Notice2026-11329
United States et al. v. Agri Stats, Inc.; Proposed Final Judgment and Competitive Impact Statement
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Published
June 5, 2026
Issuing agencies
Justice DepartmentAntitrust Division
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[Federal Register Volume 91, Number 108 (Friday, June 5, 2026)]
[Notices]
[Pages 34512-34561]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2026-11329]
[[Page 34511]]
Vol. 91
Friday,
No. 108
June 5, 2026
Part IV
Department of Justice
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Antitrust Division
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United States et al. v. Agri Stats, Inc.; Proposed Final Judgment and
Competitive Impact Statement; Notice
Federal Register / Vol. 91 , No. 108 / Friday, June 5, 2026 /
Notices
[[Page 34512]]
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DEPARTMENT OF JUSTICE
Antitrust Division
United States et al. v. Agri Stats, Inc.; Proposed Final Judgment
and Competitive Impact Statement
Notice is hereby given pursuant to the Antitrust Procedures and
Penalties Act, 15 U.S.C. 16(b)-(h), that a proposed Final Judgment,
Stipulation, and Competitive Impact Statement have been filed with the
United States District Court for the District of Minnesota in United
States of America et al. v. Agri Stats, Inc., Civil Action No. 23-cv-
03009. On November 15, 2023, the United States filed a Second Amended
Complaint alleging that the information exchanges operated by Agri
Stats among competing meat processors in the broiler chicken, pork, and
turkey markets unreasonably restrained trade in violation of Section 1
of the Sherman Act, 15 U.S.C. 1. The proposed Final Judgment filed on
May 15, 2026, requires Agri Stats to make significant changes to its
information-sharing business, including: (1) prohibiting the sharing of
sales reports and other non-public pricing information between and
among competing protein processors; (2) prohibiting the sharing of most
data at the facility or company level; (3) requiring information to be
at least 45 days old on average; (4) requiring Agri Stats to make most
information available for public purchase on reasonable and non-
discriminatory terms; and (5) requiring Agri Stats to implement an
antitrust compliance program. It also requires Agri Stats to submit to
oversight by a monitoring trustee who will have the power to monitor
Agri Stats' compliance with the Stipulation and Order and proposed
Final Judgment.
Copies of the Complaint, proposed Final Judgment, and Competitive
Impact Statement are available for inspection on the Antitrust
Division's website at <a href="http://www.justice.gov/atr">http://www.justice.gov/atr</a> and at the Office of
the Clerk of the United States District Court for the District of
Minnesota. Copies of these materials may be obtained from the Antitrust
Division upon request and payment of the copying fee set by Department
of Justice regulations.
Public comment is invited within 60 days of the date of this
notice. Such comments, including the name of the submitter, and
responses thereto, will be posted on the Antitrust Division's website,
filed with the Court, and, under certain circumstances, published in
the Federal Register. Comments should be submitted in English and
directed to Kate Riggs, Anti-Monopoly and Collusion Enforcement
Section, Antitrust Division, Department of Justice, 450 Fifth Street
NW, Washington, DC 20530 (email address: <a href="/cdn-cgi/l/email-protection#afeefbfd81ffdacdc3c6cc82ecc0c2c2cac1dbdc82fbdac1c1cad682eeccdb82e2edefdadccbc0c581c8c0d9"><span class="__cf_email__" data-cfemail="4d0c191f631d382f21242e600e2220202823393e60193823232834600c2e3960000f0d383e292227632a223b">[email protected]</span></a>).
Suzanne Morris,
Deputy Director Civil Enforcement Operations, Antitrust Division.
United States District Court for the District of Minnesota
United States of America, U.S. Department of Justice, 950
Pennsylvania Avenue NW, Washington, DC 20530, State of Minnesota,
445 Minnesota Street, Suite 1400, St. Paul, MN 55101, State of
California, 300 S Spring St., Los Angeles, CA 90013, State of North
Carolina, 114 W Edenton Street, Raleigh, NC 27603, State of
Tennessee, P.O. Box 20207, Nashville, TN 37202, State of Texas, 300
West 15th Street, Austin, TX 78701, State of Utah, 350 N State
Street, Suite 230, Salt Lake City, UT 84114, Plaintiffs, v. Agri
Stats, Inc., 6510 Mutual Drive, Fort Wayne, IN 46825, Defendant.
No.: 0:23-CV-03009-JRT-JFD
Second Amended Complaint
For years, Agri Stats, Inc. has recruited the nation's largest meat
processors to exchange detailed information about their prices, costs,
and production plans. Each week, competing processors send
competitively sensitive information from their internal accounting
systems to Agri Stats. After auditing and standardizing these troves of
data, Agri Stats creates and distributes comprehensive reports
detailing competing processors' pricing, margins, inventories, and
operations.
Agri Stats operates its information exchanges to promote total
industry profits at the expense of competition. It does this by
providing processors with unique insights about their competitors'
production, costs, and pricing--and refusing to sell the same
information to processors' customers, farmers, workers, or consumers.
Agri Stats enables and encourages processors to use its asymmetrical
information exchanges to weaken competition, curb production, and
increase prices for purchasers. And processors follow this advice--
ultimately harming consumers. The Agri Stats model was so effective in
encouraging anticompetitive price increases that a Tyson executive
explained, ``we not only have to increase our price but we also have to
out run our competitors['] improvements.''
Agri Stats' conduct is unlawful and must be enjoined. The United
States and Plaintiff States bring this action for violations of Section
1 of the Sherman Act, 15 U.S.C. 1, to stop Agri Stats' anticompetitive
scheme and restore competition to heartland U.S. agriculture markets.
I. Introduction
1. Each day, U.S. meat processors produce millions of pounds of
chicken, pork, and turkey--staples of many Americans' diets. These
processors largely control the supply chains that deliver meat from
farms to grocery stores and restaurants, including the processing
facilities that turn live poultry and livestock into traditional meat
products.
2. Over the past two decades, Agri Stats has recruited and enabled
all major U.S. chicken, pork, and turkey processors to exchange
competitively sensitive information through its exclusive subscription
and consulting business. Chicken, pork, and turkey processors that
should be vigorous competitors have provided Agri Stats with detailed
data about their current costs, output, and prices. Processors
understand the competitive sensitivity of the information they provide
to Agri Stats.
3. Agri Stats then audits the data, manipulates it to facilitate
comparisons, and distributes it back to processors in a variety of
different reports, often less than a week after receiving the
information. The result is thousands of pages of reports spanning the
processors' operations--including reports covering live production,
processing, sales, and profitability of the broiler chicken,\1\ pork,
and turkey industries. The loosely anonymized reports contain
competitively sensitive information about each industry and,
frequently, each processor's facilities operating in these industries.
As former Agri Stats President Blair Snyder stated, ``[I]t's like Agri
Stats is doing the accounting for the whole industry . . . .''
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\1\ ``Broiler'' chickens refer to chickens raised for meat
consumption that are slaughtered before the age of 13 weeks.
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4. By design, Agri Stats focuses on raising industry-wide
profitability of the meat industries it services, which can harm
competition. Although it could be profitable for a processor to
increase production when its prices are below those of its competitors,
doing so would tend to lower industry profits; Agri Stats instead
enables and encourages processors to increase prices and restrict
output to boost profits industry-wide. As one Agri Stats employee
stated, ``A common saying in the Agri Stats circle is that `you cannot
produce your way to the top . . . .' '' Executives at some of
[[Page 34513]]
the country's largest meat processors testified that they could not
recall any examples in which their companies used Agri Stats
information to lower their sales prices to gain market share. An
executive at Smithfield, a pork processor, summarized Agri Stats'
consulting advice in four words: ``Just raise your price.''
5. Agri Stats designs its reports so that a processor does not need
to communicate directly with other processors to determine their
intentions, but instead can look at the reports to forecast what
competitors will do. And processors pay Agri Stats millions of dollars
for these reports, which the processors in turn use to limit
competition. For example, Agri Stats provides weekly sales reports that
compare the processor's prices to national averages and ranks the
processor's prices compared to the prices competitors charged for the
same products. Using these reports, processors target products priced
low compared to their competitors' products for price increases--a
practice some processors refer to as ``chasing price'' or ``pricing
with courage.'' A processor learns of these non-public opportunities
only because Agri Stats collects competitively sensitive pricing
information from nearly all other processors.
6. Other Agri Stats reports provide processors with metrics
allowing them to forecast and monitor competitor output and confidently
restrain production when it is profitable to do so, which can lead to
higher prices.\2\ Even though Agri Stats masks some of the information
it collects, processors receive enough detailed data to allow them to
forecast the plans of competitors. For example, the former CEO of
Sanderson Farms assured investors during a 2009 call that Sanderson
could maintain its current production levels because information
provided by Agri Stats confirmed that his competitors were not planning
on increasing production, ``It makes no sense for us to ramp up. . . .
[P]eople are not planning on ramping up. I see a lot of information
from Agri Stats that tells me that nobody's going to ramp up.''
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\2\ Higher prices refers to prices that are higher than what a
purchaser would pay absent the anticompetitive behavior at issue.
This may include, for example, stabilized prices that do not
decrease as much as they would in a competitive market. Likewise,
supply limitations may include maintaining a consistent supply or
slowing the rate of supply increases.
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7. Agri Stats shares information about upstream markets as well,
including competitively senstitive information related to suppliers,
service providers, and workers. Agri Stats provides processors with
detailed information about how their competitors compensate workers,
including wage rates, farmer (or grower) pay, and other compensation
metrics. While the processors willingly share this information with
each other through Agri Stats, Agri Stats refuses to make the same
information available to workers and farmers.
8. To help enable processors to boost margins industry-wide rather
than compete by lowering prices to increase sales, Agri Stats produces
a profit margin report that allows competitors to evaluate their profit
margin performance relative to competitors. Processors have then used
this information to make executive bonus decisions. Such bonuses were
not based on the firm's total profits, but were instead tied to the
firm's profit margin relative to its competitors. Focusing on relative
margins, rather than a processor's own profits, tends to maintain high
industry prices and profits.
9. Agri Stats refuses to make its reports available to meat
purchasers and others in the protein supply chain, thereby
strengthening the advantage processors gain by sharing information only
with one another. As an Agri Stats employee explained to a restaurant
group representative who sought access to Agri Stats data, ``It would
not be prudent for us to make this information available to non-users.
Can you imagine if Tyson came in to negotiate with you and you started
the conversation with, `[W]ell Agri Stats gave us profit information
and it says . . . .' That would not be a good situation for us.''
10. Further, Agri Stats tells these processors how to use the
information to weaken competition. Agri Stats sells consulting services
to the processors and has advised nearly all of the major processors in
the broiler chicken, pork, and turkey industries--often with individual
employees advising several competing processors simultaneously.
Accordingly, Agri Stats does not advise its customers to compete more
vigorously against each other or take sales from one another; rather it
enables and encourages processors to raise total industry profits.
