Less than a year after the controversial and frankly nauseating documentary, Food Inc, which focused a large portion of its camera-time on the poultry growing industry, Tyson Foods is again under scrutiny.  Recently, ten Oklahoma chicken growers won a $7.3 million lawsuit filed against Tyson.  The lawsuit claimed that Tyson “defrauded a group of 10 McCurtain County chicken growers through a series of deceptive and coercive business practices”.  In the lawsuit, chicken growers claimed that Tyson used its “tremendous economic clout” to force them into growing chickens at less than break-even costs.  They also claimed that Tyson used ”verbal and financial pressure” to persuade growers to construct more modern chicken houses that would eventually force growers to follow any Tyson demands no matter how unreasonable because of their large debt load.  They went on to say that Tyson consequently punished growers who refused to upgrade by providing them with inferior quality feed and chicks, as well as paying them less for their mature birds.

This was just the first of many similar trials that are slated to take place over the same claims.  More than 50 chicken growers initially filed a lawsuit in May 2008 against Tyson Foods.

We cannot cite many instances to add a lot of value up the supply chain in most agriculture sectors and see margins bigger at the retail level than at the farmer end, but this is just an issue of company mistreatment of its supply chain.  While Tyson’s company is at fault for attempting to defraud farmers, I’d like to point my attention towards the farmer.  This is clearly a case of an unhealthy business relationship with the upstream supplier side gets the short end of the stick due to financial power.  My questions are (1) do you believe that these suits will change the way Tyson treats its suppliers, (2) Tyson mentioned leaving the area since it could be legally risky, how can Tyson generate other farmers’ confidence in their tarnished reputation if they leave or is it negligible due to relatively few jobs in southern rural areas, and (3) personally, as a consumer, do stories like this deter you from buying a company’s product?

In my opinion, Tyson will realize that this could be potentially disastrous for its company.  If anyone has any ethics in upper management, I believe they will remove the people responsible for this issue before it is too late (wishful thinking?).  Being one of the United States’ top chicken manufactures, there is too much at stake to risk going under.  I think that if Tyson goes through with its threat it will be very difficult to convince farmers to grow especially if they don’t have any capital in place already.  I see them possibly expanding production at already contracted chicken houses with big incentives given to the farmers or in the future vertically integrating themselves to grow the chickens themselves to hedge from legal risk.  Personally, however, this will not affect my shopping, which I predict is the same for most people.  I see consumer health and price prevailing over the mistreatment of chicken farmers in this situation. 

Check the article out for yourselves and let me know what you think on the subject:  http://www.gainesville.com/article/20100403/articles/100409805?p=all&tc=pgall&tc=ar