

The deal had raised concerns on Capitol Hill, where lawmakers asked for the Justice Department to take a hard look at it because of fear of pushing up prices.

The Justice Department, which had been investigating the deal for antitrust concerns, declined comment.

Chicken wings and breasts have climbed 38 and 24 per cent since February year-over-year, respectively, according to research from Wells Fargo.

The Biden administration, concerned about price hikes in general and especially in the meat sector, announced in January that it would spend US$1 billion and issue new rules as a way to address a lack of “meaningful competition” in meat processing.

— Reporting for Reuters by Diane Bartz. Includes files from Glacier FarmMedia Network staff.

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The preliminary settlement by the Brazilian company and its U.S. units with so-called direct purchasers was disclosed on Tuesday, and is the first in nationwide antitrust litigation over beef price-fixing.

Lawyers for the purchasers called the accord an “icebreaker” and an excellent recovery, citing JBS’ $24.5 million settlement in 2020 of price-fixing claims by pork purchasers (all figures US$).

In a statement, JBS said it did not admit liability but that settling was in its best interest. It also said it will defend against beef price-fixing claims by other plaintiffs.

The accord requires approval by Chief Judge John Tunheim of the federal court in Minneapolis. Other defendants include Cargill, National Beef Packing Co. and Tyson Foods.

JBS settled one month after U.S. President Joe Biden announced a plan for new rules to bolster competition and stop “exploitation” in the meat sector.

Biden spoke amid concern that a small group of meat packers were capable of dictating beef, pork and poultry prices, adding to inflation pressures caused by rising labour and transportation costs and by COVID-19-related supply constraints.

In their lawsuit, direct purchasers accused the defendants, which controlled an estimated 80 per cent of U.S. fresh and frozen beef supply, of conspiring since 2015 to reduce slaughter volumes, creating a shortfall that smaller companies could not make up.

Commercial beef purchasers and consumers have brought similar lawsuits. Cattle producers also sued, claiming they were paid less than they would have received in a competitive market.

Tunheim also handles litigation concerning the alleged fixing of pork prices. A Chicago federal judge handles litigation concerning the alleged fixing of broiler chicken prices.

— Jonathan Stempel is a Reuters correspondent covering U.S. courts and regulators from New York; additional reporting by Tom Polansek.

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The initiative comes amid rising concerns that a handful of big beef, pork and poultry companies have too much control over the U.S. meat market, allowing them to dictate wholesale and retail pricing to profit at the expense of their suppliers and customers.

“Capitalism without competition isn’t capitalism. It’s exploitation,” Biden said. “That’s what we’re seeing in meat and poultry industries now.”

A recent White House analysis found that the top four meatpacker companies — Cargill, Tyson Foods, JBS and National Beef Packing Co. — control between 55 and 85 per cent of the market in the hog, cattle, and chicken sectors.

The U.S. Department of Agriculture (USDA) will spend the US$1 billion from American Rescue Plan funds to expand the independent meat processing sector, including funds for financing grants, guaranteed loans, and worker training, said Agriculture Secretary Tom Vilsack, who was speaking at an event with Biden.

USDA will also propose rules this year to strengthen enforcement of the Packers and Stockyards Act and to clarify the meaning of “Product of USA” meat labels, which domestic ranchers have said unfairly advantage multinational companies that raise cattle abroad and only slaughter in the United States.

Attorney General Merrick Garland, also speaking at the event, said “too many industries have become too consolidated over time,” and that the antitrust division of the Department of Justice has been chronically underfunded.

The Biden administration issued an executive order last year that advocated a whole-of-government approach to antitrust issues.

A central concern in agriculture has been meat prices, which have risen at a time when the White House is fighting inflation. An analysis in December by the White House economic council found a 120 per cent jump in the gross profits of four top meatpackers since the pandemic began.

The meat industry has said the White House analysis was inaccurate and criticized the new plan.

National Chicken Council president Mike Brown called the plan “a solution in search of a problem.”

North American Meat Institute spokesperson Sarah Little said staffing plants remains the biggest issue for meatpackers and that the White House plan would not address it.