11. Agri Stats has organized several anticompetitive information
exchanges, padding its own pockets while its subscribing processors
earn millions by using information exchanged through Agri Stats to
suppress competition. Meanwhile, American consumers have paid higher
prices for staple food items, including chicken, pork, and turkey. The
United States and Plaintiff States seek to stop these unlawful
information exchanges.
II. Agri Stats and Its Co-Conspirators
12. Founded in 1985, Agri Stats is an Indiana for-profit
corporation that has operated a subscription and consulting service in
numerous meat processing industries. From 2013 to 2018, Agri Stats was
a subsidiary of Eli Lilly & Company. Eli Lilly spun off the company
after private plaintiffs named Agri Stats as a defendant in multiple
private antitrust class action lawsuits. Today, a consortium of
individuals, including four of Agri Stats' senior officers and two
foreign nationals, nominally own Agri Stats through a network of
holding companies. A subsidiary of TBG AG (the Thyssen-Bornemisza
Group), a Swiss venture capital firm, provided nearly all of the
funding to purchase Agri Stats.
13. Agri Stats owns Express Markets, Inc. (``EMI''), an Indiana
for-profit corporation established in 2001. EMI operates out of the
same building as, and shares staff with, Agri Stats. The two companies
frequently operate interchangeably, and processors refer to Agri Stats
and EMI as ``one and the same.'' \3\ EMI provides forecasting and
pricing analyses for the broiler chicken, pork, turkey, egg, and beef
industries that are typically more aggregated than Agri Stats-branded
reports and typically made available to non-processor customers. Even
so, EMI occasionally makes certain reports or information available
only to processors, just as Agri Stats does with its reports.
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\3\ A recent contract between Agri Stats and a large broiler
processor stated that ``Agri Stats offers EMI Price Discovery and
Analytics,'' treating the companies as one.
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14. Agri Stats' business model involves establishing and operating
information exchanges among direct competitors. In each industry where
Agri Stats operates, Agri Stats agrees with its subscribing processors,
and the processors agree with each other, to use Agri Stats to exchange
competitively sensitive information. Agri Stats' co-conspirators in
each industry include:
[ssquf] Broiler Chicken: Allen Harim Foods, LLC, Amick Farms, LLC
(``Amick Farms''), Case Farms,\4\ Norman W. Fries, Inc. (d/b/a Claxton
Poultry Farms), Fieldale Farms Corp., Foster Poultry Farms (``Foster
Farms''), George's,\5\ Harrison Poultry, Inc., Holmes Foods, Inc.,
House of Raeford Farms, Inc. (``House of Raeford''), Koch Foods, Inc.
[[Page 34514]]
(``Koch Foods''), Mar-Jac Poultry,\6\ Mountaire,\7\ O.K. Foods, Inc.,
Peco Foods, Inc., Perdue,\8\ Pilgrim's Pride Corp. (``Pilgrim's''),
Sanderson Farms, LLC (``Sanderson Farms''),\9\ Simmons Foods, Inc.,
Tyson,\10\ and Wayne Farms, LLC (``Wayne Farms'');
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\4\ ``Case Farms'' refers collectively to the affiliated
entities Case Foods, Inc., Case Farms, LLC, and Case Farms
Processing, Inc.
\5\ ``George's'' refers collectively to the affiliated entities
George's, Inc. and George's Foods, LLC.
\6\ ``Mar-Jac Poultry'' refers collectively to the affiliated
entities Mar-Jac Poultry, Inc. and Mar-Jac Poultry LLC.
\7\ ``Mountaire'' refers collectively to the affiliated entities
Mountaire Farms, Inc. and Mountaire Farms of Delaware, Inc.
\8\ ``Perdue'' refers collectively to the affiliated entities
Perdue Farms, Inc. and Perdue Foods, LLC.
\9\ As of 2022, Sanderson Farms and Wayne Farms are under common
ownership. When referring to the combined entity, the complaint
refers to ``Sanderson-Wayne.'' Otherwise, references to ``Sanderson
Farms'' refers to Sanderson Farms, LLC and its predecessor entities
and ``Wayne Farms'' refers to Wayne Farms, LLC and its predecessor
entities.``Tyson'' refers to the affiliated entities Tyson Foods,
Inc., and Keystone Foods, LLC.
\10\ ``Tyson'' refers to the affiliated entities Tyson Foods,
Inc., and Keystone Foods, LLC.
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[ssquf] Pork: Clemens Food Group, LLC (``Clemens''), Hormel Foods
Corporation (``Hormel''), Indiana Packers Corporation, JBS USA Food
Company, LLC (``JBS''), Seaboard Foods, LLC (``Seaboard''), Smithfield
Foods, Inc. (``Smithfield''), Triumph Foods, LLC (``Triumph''),\11\ and
Tyson;
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\11\ Seaboard and Triumph operate as a joint venture for certain
purposes. If referring to the joint venture entity, the complaint
refers to ``Seaboard/Triumph.''
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[ssquf] Turkey: Butterball, LLC (``Butterball''), Cargill,\12\
Cooper Farms, Inc. (``Cooper Farms''), Dakota Provisions, LLC, Farbest
Foods, Inc. (``Farbest''), Foster Farms, House of Raeford, Hormel,
Jennie-O Turkey Store, Inc. (``Jennie-O''), Kraft Heinz Foods, Michigan
Turkey Producers, LLC, Perdue, Prestage,\13\ Tyson, and West Liberty
Foods, LLC.
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\12\ ``Cargill'' refers both to Cargill Meat Solutions
Corporation and its parent company Cargill, Inc.
\13\ ``Prestage'' refers to Prestage Farms, Inc., Prestage
Foods, Inc., and Prestage Farms of South Carolina, LLC.
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15. Agri Stats paused its turkey and pork processing reports in
late 2019 in response to private antitrust litigation, but its
executives have stated that they want to resume reporting in these
industries once that litigation concludes.
III. Agri Stats Profits by Managing the Exchange of Sensitive
Information Among Competitors
16. Agri Stats operates an information-sharing scheme that allows
processors to exchange competitively sensitive information about their
operations and sales that is comprehensive, granular, current, and
available exclusively to processors.\14\
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\14\ Agri Stats provides significantly limited versions of its
reports to ``allied participants''--a ``very select'' group that
Agri Stats believes ``will use the data for the betterment of the
industry and the profitability of [its] customers.'' Allied
participants generally include pharmaceutical companies that use the
data to track the efficacy of drugs used in animals, poultry
genetics companies, and trade associations.
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17. Agri Stats collects competitively sensitive information that
processors ordinarily would not disclose to competitors. Agri Stats
does not gather information through voluntary surveys or periodic
polling. Instead, it secures from processors a ``direct download of
general ledgers and internal reports.'' When a processor becomes an
Agri Stats subscriber, or when an existing subscriber adds a new
facility, Agri Stats sends a ``setup specialist'' onsite to map the
processor's data to Agri Stats' systems. The implementation process
takes two to three weeks, but once completed, processors can send vast
quantities of data with minimal effort. This allows Agri Stats to
quickly disseminate information on nearly every quantifiable metric,
sometimes in a matter of days.
18. Processors share information with Agri Stats on all aspects of
their businesses, from the hatching of chicks or birth of livestock,
through the raising and slaughter of animals for meat, to customer
delivery. In the broiler chicken industry, for example, Agri Stats
receives data on live production, processing, and sales, including:
Live Production:
<bullet> Quantity of Breeder Chicks Placed
<bullet> Housing Costs
<bullet> Feed Costs
<bullet> Bird Weights
<bullet> Hatching Metrics
<bullet> Mortality Rates
Processing:
<bullet> Wage Rates
<bullet> Overtime
<bullet> Line Speed
<bullet> Insurance Costs
<bullet> Product Yield
<bullet> Maintenance Costs
Sales:
<bullet> Each Sales Transaction, including:
[cir] Purchasing Customer
[cir] Price Charged
[cir] Products & Amounts Sold
<bullet> Product Mix
<bullet> Freight Costs
19. Agri Stats audits the data it collects to ensure its
reliability, thereby preventing processors from hiding or withholding
information from their competitors. By validating the accuracy and
completeness of the information, Agri Stats reduces common challenges
to coordination--distrust among competitors and ``cheating'' on
agreements. Agri Stats boasted in one presentation that it provides
more trustworthy information than what a processor might receive
directly from a competitor (Fig. 1).
[[Page 34515]]
[GRAPHIC] [TIFF OMITTED] TN05JN26.172
Figure 1
20. Agri Stats converts the data shared by processors to common
metrics so they can make apples-to-apples comparisons across their
operations and sales. If processors exchanged internal ledgers
directly, they would need to account for each other's differing
accounting methods and processes. Agri Stats eliminates that barrier to
coordination. For example, Agri Stats sales reports group products
based on characteristics such as form, weight, grade, preservation
method, and packaging, which allows processors to assess how their
prices compare to weighted averaged prices of the same products sold by
competitors.\15\ Agri Stats processing reports similarly group workers
into job categories and provide wage and benefits information in a
unified form so that processors can compare employee wages and benefits
in common metrics.
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\15\ Agri Stats sales reports will report these weighted average
prices with as few as two processors (i.e., the recipient and one
other processor).
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21. Agri Stats compiles the data into ``books'' that it distributes
back to the processors. Each book contains comprehensive ``reports''
detailing each competitor's performance on various business functions.
The books that Agri Stats produces are hundreds of pages long and
replete with company- and facility-level information. Agri Stats'
former president described a typical book of reports as ``a phonebook
of information. . . . It's an inch and a half, two inches thick.''
22. The data that Agri Stats distributes is current. For example,
broiler chicken weekly sales reports, which include pricing data, are
typically published on Thursdays and include the previous week's data.
For pork, Agri Stats provided an online data system called
``Dataminer,'' which included data from the previous week. Processors
could query Dataminer to quickly and efficiently determine how their
prices varied from the national average.
23. Agri Stats also publishes monthly reports that include
information that is between thirty and sixty days old. Such current
data gives processors a near-real-time understanding of their
competitors' pricing, output, and costs, which enables the processors
to reduce competition.
24. To ensure processors provide comprehensive information, Agri
Stats regularly enforces a ``give-to-get'' policy that requires each
processor to share complete data for each of its facilities. Agri Stats
uses its position as a third-party intermediary to ensure that each
processor contributes complete information to further the overall
cooperative objective: increased profits for all processors.
25. Agri Stats provides processors with the names of the companies
and facilities participating in its various reports.\16\ Processors
actively monitor these lists and contact Agri Stats if certain
competitors do not appear. For example, after Seaboard temporarily left
the pork reports in 2017, Smithfield's Vice President of Finance wrote
to an Agri Stats employee, ``[W]here are you on Seaboard[']s re entry
into your program? January results?'' The Agri Stats employee
responded, ``Still in discussions but they will not be present in the
January report.'' She later assured the Smithfield Vice President of
her attempts to include its competitor in future reports: ``Believe me
I'm trying like hell[.]''
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\16\ Competitor data is superficially anonymized in Agri Stats
reports. As discussed below, however, processors can and do
deanoymize the data, linking particular data to individual
processors and processor facilities
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26. Some processors explicitly made their participation contingent
on their competitors' participation. For example, in an effort to
entice Tyson into providing data for all of its pork plants, Agri Stats
made a ``commitment to get JBS and Hormel completely onboard as well.''
Agri Stats kept Tyson apprised of efforts to recruit Tyson's
competitors and JBS and Hormel joined the reports, as Agri Stats
committed, within the year.
27. The ``give-to-get'' policy also ensures that the processors'
customers--including grocery stores and restaurants that buy broiler
chicken, pork, and turkey products--do not obtain the information
shared among the processors. When meat purchasers and workers have
sought Agri Stats reports, Agri Stats has refused. Asked why Agri Stats
adopted this policy, Agri Stats'
[[Page 34516]]
President explained, ``[O]ur customers are the producers. We don't get
in the way of the relationship between the producers and the buyers.''
IV. Agri Stats Shares Competitively Sensitive Information Through
Written Reports and Direct Counseling
28. Through its reports and consulting services, Agri Stats
provides processors with thousands of data points that allow them to
understand their competitors' businesses. The information that Agri
Stats collects and distributes is available nowhere else, and
processors have regularly used this information to inflate prices and
restrict output.
A. Agri Stats Reports
29. The most apparent way Agri Stats shares information among
competitors is through its written reports, which are organized into
``books.'' Agri Stats produces a number of books consisting of standard
and custom reports covering the various stages of production, including
live production, processing, sales, and operations profits.
<bullet> The ``sales'' book includes reports comparing a
processor's pricing for specific packaged cuts of meat with aggregated
sales information compiled from competitors' sales.
<bullet> The ``live production'' book includes reports that provide
details on each facility's costs and expenses for raising an animal for
slaughter.
<bullet> The ``processing'' book includes reports that list each
facility's costs and expenses for slaughtering an animal and dividing
it into parts for sale.
<bullet> The ``operations profits'' book includes reports that use
information from the live production, processing, and sales books to
provide information on each participating facility's profit margins.
<bullet> The ``bottomline report'' is a short report that ranks
each participating processor based on company-level profit margins on a
per animal and per pound basis.
30. In each industry, Agri Stats issues targeted reports that may
come included in one of the ``books'' or as a standalone report. For
example, as part of the turkey sales books, Agri Stats included more
targeted ``Retail and Deli'' sales reports, providing sales data for
deli turkey products. In pork, Agri Stats produced an Export Sales
Report tracking pork sales data broken down by product type to foreign
countries. Agri Stats also circulated to broiler chicken processors a
``Freezer Inventory Report'' providing information on the industry
current total inventories, which correlates with price.
31. In addition, processors frequently request other customized
reports, such as processing reports that compare only processing
facilities slaughtering broiler chickens of a certain size or sales
reports that focus on a particular product segment, like consumer tray
pack sales.
32. Each report presents information in different ways. Some
contain information about each competitor on a facility-by-facility
basis, while other reports contain key metrics and data about highly
specific product types. Two particular types of reports, sales and live
production, are discussed in detail below.
1. Agri Stats Sales Reports
33. Several different Agri Stats books provide processors with
competitively sensitive price information. Certain Agri Stats sales
reports provide information on competitors' invoice prices on a
company-basis for particular categories of meat (e.g., turkey deli
meat).
34. Other reports provide information for specific cuts of meat
(identified at the near-SKU level).\17\ Agri Stats provides the
weighted average and top quartile prices and tells processors where
their price ranks among competitors' prices for the same items. This
pricing information is recent (from the prior week for weekly reports
and 30-60 days removed for monthly reports). Agri Stats defines each
item by its cut, trim, weight, preservation method, and packaging,
allowing processors to see where their prices rank against competitors'
prices for like items.
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\17\ ``SKU'' refers to ``stock keeping unit'' and is used to
identify and track distinct types of items sold for inventory
purposes.
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35. For example, poultry processors sell millions of pounds of
chicken breasts each week to wholesalers, grocery stores, and
restaurants. Agri Stats divides this category into smaller
subcategories based on whether the cuts are left whole, sliced, diced,
cut into strips, or trimmed of fat. Agri Stats then further separates
these cuts by preservation method (e.g., ice, carbon dioxide, vacuum
packed, frozen, poly bagged) and packaging (e.g., boxed, ``combo bin,''
bagged, consumer/retail ready, regular tray pack, jumbo tray pack). By
reporting on these more detailed categories, Agri Stats allows
processors to compare prices on similar items at the near-SKU level
sold to like customers.
36. Figures 2 and 3 feature a single line from a weekly Agri Stats
broiler sales report providing information on a category of marinated
chicken drumsticks, chilled, and packaged in jumbo tray packs (Fig. 2
at (b)).\18\ For this particular item, Agri Stats tells the processor
how much of the product it sold (Fig. 2 at (c)) and how much the
industry sold (Fig. 2 at (c.2)), allowing the processor to determine
that its sales made up approximately 19% of the national sales for that
week (Fig. 2 (c)/(c.2)).
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\18\ Figures 2 and 3 appear as a single line in the report, but
are separated here to make them more legible.
[GRAPHIC] [TIFF OMITTED] TN05JN26.173
Figure 2
37. For each item, the sales report also tells each processor the
average price it charged (Fig. 3 at (d)) as well as the average
industry price (Fig. 3 at (d.1)) and top quartile price (Fig. 3 at
(d.2)) charged for like items. It then ranks the processor's price
(Fig. 3 at (e)), with the top rank going to the processor with the
highest price. In this example, Agri Stats tells the processor that its
price ``ranked'' seventh out of the eight sellers of this product
during the week (Fig. 3 at (e)), meaning its price was the seventh
lowest of the eight sellers.
[[Page 34517]]
[GRAPHIC] [TIFF OMITTED] TN05JN26.174
Figure 3
38. A processor that learns it has a low rank on price for an
item--such as seventh out of eight competitors--can raise prices on
that item with reduced uncertainty about losing business to a
competitor based on price.
39. The average and top quartile prices provide the processor with
additional details to guide its pricing. The Agri Stats sales report
tells the processor how far below the industry average price and below
the top quartile price (Fig. 3 at (e), (e.1.) & (e.2)) its price fell,
and it quantifies the economic impact of leaving the price at below
average and below top quartile prices as lost revenue (Fig. 3 at (f)
and (f.1)). This information is particularly valuable where only a
small number of processors--sometimes as few as two--sell comparable
items.
40. As discussed later, processors have routinely relied on the
weighted average price and weighted top quartile price information to
identify particular items for price increases. Processors in each
industry, often with Agri Stats' assistance, identified those items
priced below the Agri Stats average as ``opportunities'' to impose
price increases.
2. Agri Stats Live Production Reports
41. Agri Stats live production books comprise reports that provide
facility-by-facility information on the production levels of each
participating processor. Processors receive comprehensive reports that
include all competitors, as well as more targeted reports that provide
information about a select set of competing facilities.
42. Consider the following excerpt from the broiler chicken live
production book for February 2013, which provides production
information about facilities that process birds weighing more than 7.5
pounds.\19\ Agri Stats provides each processor receiving this report
with a list of each facility--by company and location--processing that
size bird (Figure 4):
---------------------------------------------------------------------------
\19\ Processors use of birds of different sizes to produce
different products. For example, a processor producing chicken
breasts for sale to quick service resaurants may use smaller birds
to make the ideal sized product for a chicken breast sandwich, while
a company producing chicken tenders from breast meat might opt for
using a larger size cut of breast meat.
---------------------------------------------------------------------------
BILLING CODE 4410-11-P
[[Page 34518]]
[GRAPHIC] [TIFF OMITTED] TN05JN26.175
Figure 4
43. The live production book then provides detailed information
about the growing of poultry or livestock for each contributor, such as
the breeder chick placements (also known as ``pullets'') associated
with each broiler chicken processing facility.\20\ Figure 5 is an
excerpt from a report titled ``Monthly Breeder Chick Placement by
Plant.'' In this report, each processing facility is represented by a
line number (``LIN'') and the female (a.1.) and male (b.1.) breeder
chick placements are stated for each facility. The reports compare
breeder chick placements at each facility to the previous year's
placements (Fig. 5 at (a.2) and (b.2)).
---------------------------------------------------------------------------
\20\ Breeder chicks are called ``pullets'' when referring to
broiler hens and ``breeder poults'' when referring to turkey hens.
---------------------------------------------------------------------------
[[Page 34519]]
[GRAPHIC] [TIFF OMITTED] TN05JN26.176
BILLING CODE 4410-11-C
Figure 5
44. In addition to facility-level information, the report provides
industry-wide figures, including the total number of breeder chick
placements and how those numbers compare with the previous year.
Specifically, the report discloses that placements have increased by
45.80% for female chicks and by 45.37% for male chicks (Fig. 5, line 34
at (a) and (b)). Unlike public data sources that rely on voluntary
reporting, the breeder chick placement information here is
comprehensive (all subscribers contribute) and is available for
different-sized birds so processors can track whether processors are
expanding production in certain sales channels.
45. As Agri Stats has stated in its live production customer manual
(Fig. 6), the purpose of providing breeder chick information is to
``help forecast Broilers & pounds produced for future months.''
[GRAPHIC] [TIFF OMITTED] TN05JN26.177
[[Page 34520]]
Figure 6
46. Breeder chicks begin laying eggs at about six months after
placement. When a broiler chicken processor is planning to expand,
typically it needs to begin increasing the size of the hatchery supply
flock by increasing breeder chick placements approximately six months
in advance. Monitoring breeder chick placements allows processors to
forecast the future production plans of competitors.
47. Joe Sanderson, the former CEO of Sanderson Farms, specifically
referred to tracking ``pullet placements'' in Agri Stats reports when
he assured investors that Sanderson had no plans to increase production
because his competitors were not doing so. He also explained that he
could track production in terms of bird weight across sales channels
(big bird, small bird, track pack) using Agri Stats:
I think the increase in Agri Stats that showed up in 2009 in
weight, was primarily in the tray pac[k] region. There was a nominal
increase in the big bird deboning but it was very slight. The tray
pac[k] region increased more than anyone else, but it has not
changed in about six months now and I think that has topped out.
Small bird hasn't increased any. I don't really anticipate very much
movement in weights any more in 2010. I don't see any more head
until we see some improvement in pricing, so I think head count is
going to run close to what we have.\21\
---------------------------------------------------------------------------
\21\ Yet another report, the Operations Profits Report, allows
processors to track facility-by-facility and ``dock'' prices of
their competitors. The dock price refers to the composite amount a
processor receives for a processed chicken, turkey, or hog. This
number is calculated by adding up the amount received for each part
of the animal that is sold.
---------------------------------------------------------------------------
B. Agri Stats Sales Consulting
48. In addition to providing processors with written reports, Agri
Stats meets with individual subscribers multiple times a year to
discuss how to use the information that Agri Stats collects.
Frequently, Agri Stats reviews price ``opportunities'' with processors
like those discussed above and identifies items and customers to target
for price increases. Agri Stats account managers prepare detailed
presentations for their subscribers highlighting the additional revenue
they could make by increasing prices.