“Our members of all sizes cannot operate at capacity because they struggle to employ a long-term stable workforce,” she said. “New capacity and expanded capacity created by the government will have the same problem.”

Eric Deeble, policy director at the National Sustainable Agriculture Coalition, cheered the plan, calling it a “very positive step to ensure farmers and ranchers receive fair prices.”

The anticipated rulemaking under the Packers and Stockyards Act “could have a significant impact,” said Peter Carstensen, emeritus professor of law at University of Wisconsin-Madison and former antitrust attorney at the Department of Justice. But he noted that investment in independent processing itself would not address market concentration.

Austin Frerick, deputy director of the Thurman Arnold Project at Yale University, an antitrust research centre, said the plan does not go far enough to tackle the power of the top meatpackers.

“I do not believe this (plan) will meaningfully change the concentration numbers,” he said.

— Leah Douglas reports on U.S. agriculture and energy policy for Reuters from Washington, D.C.; additional reporting by Diane Bartz and Trevor Hunnicutt.

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Republican U.S. Senators Mike Rounds of South Dakota and Charles Grassley of Iowa and Democratic Senator Jon Tester of Montana have proposed legislation to create an office for a special investigator within the U.S. Department of Agriculture.

U.S. lawmakers and USDA are seeking to address concentration in the beef processing industry in the aftermath of a ransomware attack against meatpacker JBS that disrupted U.S. meat production and disruptions caused by the COVID-19 pandemic.

The proposed office would have a team of investigators, with subpoena power, dedicated to preventing and addressing anticompetitive practices and enforcing antitrust laws in meatpacking, according to a statement from the senators.

“I think it’s a good proposal,” Vilsack said at a congressional budget hearing. “I think it’s part of what needs to be done.”

Four companies including JBS in 2018 slaughtered about 85 per cent of U.S. grain-fattened cattle that are made into steaks, beef roasts and other cuts of meat for consumers, according to USDA.

USDA has separately said it plans to strengthen its enforcement of a 100-year-old federal law intended to protect farmers and ranchers from unfair trade practices. The agency also said it will support increased processing capacity as part of a US$4 billion initiative to strengthen the country’s food system.

— Reporting for Reuters by Tom Polansek in Chicago.

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The guilty plea makes Pilgrim’s Pride, mostly owned by Brazilian meatpacker JBS, the first U.S. chicken company to reach an agreement with the government over allegations that industry executives conspired to increase chicken prices from 2012 through 2019.

Pilgrim’s Pride agreed to plead guilty to one count of conspiracy to limit competition in chicken product sales, according to a Securities and Exchange Commission (SEC) filing. A company statement said the agreement covered three chicken contracts with one U.S. customer.

As part of the deal, the department’s antitrust division will not bring more charges against Pilgrim’s Pride in the case, the statement said. Shares jumped 6.1 per cent to $16.63 on Wednesday afternoon (all figures US$).

“We are encouraged that today’s agreement concludes the antitrust division’s investigation into Pilgrim’s,” CEO Fabio Sandri said.

The antitrust division confirmed it reached a plea agreement with Pilgrim’s Pride and declined further comment until the deal is filed. It is subject to the approval of the U.S. District Court of Colorado.

The former CEO of Pilgrim’s Pride, Jayson Penn, was indicted in June, along with other current and former industry executives, on charges of seeking to fix chicken meat prices. Penn has pleaded not guilty.

Last week, the government broadened the probe by indicting more industry executives, including Bill Lovette, who preceded Penn as CEO of Pilgrim’s Pride.

Rival supplier Tyson Foods said in June it was co-operating with the department’s investigation under a corporate leniency program that could protect the company from criminal prosecution.

Separately, JBS said it will pay a $26.9 million fine after making a deal with the SEC over violations related to Pilgrim’s Pride’s books, and prosecutors said JBS parent J+F Investimentos will pay $256 million after pleading guilty to violating the U.S. Foreign Corruption Practices Act.

–– Reporting for Reuters by Rama Venkat in Bangalore, Tom Polansek in Chicago and Diane Bartz in Washington.

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