49. Agri Stats has touted its ability to identify opportunities to
raise prices as a selling point. When one processor contemplated
unsubscribing from Agri Stats' bacon report, for example, Agri Stats
employees encouraged it to continue subscribing by pointing to $100,000
in additional revenue the processor could make by raising prices on
particular bacon products.
50. The consulting sessions provide an opportunity to directly
advise participants on raising prices to boost industry profits. The
in-person consulting sessions also provide processors with an
opportunity to discuss with Agri Stats account managers information
that might not be included in Agri Stats reports, but nevertheless
might be gleaned from the detailed information Agri Stats receives
about the operations and sales of nearly every major participant in the
industries in which it operates.
V. Processors Use the Agri Stats Information-Sharing Scheme To
Increases Prices and Restrict the Supply of Meat
51. With Agri Stats' encouragement and facilitation, Agri Stats'
processor-subscribers use the information collected and distributed by
Agri Stats to increase and stabilize prices and reduce the supply of
meat.
A. Processors Use Information Shared Through Agri Stats Reports and
Consulting To Raise Prices
52. By enabling and encouraging processors to focus on increasing
prices on items priced below their competitors, Agri Stats helps
processors boost sales margins, thereby increasing profits without
lowering prices to take sales from competitors. The data allows
processors to profitably raise prices on relatively low-priced products
with greater confidence that they will not lose sales to lower priced
rivals. The examples below illustrate how processors used Agri Stats
reports to stabilize and raise prices.
1. Tyson Used Agri Stats Sales Data To Increase Chicken Prices
53. In January 2010, Tyson embarked on a plan to use competitor
data exchanged through Agri Stats to increase prices in its fresh
chicken business, a project that would potentially impact more than
3,000 retail outlets. Tyson deployed Agri Stats' weekly sales report--
data that was often less than a week old--to its sales force for use in
negotiating prices. Tyson management told employees to aggressively
push price increases and ``[h]ave price courage.''
54. Tyson focused on raising prices on fresh tray pack items
(chicken packaged to sell predominately at grocery stores) to meet the
national average as reported by Agri Stats. Tyson tracked the
``variance'' between Tyson's average price and the national average
price, and circulated a chart showing the company's progress at
reducing the variance. As shown below (Fig. 7), the bottom flat line
represents the variance of -3.8 cents per pound (when Tyson began its
pricing initiative) while the top flat line represents targeted ``zero
variance.'' Each week, Tyson used Agri Stats data to track the variance
between its average price for this category of products and the
industry average. The chart shows how Tyson, by increasing prices,
gradually narrowed the variance and brought its prices in line with the
industry average price.
BILLING CODE 4410-11-P
[[Page 34521]]
[GRAPHIC] [TIFF OMITTED] TN05JN26.178
Figure 7
55. Tyson's price increases were not dictated by independent market
forces that affected costs or supply. Rather, the Agri Stats reports,
by providing averages and the top 25th percentile, informed Tyson that
it could increase prices on items that its competitors already sold at
higher prices. That is what Tyson did.
56. At the same time, Tyson's competitors were also raising prices,
prompting one Tyson executive to explain the difficulty in closing the
variance: ``Overall we improved in sales price in several categories vs
the previous week but it is obvious that our competition also made
improvement. As we have discussed[,] we not only have to increase our
price but we also have to out run our competitors['] improvements.''
57. Tyson and its broiler chicken competitors could focus on
raising prices because they understood that processors did not use Agri
Stats data to lower prices. A Tyson sales executive stated that he
instructed his team to ``stay ahead'' of other broiler processors'
price increases and that he never considered the possibility that
competitors would respond by reducing their prices to take market share
away from Tyson. From January 2010 to May 2012, Tyson raised the
average price of tray pack items by over 20% and continued raising
prices thereafter.
2. Sanderson Farms Used Agri Stats Sales Data To Increase Chicken
Prices
58. Sanderson Farms used Agri Stats reports in a similar manner.
For example, in December 2012, an executive circulated an email stating
that the company had secured more than $18 million in price increases
over the previous six months while noting, ``We are not done.'' He
directed his sales team to continue renegotiating with open-ended
contract customers to increase prices, explaining, ``Start with wing
help and then address any other parts that may be deficient. . . . All
customers under contract will also be asked for help on wings and any
other items deficient in Agri Stats.''
59. The Sanderson executive attached a spreadsheet (Fig. 8)
identifying each customer, the contract date, the difference between
current pricing and Agri Stats pricing, the status of any negotiations,
and the amount of additional revenue secured or targeted for that
customer. The spreadsheet ranks customers by the variance between
Sanderson's prices and the Agri Stats price, and demonstrates how the
company targeted for price increases those customers who had been
receiving prices below Agri Stats prices. The customers include some of
most well-known supermarkets in the United States.
[[Page 34522]]
[GRAPHIC] [TIFF OMITTED] TN05JN26.179
Figure 8 <SUP>22</SUP>
---------------------------------------------------------------------------
\22\ The United States has obscured customer names in this
document.
---------------------------------------------------------------------------
60. These examples from Tyson and Sanderson reflect a broader
trend. As Tyson and Sanderson were raising prices, industry-wide profit
margins increased dramatically for broiler chicken processors in 2013
and 2014, according to Agri Stats data.
3. Cargill Used Agri Stats Sales Data To Increase Turkey Prices
61. Turkey processors used Agri Stats in a similar manner. In a
2016 presentation slide entitled ``Why AgriStats & Strategic Pricing?''
(Fig. 9), Cargill explained that Agri Stats provides ``insight into
competitor's pricing'' and identifies ``what the market will bear.''
The ``goal'' of Agri Stats and Strategic Pricing is ``forward motion,''
represented by figures raising a curve.
[[Page 34523]]
[GRAPHIC] [TIFF OMITTED] TN05JN26.180
Figure 9
62. Consistent with the figures increasing the price curve, Cargill
used Agri Stats data to raise prices. Beginning in late 2013, Cargill
began relying on competitor data exchanged through Agri Stats to
``increase [its] Benchmarking focus.'' As shown below (Fig. 10),
Cargill increased its prices from three cents below the national
average to well above the national average as measured by Agri Stats'
net dock price. It would maintain those increased prices at least into
2016.
[[Page 34524]]
[GRAPHIC] [TIFF OMITTED] TN05JN26.181
BILLING CODE 4410-11-C
Figure 10
4. Butterball Used Agri Stats Sales Data To Increase Turkey Prices
63. Butterball likewise used Agri Stats sales data to increase
turkey prices. In April 2014, Butterball sales executives and employees
sent around Agri Stats sales data noting ``poor results versus the
competition.'' These ``poor results'' were turkey products that were
priced below the industry average. A Butterball vice president sent a
list of ``Product Group/SKU[s]'' identifying these products. Another
vice president noted that ``[m]arkets are at historic highs'' and
Butterball needed to take advantage of the higher prices ``everywhere
we can.''
64. In response, a Butterball sales employee stated that Butterball
had increased or would increase targeted turkey product prices for a
number of large food distributors.
65. While Butterball and Cargill were increasing turkey prices,
market-wide turkey prices increased in a way that cannot be explained
by underlying costs of production. In fact, costs actually decreased
during this period according to Agri Stats data. Yet, consistent with
Agri Stats' advice, processors raised prices. According to Agri Stats'
own records, turkey processors were able to increase margins by more
than 300% between 2013 and 2016 and achieved historic profitability.
5. JBS Used Agri Stats Sales Data To Increase Pork Prices
66. Pork processors also used Agri Stats sales data to increase
prices. Referring to its focus on Agri Stats pricing data as ``margin-
based'' decision-making, JBS regularly used Agri Stats to monitor
prices and pursue price increases on items sold below the national
average price. For example, in August 2010, a JBS executive instructed
his sales team to identify SKUs that ``are LOW relative to the
industry.'' A JBS employee promptly identified ten products to consider
for price increases based on Agri Stats data and suggested in several
cases that JBS seek further guidance from Agri Stats on pricing. Here
again, JBS's efforts were part of a broader trend. Profit margins for
pork packers as measured by Agri Stats grew strikingly--over 50% from
2010 to 2011.
B. Agri Stats' Give-to-Get Policy Makes It Easier for Processors To
Increase Prices Due to Information Asymmetry
67. Processors could increase prices so readily, in part, because
meat purchasers such as grocery stores and restaurants do not have
access to the same information. Agri Stats boasts that no other service
offers anything close to what it provides to its subscribers. As one
agricultural economist and former EMI employee admitted, ``Agri Stats .
. . [has] access to information about production costs, processes,
yields, and structural information that no other economist or analyst
can obtain.'' Agri Stats' President stated that ``Agri Stats['] biggest
strength is that there are no other companies that do [what] we do.''
Its processor co-conspirators agree; one Tyson executive stated that no
other service provides this kind of comprehensive information regarding
sales data. Yet Agri Stats has refused to make the competitively
sensitive information it readily distributes among competing processors
available to purchasers.
68. This information asymmetry contributes to processors' ability
to ratchet prices upward. Each processor can identify which of its
products are
[[Page 34525]]
priced below its competitors' and raise prices on those products with
less concern about price competition. By contrast, purchasers cannot
use the same information to identify when they are paying comparatively
high prices because Agri Stats refuses to sell them its reports. Other
statistical services available to the public (either for free or by
subscription) are not substitutes for the data shared between the
processors via Agri Stats because no other service has the same access
to processors' internal ledgers.
69. In a competitive market, a processor may find it advantageous
to lower its prices, increase its sales, and thereby grow its market
share. But Agri Stats reports do not tell a processor how much
additional profit it could make by selling more meat at a lower price
than its rivals. One executive at pork processor Smithfield testified
that he did not know of a single instance in which Smithfield used Agri
Stats sales reports to decrease price. A Tyson sales executive
similarly testified that he was unaware of a single instance in which
his broiler sales team used Agri Stats information to reduce prices.
70. Encouraging price competition runs counter to Agri Stats' goal
of increasing the profitability of the industry as a whole. Agri Stats
has stated that its ``paradigm'' is to ``increase [the] profitability
of all participants.'' Thus, Agri Stats enables and encourages
participants to ``chas[e] price'' and boost collective industry
profits, not compete to maximize the individual profits of the
respective processors.
71. Agri Stats' ``rankings'' are a case in point. In its sales
reports, for example, Agri Stats ranks processors based on how high
their prices are. The processor charging the highest prices is ranked
first, and the processor charging the least is ranked last, regardless
of total profits. These rankings, which depend on competitively
sensitive information collected by Agri Stats, push markets toward
anticompetitive pricing by promoting increased margins.
72. Certain processors have even used Agri Stats' rankings in the
sales reports to give bonuses for sales staff. These employees are
therefore incentivized to sell less volume at higher prices rather than
higher volume at lower prices, which results in higher prices for
consumers.
C. Agri Stats Enables Processors To Restrict Supply
73. Price and output are interrelated. Generally, when demand stays
constant, decreased supply of a product will increase its price.
Broiler chicken, pork, and turkey processors have used competitively
sensitive information exchanged through Agri Stats to restrict supply,
which also leads to stabilized and inflated prices.
74. Agri Stats offers more comprehensive, detailed information than
publicly available sources because Agri Stats collects data that comes
directly from the internal ledgers of the processors. The information
also covers multiple aspects of the production process, and includes
metrics that indicate current inventories and future production.
75. By using Agri Stats to monitor each other's production plans,
processors are more easily able to coordinate supply restraints and
confidently ensure that no one is attempting to increase production and
expand market share. Sanderson Farms and Pilgrim's, for example, both
explicitly discussed making broiler supply decisions based on Agri
Stats data during earnings calls.
76. In the broiler chicken and turkey industries, for example, Agri
Stats reports the number of ``breeder'' chicks placed at the breeder
farms affiliated with each processor in its live production reports.
The time from breeder chick placement to meat delivery is highly
regular, and, unsurprisingly, the number of breeder chicks placed
closely predicts final output. As mentioned above, the Agri Stats user
manual for broiler processors states that Agri Stats collects and
publishes breeder data to allow subscribers to ``help forecast Broilers
& pounds produced for future months.'' The Agri Stats user manual for
turkey processors contains a similar statement. When processors know
the future production plans of their competitors, they can more easily
coordinate supply restraints and anticipate when price increases will
be successful.
77. Agri Stats reports on many other supply metrics. Processors can
monitor broiler chicken output through hatchery utilization (i.e., the
percentage of incubator space in a hatchery that is filled with eggs),
density of broiler housing, average flock size, and average age at time
of slaughter. Even metrics that may not obviously implicate supply to a
layperson can reveal competitively sensitive information. For example,
processors use certain metrics in Agri Stats reports to estimate a
company's average bird weight, which is one of the variables processors
use to increase or decrease total output. Sanderson Farms specifically
mentioned monitoring competitor bird weights in a May 2013 investor
call.
78. Agri Stats turkey reports included similar metrics that allowed
competitors to track output, including breeder chicks placed, average
flock size, bird age, bird weight, density of turkey breeder housing,
hatchery utilization, and egg set capacity per week. Butterball, for
example, deanonymized the Agri Stats data to track specific
competitors' output trends.
79. The pork reports included metrics allowing processors to
estimate the total number of pigs slaughtered and total pounds produced
at competing facilities. These metrics include ``head killed per
operating hour,'' the number of shifts operated, the number of hours
per week each employee on a shift works, and live pig weight.
80. In the broiler chicken market, Agri Stats and EMI also
distributed time-sensitive information regarding current inventories
through a ``Freezer Inventory Report.'' This weekly report shows the
aggregate pounds of various broiler chicken cuts in processors' on-site
freezers. An example is shown in Figure 11.
[[Page 34526]]
[GRAPHIC] [TIFF OMITTED] TN05JN26.182
Figure 11
81. Agri Stats advised processors that freezer inventory closely
correlates with price, and processors understood that connection.
Shortly after receiving a March 2011 Freezer Inventory Report showing
six weeks of inventory reductions, Mountaire Farms' CEO wrote, ``Tell
those sales people to raise sales prices . . . . [T]he tide has turned
and our sales people must demand more and not be apologetic . . . .''
82. Although EMI produced and audited the Freezer Inventory Report,
it branded the report with the Agri Stats logo, referred to it as the
``Agri Stats Weekly Inventory Report'' and made the report available
only to processors.
83. Agri Stats provided pork processors with an ``Export Sales''
report as another way to monitor supply. Pork processors have regularly
exploited the export market to constrain domestic supply, even when
export sales result in a loss, because restraining supply significantly
increases domestic pork prices. A Smithfield economist estimated that a
1% reduction (or ``disappearance'') in domestic supply would lead to a
3% to 5% domestic price increase.
84. The same Smithfield economist was asked in an internal email,
``[W]hy do we want to go to the export at a loss?'' He replied, ``Very
simple: More exports translate to higher meat value [domestically].''
This statement makes sense only if Smithfield was confident that no
other processor would capture lost domestic sales. Smithfield had
reason to be confident. For example, Seaboard wrote in a weekly update
in 2012: ``We continue to chase all the export opportunities we can
find to keep excess product off the US market.'' Tyson's CEO made
similar comments as well.
85. The Agri Stats export sales reports allowed pork processors to
track the quantity of exports and pricing in non-U.S. countries for
identified pork items. Pork processors, including Tyson, Smithfield,
and Cargill, monitored fluctuations in the volume of exported pork
based on pork cut and country and asked Agri Stats to perform various
custom analyses on exports.
86. Just as with prices, Agri Stats has enabled and encouraged
processors to maintain output discipline. Agri Stats routinely sent
analyses to processors (sometimes through EMI) encouraging them to
``exercise restraint.'' For example, in September 2014, an Agri Stats
vice president circulated a presentation to various broiler companies,
including Wayne Farms, Pilgrim's, Perdue, and Tyson, commenting that
``[t]his summer every week sets a record for economic returns for the
U.S. broiler industry.'' The vice president reminded the processors
that ``the prospects for coming months remain extremely favorable''
because ``[b]reeder placements are not increasing anywhere near enough
to cause a surplus of birds through at least the first half of 2015.''
He called the numbers ``stunning results for the industry.'' The vice
president effusively praised processors for maintaining ``control''
over production levels, signaling that they should restrain output to
continue ``the amazing times in the chicken business.'' Agri Stats
reports provided further assurance that each processor could restrict
its own output by monitoring competitor output through the reports Agri
Stats provided.
D. Agri Stats Enables Competitors To Exchange Plant and Company Level
Information
1. Processors Exchange and Deanonymize Agri Stats Reports
87. Agri Stats reports not only enable the exchange of
competitively sensitive price and supply metrics, they also make it
easier for processors to
[[Page 34527]]
exchange other facility-level or company-level information directly--a
practice Agri Stats enabled and knew occurred.
88. Many Agri Stats reports provide disaggregated, facility-level
data for each participating facility. The inclusion of comparable,
facility-level data makes the sharing of competitively sensitive
information simpler and more likely to be anticompetitive.
89. Although Agri Stats ostensibly anonymizes the data to conceal
each company's and facility's identity, Agri Stats knows that
processors are able to deanonymize the reports. Once deanonymized, the
reports allow processors to monitor specific competitors' output, cost,
and price metrics even more closely. Processors can deanonymize Agri
Stats reports without their competitors' assistance. Some metrics
contained in Agri Stats reports are so detailed that deanonymization
becomes fairly straightforward. A Butterball employee once boasted, ``I
can pick the companies for rankings with 100% certainty'' using
information found in Agri Stats' turkey Bottomline Report.
90. Once a facility is identified--for example, based on a unique
feature related to its operations or product offerings that industry
insiders would recognize--the plant can be tracked across different
reports using that identifying metric. Tyson's Director of Competitive
Intelligence and Analysis testified that once he was able to identify
facilities ``on the operations profit page, I can go back through the
other books to identify their data elsewhere. Agristats often takes
data to 4 decimal places which allows that number to be identified
somewhere else in the books (live, plant, processing mix, sales, etc. .
.).'' Similarly, a Pilgrim's employee who previously worked at Agri
Stats informed a work colleague that information in the Operations
Profits book could help identify particular processors.
91. Deanonymization became a regular part of many processors'
analyses of Agri Stats reports. A Mountaire employee regularly
deanonymized Agri Stats' broiler chicken reports, considering it part
of her official job duties. Other chicken processors such as Tyson,
Pilgrim's, Perdue, Sanderson Farms, Wayne Farms, Amick Farms, Koch
Foods, and Case Farms have deanonymized various Agri Stats broiler
chicken reports.
92. Tyson held regular internal meetings in which its employees
analyzed deanonymized Agri Stats pricing information about certain cuts
of pork from its competitors' facilities. Dubbed the ``naming
process,'' Tyson's process for deanonymizing pork facilities involved
multiple employees from different departments. Besides Tyson, Seaboard/
Triumph and Smithfield deanonymized various Agri Stats pork reports.
93. Cargill tracked its competitors' pricing based on the turkey
Retail and Deli report provided by Agri Stats. A December 2015
spreadsheet from Cargill (Fig. 12) showed the company tracking the
invoice prices and net sales prices of its largest turkey competitors--
Butterball (``BB''), Jennie-O (``JOTS''), Cooper Farms, and Perdue--in
Agri Stats reports (referred to below as ``A/S''):
[GRAPHIC] [TIFF OMITTED] TN05JN26.183
Figure 12
94. Like Cargill, Butterball, Jennie-O, Cooper Farms, Perdue, and
Farbest also deanonymized various Agri Stats turkey reports.
95. By including a list of contributing facilities at the beginning
of each report, Agri Stats makes the deanonymization process easier. At
least one subscriber told Agri Stats that it would stop subscribing to
certain reports if the company did not list participating companies and
facilities on those reports.
96. Processors informed Agri Stats personnel over the years that
several of its subscribers deanonymized its reports. Nevertheless, Agri
Stats took no action to stop this practice and continued to provide the
same reports and consulting services.
2. Agri Stats Employees Directly Facilitate the Exchange of Competitor
Data
97. Agri Stats employees also served as more direct conduits for
the exchange of competitively sensitive information. For example, in
2016, a Cargill employee emailed its account manager at Agri Stats,
relaying that certain turkey purchasers complained that Cargill was
overpricing ground turkey compared to
[[Page 34528]]
its competitors. The Cargill employee explained that this conflicted
with her understanding of the Agri Stats data.
98. The Agri Stats account manager not only confirmed Cargill's
interpretation, but she also provided specific pricing information for
each grocery store at issue:
On Wal-Mart 85%--you are about 20 cents higher than other
primary supplier but 11 cents under another supplier with less
volume. 93% is well under the leading supplier by 27 cents. Ground
white is also well under other suppliers ranging from 7 cents to
under 65 cents under.
HEB 85%--you are 24 cents higher than other supplier.
Wakefern 85%--you are 38 and 32 cents higher than other 2
suppliers. 93% looks right in line. Ground white is in line with 1
other supplier but under 2 other suppliers with less volume by 45
cents.
99. By providing Cargill with detailed information about
competitors' prices for specific purchasers, Agri Stats provided
Cargill with an advantage that was unavailable to Cargill's customers.
100. In another incident, the same Agri Stats account manager and
Cargill employee referenced ``ad hoc comments'' made by the Agri Stats
employee during an onsite visit before asking, ``If we set a goal to be
3[cent] above Natl Ave--will we be beating our key competitors? Can we
spot check this with you say 1/quarter to ensure we're focused on the
right pricing improvements?''
101. The Agri Stats employee responded with a list of product
categories and made specific recommendations for how much Cargill
should raise prices. For example, the Agri Stats employee stated ``Food
Service[:] Cargill $116k fav[orable]--most opportunity here: ranking
economic impact you come out 7th. The #1 company is $4.7m fav. I would
shoot for being $2.5m fav which would put you competitive with who you
are chasing in food service.''
102. These individual interactions align with Agri Stats' mission
to increase processors' profitability through increased prices and
reduced output. Despite managing the exchange of sensitive information
between competitors, Agri Stats has no antitrust compliance program. It
does not conduct antitrust training for its employees, despite
regularly consulting with direct competitors.
VI. Agri Stats Entered Into Anticompetitive Agreements To Share
Competitively Sensitive Information With Processors in the Broiler
Chicken, Pork, and Turkey Industries
103. Agri Stats agreed with the broiler chicken, pork, and turkey
processors identified in paragraph 14 above to exchange competitively
sensitive information and encouraged processors to use it for the
anticompetitive purposes of stabilizing and raising prices and
restricting supply. As part of the conspiracy, processors used Agri
Stats to exchange competitively sensitive information. The structure of
the industries, nature of the information shared, market power of the
subscribers, and purpose and effect of the information-sharing scheme
confirm that each of these agreements unreasonably restrains trade.
A. Agri Stats and Its Co-Conspirators Agreed To Share Competitively
Sensitive Information
104. In each of the broiler chicken, pork, and turkey markets, the
processors agreed with Agri Stats and with each other to pay Agri Stats
to manage the exchange of competitively sensitive information among the
processors. The Agri Stats broiler chicken information-exchange
conspiracy remains ongoing. Agri Stats paused its pork and turkey
reporting around late 2019, but Agri Stats wants to resume the
reporting in the future.
105. Each processor agreed to provide current, competitively
sensitive information to its competitors through Agri Stats, knowing it
would receive reports that included current, competitively sensitive
information of its competitors in return. By entering into an agreement
with Agri Stats, each processor also agreed with competing processors
that subscribed to Agri Stats to exchange competitively sensitive
information in the form Agri Stats provided. Each processor ratified
these agreements each time it submitted data to Agri Stats. Tyson
internally referred to the decision to participate in Agri Stats
broiler reports as ``support[ing] an industry effort'' (emphasis
added).
106. Agri Stats regularly listed current subscribers in
presentations when pitching Agri Stats' services to new and existing
clients, leaving no doubt about who was participating in the
information-exchange scheme and warning them that their competitors
would enjoy an advantage if they demurred. New subscribers understood
that they would provide competitively sensitive information to current
subscribers and receive competitively sensitive information from these
current subscribers in return.
107. Agri Stats' ``give-to-get'' policy reinforced the collective
nature of the agreement, and the publication of the participants at the
front of every report allowed Agri Stats' subscriber customers to
monitor the conspiracy and ensure that if they were providing
competitively sensitive information, their competitors were doing so as
well. The processors in each of the broiler chicken, pork, and turkey
industries understood that the greater the participation in the Agri
Stats scheme, the more useful the scheme would become.
B. The Nature of the Information Collected and Distributed by Agri
Stats Has Facilitated the Suppression of Competition Among Processors
108. Agri Stats compiles highly sensitive competitive information
that processors would not share directly and redistributes that
information in ways that allow processors participating in the scheme
to know where they could stabilize and raise prices and when they could
restrict production.
109. The information exchanges operated by Agri Stats share several
characteristics that enable processors to suppress competition:
a. Sensitivity: Agri Stats reports competitively sensitive price,
output, and cost data that is not otherwise available to processors.
Processors can and do deanonymize certain information and link data to
particular competitors.
b. Timeliness: Agri Stats' information is current. Its weekly
reports generally supply information from the prior week, while its
monthly reports include data from the past one-to-two months. Some
information is forward-looking and predictive.
c. Detail: Agri Stats provides highly detailed information that
allows processors to dampen competition. Agri Stats reports cost and
production information on a facility-by-facility and company-by-company
basis, allowing processors a detailed look at their competitors'
operations. Agri Stats provides price rankings as well as average and
top quartile sales prices for products identified at the near-SKU
level, allowing processors to see how their sales compare to market
prices on a product-by-product basis.
d. Asymmetry: Agri Stats prohibits non-processors from purchasing
Agri Stats' information, creating an information asymmetry between
processors and purchasers that contributes to higher prices.
C. The Market Power of Agri Stats' Co-Conspirators
110. Collectively, the participating broiler processors (listed in
paragraph 14) have market power over the sale of broiler chicken. They
have accounted for at least 90% of the broiler chicken market from 2008
to the present. Agri
[[Page 34529]]
Stats itself has repeatedly estimated that its broiler chicken
subscribers made up 98% of the broiler chicken market. Collectively,
Agri Stats' broiler processor co-conspirators have the power to
restrict output and increase prices in the broiler chicken market.
111. Collectively, the participating pork processers (listed in
paragraph 14) had market power over the sale of pork. They have
accounted for at least 80% of the pork market from 2008 to 2019, the
time period during which Agri Stats was still issuing pork reports.
During this period, Agri Stats repeatedly claimed that it covered 90%
of the pork market as measured by number of pigs processed.
Collectively, Agri Stats' pork co-conspirators had the market power to
restrict output and increase prices in the pork market when Agri Stats
was still issuing pork reports. Those same pork processors would
collectively have market power today if they resumed their information
exchange through Agri Stats.
112. Collectively, the participating turkey processors (listed in
paragraph 14) had market power in the market for the sale of turkey.
They have accounted for approximately 90% of the turkey market from at
least 2008 until 2018.\23\ During this period, Agri Stats repeatedly
claimed that it covered 95% of the turkey market. Collectively, Agri
Stats' turkey co-conspirators had the power to restrict output and
increase prices in the turkey market. Those same turkey processors
would collectively have market power today if they resumed their
information exchange through Agri Stats.
---------------------------------------------------------------------------
\23\ Agri Stats continued producing turkery reports in 2019, but
certain large turkey processors no longer participated.
---------------------------------------------------------------------------
D. Agri Stats' Conduct Has the Purpose and Effect of Suppressing
Competition, Increasing Prices, and Limiting Supply
113. Agri Stats understands that its reports have enabled broiler
chicken, pork, and turkey processors to stabilize and increase prices
and reduce supply. Agri Stats regularly identifies ``opportunities''
for processors to raise prices or reduce supply by collecting and
analyzing the competitively sensitive information provided by
processors. Agri Stats refuses to offer its reports to processors'
customers.
114. Agri Stats seeks to profit from its anticompetitive
information exchanges. Its customers want a service that will allow
them to increase profitability through anticompetitive pricing and
output decisions. Thus, Agri Stats has knowingly created a product that
allows its subscribers to do just that.
115. By participating in these anticompetitive information
exchanges, Agri Stats and its processor co-conspirators have harmed and
continue to harm the competitive process in the broiler chicken, pork,
and turkey markets. Rather than allowing the ordinary give and take of
the marketplace to determine price and output, Agri Stats and its co-
conspirators have distorted each alleged market by asymmetrically
sharing competitively sensitive information. In each market, the
processor-subscribers used Agri Stats information to stabilize and
increase prices or reduce supply or both.
116. Even standing alone, Agri Stats' agreements with processors
allowed them to suppress competition among them. The information
provided to processors allowed them to pursue strategies that they
likely would not have absent the agreements. Each participating
processor could more closely align its prices and output with those of
its competitors, harm the competitive process, distort the bargaining
and price-setting mechanisms, and suppress competition. A key purpose
of Agri Stats' reports is to enable processors to suppress competition,
stabilize and increase prices, and reduce supply.
117. Thus, the effects, probable and actual, of Agri Stats'
information-exchange schemes are to stabilize and increase prices,
decrease supply, or both, in the broiler chicken, pork, and turkey
markets.
118. There is no legitimate procompetitive justification for Agri
Stats' conduct.
VII. Relevant Markets
119. Agri Stats has orchestrated an anticompetitive information-
sharing scheme in at least three relevant markets: (i) broiler chicken
sold in the United States, (ii) pork sold in the United States, and
(iii) turkey sold in the United States.
A. The Sale of Broiler Chicken in the United States Is a Relevant
Market
120. The sale of broiler chicken meat in the United States is a
relevant market. Broiler chicken refers to broiler chicken meat that
comes in a variety of forms, fresh or frozen.
121. Academic estimates show that broiler chicken demand elasticity
is low, indicating that there are no close economic substitutes for
chicken. Academic estimates for cross-elasticity indicate that pork,
turkey, and beef are not close substitutes for chicken.
122. Consumers find chicken to be distinct from other proteins.
Most consumers view chicken as healthier and cheaper than red meats
like beef and pork, and they eat chicken in different contexts than
turkey, which is generally consumed around the holidays, in ground
form, and as deli meat. Turkey is not served in restaurants as often as
chicken--a basic fact that turkey processors like Cooper Farms have
noted.
123. The broiler chicken conspirators' behavior reflects that they
considered the sale of broiler chicken meat to be a relevant market.
Agri Stats has produced standard reports for broiler chicken processors
to learn highly granular information about their competitors'
operations and sales. Agri Stats and EMI have developed and marketed
specific services targeted to broiler chicken processors that are not
available, for example, to the processors of other meats like turkey.
Agri Stats frequently has provided the combined market share for
broiler chicken processors that participate in its reports, indicating
that Agri Stats believes the sale of broiler chicken is a market.
124. Large protein purchasers have dedicated procurement personnel
for chicken (in its various forms). Processors that operate in multiple
protein industries, like Tyson, JBS (Pilgrim's), and Perdue, have
separate divisions for the sale of chicken. Grocery stores group
chicken products separately from pork, turkey, and beef products,
reflecting that consumers view the proteins differently.
125. Industry publications and analysts like WATT Poultry consider
broiler chicken meat to be a distinct economic unit. Broiler processors
and industry publications, including Agri Stats, consider whole bird
composite prices to be relevant metrics when assessing prices and
demand for broiler chicken.
126. The market for broiler chicken meat is concentrated. The top
three processors, Tyson, Pilgrim's, and Sanderson-Wayne, constitute
over 50% of the market as measured in pounds of broiler chicken
processed. The top ten firms account for 80% of the market. A 2012
economic analysis prepared for broiler chicken processors described the
broiler chicken market as ``highly concentrated.''
127. There are high barriers to becoming a broiler processor. The
start-up capital necessary to compete with today's broiler chicken
processors would be substantial. Broiler chicken processors have large
economies of scale, utilizing large and expensive production
facilities. For example, Tyson estimated the construction costs of one
new broiler chicken complex to
[[Page 34530]]
be $320 million in 2017. Without those economies of scale, it would be
extremely difficult to compete. Broiler chicken processors tend to be
vertically integrated, meaning a single company controls most aspects
of the supply chain. To compete effectively, a new entrant would need
hundreds of millions of dollars, substantial ``know how,'' and an
opportunity to negotiate with large broiler chicken purchasers. A new
company fitting these criteria will be rare.
128. Broiler chicken is a commodity. The broiler chicken meat of
one processor, like Tyson, is highly interchangeable with--if even
distinguishable from--the broiler chicken meat of another processor,
like Pilgrim's. In commodity markets, firms compete primarily on price,
as opposed to quality or some other form of product differentiation.
129. In sum, the broiler chicken market has characteristics that
make information exchanges more likely to be anticompetitive. The
broiler chicken market has relatively few competitors. Broiler chicken
is a fungible, commodity product subject to inelastic demand. The
barriers to entry in the broiler chicken market are very high.
B. The Sale of Pork in the United States Is a Relevant Market
130. The sale of pork in the United States is a relevant market.
Pork refers to pig meat that can come in a variety of forms, including
fresh or frozen.
131. Pork does not have any close economic substitutes. Academic
estimates show that pork demand elasticity is low, indicating that
there are no close economic substitutes for pork. Academic estimates
for cross-elasticity indicate that chicken, turkey, and beef are not
close substitutes for pork.
132. Consumers find pork to be distinct from other proteins.
Consumers purchase less pork than chicken or beef and tend to value
pork more for its taste than its health benefits or cost. Pork
consumption has remained mostly flat since the 1970s.
133. The pork conspirators' behavior shows that they considered
pork to be a relevant market. Agri Stats has produced standard reports
to enable pork processors to learn highly granular information about
their competitors' operations and sales. Agri Stats and EMI have
developed and marketed specific services targeted to pork processors
that are not available to, for example, the producers of other meats
like beef. Agri Stats frequently has provided the market shares of the
pork processors that subscribe to its services, indicating that Agri
Stats believes it is a distinct market. Pork processors frequently have
referred to a ``pork market.'' \24\
---------------------------------------------------------------------------
\24\ For example, Tyson CEO Donnie Smith stated in a 2016
earnings call: ``The wholesale pork market has moved up and chicken
has not moved up near as fast as the wholesale pork market.''
---------------------------------------------------------------------------
134. Large protein purchasers have dedicated procurement personnel
for pork. Processors that operate in multiple protein industries, like
Tyson, JBS, and Perdue, have separate divisions for the sale of pork.
Grocery stores group pork products separately from chicken, turkey, and
beef products, reflecting that consumers view the proteins differently.
135. Pork processors and industry publications, including Agri
Stats, view the pork ``cutout'' value to be a relevant metric when
assessing prices and demand for pork. The pork cutout value (often
referred to as the Pork Carcass Cutout) indicates the average value of
a hog carcass based on the average prices received for the various cuts
of pork produced during a given period of time.
136. Pork is a concentrated market. The top three pork processors,
Smithfield, JBS, and Tyson, make up over 60% of the market as measured
by slaughter capacity.\25\ The top ten processors make up nearly 90% of
the market. Pork processor Triumph stated internally that ``the US pork
processing industry is highly concentrated, with the top ten processors
representing over 88.3% of the total federally inspected industry
capacity as of late 2010.'' Since then, the industry has become more
concentrated.
---------------------------------------------------------------------------
\25\ Slaughter capacity is a typical method of measuring pork
processor market shares.
---------------------------------------------------------------------------
137. There are high barriers to becoming a pork processor. The
start-up capital necessary to compete with today's pork processors
would be substantial. Pork processors have large economies of scale,
utilizing large and expensive processing facilities. Without those
economies of scale, it would be extremely difficult to compete. The
estimated cost of constructing a large pork processing facility today
is approximately $500 million. Many pork processors are vertically
integrated, a trend that has been increasing in recent years. To
compete effectively, a new entrant would need hundreds of millions of
dollars, substantial ``know how,'' and an opportunity to negotiate with
large pork purchasers. A new company meeting these criteria will be
rare.
138. Pork is a commodity. The pork of one processor is highly
interchangeable with the pork of another processor. The pork processors
themselves acknowledge that pork is a commodity. An internal document
from Triumph stated that ``[t]he wholesale pork market is first and
foremost a commodity market, defined as a market where the products of
all sellers are very similar, and price will tend to fluctuate
depending on available supplies and level of interest . . . . In most
cases, the wholesale pork marketplace is best summed up with the
statement, `Pork is pork.''' Smithfield's former Senior Manager of
Pricing acknowledged that it is not possible to differentiate a
processor's pork once packaging is removed.
139. In sum, the pork market has characteristics that make
information exchanges more likely to be anticompetitive.
C. The Sale of Turkey in the United States Is a Relevant Market
140. The sale of turkey in the United States is a relevant market.
Turkey refers to turkey meat that comes in a variety of forms, fresh or
frozen.
141. Academic estimates show that turkey demand elasticity is low,
indicating that there are no close economic substitutes for turkey.
Academic estimates for cross-elasticity indicate that chicken, pork,
and beef are not close substitutes for turkey.
142. Consumers find turkey to be distinct from other proteins.
Consumption of turkey grew considerably in the 1970s and 1980s and has
remained relatively flat since. Consumers typically view turkey as a
healthier, lower-fat protein than red-meat alternatives, but purchase
turkey in fewer contexts than chicken. A large percentage of turkey is
consumed during holidays (particularly Thanksgiving) as whole-birds;
otherwise, consumers tend to purchase turkey in ground form or as deli
meat.
143. The turkey conspirators' behavior reflects that they
considered the sale of turkey to be a relevant market. Agri Stats'
reports have grouped turkey processors together for comparison. Agri
Stats and EMI have developed and marketed specific services targeted to
turkey processors that they did not make available to processors of
other meats, like chicken. Agri Stats frequently has referenced the
collective market share of the turkey processors that subscribed to its
turkey reports, indicating that Agri Stats believes it is a distinct
market.
144. Processors that operate in multiple protein industries, like
Tyson and Perdue, have separate divisions for the sale of turkey.
Grocery stores group turkey products separately from chicken, pork, and
beef products, reflecting that consumers view the proteins differently.
[[Page 34531]]
145. Industry publications like WATT Poultry also consider turkey
to be a separate economic market. Turkey processors and industry
publications, including Agri Stats, use composite whole bird prices as
relevant metrics for assessing price and demand of turkey.
146. The turkey market is concentrated. The top four processors,
Butterball, Jennie-O, Cargill, and Farbest, make up over 50% of the
market as measured by live pounds processed. The top ten turkey
processors make up over 80% of the market.
147. There are high barriers to becoming a turkey processor. The
start-up capital necessary to compete with today's turkey processors
would be substantial. Turkey processors have large economies of scale,
utilizing large and expensive production facilities. For example,
Prestage Farms estimated the construction costs of one new turkey
processing facility to be $150 million in 2021. Without those economies
of scale, it would be difficult to compete.
148. Turkey processors tend to be vertically integrated. To compete
effectively, a new entrant would need hundreds of millions of dollars,
substantial ``know how,'' and an opportunity to negotiate with large
turkey purchasers. A new company meeting these criteria will be rare.
149. Turkey is a commodity. The turkey of one processor is highly
interchangeable--if even distinguishable--with the turkey of another
processor. The turkey processors, along with industry analysts, refer
to turkey as a commodity. For example, in an internal strategy
document, Cargill refers to turkey as a ``commodity business.''
Butterball noted internally that ``Overall, RETAILERS do not see our
product differentiation as meaningful . . . [,]'' because turkey
products, like turkey bacon, are interchangeable regardless of brand.
150. In sum, the turkey market has characteristics that make
information exchanges more likely to be anticompetitive.
D. Geographic Market
151. The United States is a relevant geographic market for the sale
of broiler chicken, pork, and turkey. Agri Stats, the processors,
courts, and industry specialists all analyze these meat markets on a
national basis. Imports into the United States for each of these meats
are minimal, with less than 1% of domestic broiler and turkey
production imported and around 3% of domestic pork imported. Sales of
these proteins in the United States must comply with U.S. law.
VIII. Jurisdiction, Venue, and Commerce
152. The United States brings this action pursuant to Section 4 of
the Sherman Act, 15 U.S.C. 4, to prevent and restrain Agri Stats from
violating Section 1 of the Sherman Act, 15 U.S.C. 1.
153. The States of California, Minnesota, North Carolina,
Tennessee, Texas, and Utah by and through their respective Attorneys
General, bring this action pursuant to Section 16 of the Clayton Act,
15 U.S.C. 26, to prevent and restrain Agri Stats from violating Section
1 of the Sherman Act, 15 U.S.C. 1.
154. The Court has subject matter jurisdiction under Section 4 of
the Sherman Act, 15 U.S.C. 4, and 28 U.S.C. 1331, 1337(a), 1345.
155. The Court has personal jurisdiction over Agri Stats; venue is
proper in this District under Section 12 of the Clayton Act, 15 U.S.C.
22, and under 28 U.S.C. 1391 because Agri Stats transacts business and
is found within this District.
156. Multiple co-conspirator processors are headquartered in this
District, including Hormel, which is headquartered in Austin, Minnesota
and has been an Agri Stats pork and turkey subscriber, and Jennie-O,
which is also headquartered in Austin, Minnesota and has been an Agri
Stats turkey subscriber. Hormel has also received EMI reports.
157. Gold'n Plump Poultry, an Agri Stats broiler subscriber until
2016, was headquartered in St. Cloud, Minnesota and operated a broiler
processing facility in Cold Spring, Minnesota. In 2016, Pilgrim's, an
Agri Stats subscriber, purchased Gold'n Plump, including the Cold
Spring facility. Pilgrim's now exchanges information with Agri Stats
regarding that Minnesota-based facility.
158. Sparboe Farms is also a current Agri Stats egg subscriber
headquartered in Litchfield, Minnesota.
159. Agri Stats has executed contracts with Hormel and Jennie-O for
which the governing law, jurisdiction, and venue is Minnesota. Agri
Stats has given in-person presentations in Minnesota, including an in-
person pitch to Hormel in which Agri Stats listed every Agri Stats
subscriber in all proteins.
160. Agri Stats has sent its reports to processors located in
Minnesota in the broiler chicken, pork, and turkey industries. Agri
Stats' conduct has harmed the United States markets for broiler
chicken, pork, and turkey, which includes harm in Minnesota, as well as
California, North Carolina, Tennessee, Texas, and Utah.
161. The broiler chicken, pork, and turkey markets are national
markets, and Agri Stats' and its co-conspirators' conduct has
substantially affected interstate commerce in each of the broiler
chicken, pork, and turkey markets.
IX. Violations Alleged
A. Count 1: Sherman Act Section 1--Anticompetitive Information Exchange
Harming Broiler Chicken Market
162. Plaintiffs repeat and reallege each and every paragraph in
this Complaint as if fully set forth herein.
163. Since at least 2008, Agri Stats and its broiler chicken
processor co-conspirators have agreed with each other to exchange
competitively sensitive information regarding prices, output, and
costs. These agreements have unreasonably restrained trade, suppressed
competition, and had the actual and likely effect of stabilizing and
increasing prices and reducing output in the United States broiler
chicken market, in violation of Section 1 of the Sherman Act, 15 U.S.C.
1.
B. Count 2: Sherman Act Section 1--Anticompetitive Information Exchange
Harming Pork Market
164. Plaintiffs repeat and reallege each and every paragraph of
this Complaint as if fully set forth herein.
165. Since at least 2008, Agri Stats and its pork processor co-
conspirators have agreed with each other to exchange competitively
sensitive information regarding prices, output, and costs. These
agreements have unreasonably restrained trade, suppressed competition,
and had the actual and likely effect of stabilizing and increasing
prices and reducing output in the United States pork market, in
violation of Section 1 of the Sherman Act, 15 U.S.C. 1.
C. Count 3: Sherman Act Section 1--Anticompetitive Information Exchange
Harming Turkey Market
166. Plaintiffs repeat and reallege each and every paragraph of
this Complaint as if fully set forth herein.
167. Since at least 2008, Agri Stats and its turkey processor co-
conspirators have agreed with each other to exchange competitively
sensitive information regarding prices, output, and costs. These
agreements have unreasonably restrained trade, suppressed competition,
and had the actual and likely effect of stabilizing and increasing
prices and reducing output in the United States turkey market, in
violation of Section 1 of the Sherman Act, 15 U.S.C. 1.
[[Page 34532]]
X. Requested Relief
168. Agri Stats' business model centers on the recruitment of
competitors in various agricultural protein industries to participate
in anticompetitive information exchanges. This conduct has stabilized
and increased prices and reduced output for staple meat items.
169. Accordingly, Plaintiffs request that this Court:
a. rule that Agri Stats' and its broiler co-conspirators'
anticompetitive information exchange has unreasonably restrained trade
and is unlawful under Section 1 of the Sherman Act, 15 U.S.C. 1;
b. rule that Agri Stats' and its pork co-conspirators'
anticompetitive information exchange has unreasonably restrained trade
and is unlawful under Section 1 of the Sherman Act, 15 U.S.C. 1;
c. rule that Agri Stats' and its turkey co-conspirators'
anticompetitive information exchange has unreasonably restrained trade
and is unlawful under Section 1 of the Sherman Act, 15 U.S.C. 1;
d. permanently enjoin Agri Stats and EMI from facilitating the
exchange of sensitive information;
e. permanently enjoin Agri Stats and EMI from continuing to engage
in the anticompetitive practices described herein and from engaging in
any other practices with the same purpose and effect as the challenged
practices;
f. grant other relief as required by the nature of this case and as
is just and proper to prevent the recurrence of the alleged violations
and to dissipate their anticompetitive effects; and
g. award each Plaintiff, as applicable, an amount equal to its
costs, including reasonable attorneys' fees, incurred in bringing this
action; and award such other relief to each Plaintiff as the Court may
deem just and proper.
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[GRAPHIC] [TIFF OMITTED] TN05JN26.171
United States District Court
for the District of Minnesota
United States of America, State of Minnesota, State of
California, State of North Carolina, State of Tennessee, State of
Texas, and State of Utah, Plaintiffs, v. Agri Stats, Inc.,
Defendant.
No. 0:23-CV-03009-JRT-JFD
Corrected Proposed Final Judgment
Whereas, Plaintiff, United States of America filed a Complaint on
September 28, 2023, which was joined by the States of California,
Minnesota, North Carolina, Tennessee, Texas, and Utah (collectively,
the Plaintiff States) on November 6, 2023 and November 15, 2023;
And whereas, the United States, Plaintiff States, and Defendant,
Agri Stats, Inc., have consented to entry of this Final Judgment
without the taking of testimony, without trial or adjudication of any
issue of fact or law, and without this Final Judgment constituting any
evidence against or admission by any party relating to any issue of
fact or law;
And whereas, Agri Stats agrees to undertake certain actions to
remedy the loss of competition alleged in the Complaint;
And whereas, Agri Stats represents that the relief required by this
Final Judgment can and will be made and that Agri Stats will not later
raise a claim of hardship or difficulty as grounds for asking the Court
to modify any provision of this Final Judgment, except as set forth in
Paragraph XII.A;
Now therefore, it is ordered, adjudged, and decread:
I. Jurisdiction
The Court has jurisdiction over the subject matter of this action
under Section 4 of the Sherman Act, 15 U.S.C. 4, and 28 U.S.C. 1331,
1337(a), and 1345, and has personal jurisdiction over each of the
parties to this action. The Complaint states claims upon which relief
may be granted against Agri Stats under Section 1 of the Sherman Act,
15 U.S.C. 1.
II. Definitions
As used in this Final Judgment:
A. ``Agri Stats'' means Agri Stats, Inc., an Indiana company with
its headquarters in Fort Wayne, Indiana, its successors and assigns,
and its subsidiaries (including EMI), divisions, groups, affiliates,
partnerships, and joint ventures, and their directors, officers,
managers, agents, and employees.
B. ``Agri Stats Report'' means a compilation of data or information
derived from the Non-Public Information of one or more Information
Contributors.
C. ``Book'' means a compilation of Agri Stats Reports that relate
to a common aspect of Meat Processing operations, which Agri Stats
groups together and sells as a single package (e.g., the Live,
Processing, Operations Profit, Bottomline, and Sales).
D. ``Business Unit'' means a group of Complexes that represent the
whole or some portion of a Meat Processing operation. For example, and
without limitation, a Business Unit may include (i) a group of
Complexes treated as one integrated operation because they all produce
products in the same sales channel, or (ii) multiple Complexes
performing different operations (hatching, grow out, processing), which
are associated together.
E. ``Complex'' means a standalone facility engaged in one or more
aspects of Meat Processing operations. For example, and without
limitation, a Complex may be a hatchery, a feed mill, or a Meat
Processing plant.
F. ``Data Confidentiality'' means the requirements of Paragraph
VI.D (including all subparts), below.
G. ``EMI'' means Express Markets, Inc., a subsidiary of Agri Stats.
H. ``EMI Price Reports'' means the EMI publications that (1) Report
nationwide (United States) broiler chicken prices by product category,
(2) are compiled from actual invoice transactions sent electronically
from Meat Processors to EMI, independent of data submissions sent to
Agri Stats, and (3) EMI makes available for purchase by any Person.
I. ``Flag'' means the feature of an Agri Stats Report that reveals
the number of Meat Processors, Business Units, or Complexes used in the
calculation of a given metric. For example, a metric that reflects the
average performance of 88 Complexes might include a ``Flag'' notation
reflecting the number ``88.''
J. ``including'' means including, but not limited to.
K. ``Individual Information'' means the Non-Public Information of
any single Information Contributor (regardless of whether such
information or data is anonymized), including information or data at
the Complex-, Business Unit-, or Meat Processor-level, which is not
aggregated or otherwise combined with the information or data of
another Information Contributor.
L. ``Information Contributor'' means a Person that contributes its
information or data to Agri Stats for use in Reporting by Agri Stats.
M. ``Manuals'' means the instructions, explanations, and
calculations that are compiled by Agri Stats to assist any
[[Page 34538]]
Person in understanding Reporting by Agri Stats.
N. ``Meat Processing'' means the business of transforming raw
broiler chicken, pork, or turkey meat into consumable products. Meat
Processing includes all aspects of such operations, including birthing
or hatching, raising, feeding, slaughtering, eviscerating, cleaning,
butchering, processing, deboning, further processing, packing,
packaging, distributing, selling, and all related activities and the
management of those activities. Meat Processing may occur at integrated
facilities or independent facilities, including feed mills, hatcheries,
grow out farms, farrowing farms, and processing facilities.
O. ``Meat Processor'' means a Person (1) that is engaged in the
business of Meat Processing, or (2) that has full or partial ownership
or control of a Complex.
P. ``Monitor'' means the Person selected by the United States and
appointed by the Court as described in Section VII.
Q. ``Non-Public Information'' means information or data provided to
Agri Stats by one or more Information Contributor(s), which is not
otherwise publicly available, including publicly available through Agri
Stats Reports. Information or data based on Non-Public Information even
if standardized, cleansed, or manipulated in other ways, is also Non-
Public Information.
R. ``Operations Profit Analysis'' means the Book of Agri Stats
Reports, in substantially the same form as exists in April 2026,
relating to the overall profitability of a Meat Processing operation,
which includes metrics related to Operations Profits Per Live Pound,
Other Profit, Yielded Margin Over Processing (``YMOP''), Plant YMOP
Variance Contributions, Sales Impact On Operations Profits, and Live
Cost Impact On Operations Profits.
S. ``Person'' means any natural person, corporation, firm, company,
sole proprietorship, partnership, joint venture, association,
institute, or other legal entity.
T. ``Report'' or ``Reporting'' means to publish, disclose,
disseminate, circulate, provide, transfer, discuss, send, or exchange
information or data by any means including orally (e.g., telephone
communications, video communications, meetings, interviews, voicemails,
audio recordings), electronically (e.g., electronic communications,
emails, text messages, data or information downloads, dashboard,
databases, or structured data access), or by writing (e.g., written or
computer compiled reports, correspondence, graphs, facsimiles).
U. ``Run'' means a version of an Agri Stats Report or Book compiled
from the Non-Public Information of a subset of Meat Processors,
Business Units, or Complexes that share a common characteristic (e.g.,
a small bird Run may include Complexes that primarily process small
birds).
V. ``Sales Data'' means Non-Public Information regarding amounts
charged or paid for broiler chicken, pork, or turkey products sold in
the United States, including aggregated calculations, averaged
calculations, statistical calculations, or distributive calculations.
W. ``Sales Report Books'' means Agri Stats' Express Sales and
Customer Sales Books, in substantially the same form as exists in April
2026, containing Sales Data and other information.
III. Applicability
This Final Judgment applies to Agri Stats, as defined above, and
all other Persons in active concert or participation with Agri Stats
who receive actual notice of this Final Judgment.
IV. Prohibited Conduct
A. Restrictions on Sales Reporting
1. Agri Stats must cease offering its Sales Report Books. Except as
permitted for EMI below, Agri Stats must not Report any Sales Data,
regardless of whether such Sales Data is anonymized, except that Agri
Stats is not prohibited by this Final Judgment from (a) Reporting
calculations provided in the Operations Profit Analysis (which must
otherwise conform to the terms of this Final Judgment) and (b)
Reporting to an Information Contributor its own Individual Information,
which may contain that Information Contributor's own Sales Data.
2. Except as permitted for EMI below, Agri Stats must not receive
or maintain any Sales Data, except for use (a) by Agri Stats' audit
team for calculations in the Operations Profit Analysis (which must
otherwise conform to the terms of this Final Judgment) and (b) for
Reporting to an Information Contributor its own Individual Information.
Except as permitted for EMI below, any Sales Data Agri Stats receives
in compliance with this Paragraph must not identify the purchaser of
the product (whether by name or through use of a customer
identification field) and must not be accessible by Agri Stats account
managers.
B. Restrictions on Non-Sales Reporting. All Reporting by Agri Stats
involving Meat Processing in the United States and that is not
otherwise prohibited by this Final Judgment, including Paragraph IV.A,
must conform to the following requirements, except as otherwise set
forth in this Final Judgment:
1. Prohibition on Participant Lists. Agri Stats must not Report or
otherwise reveal the identity of any Information Contributor; Agri
Stats is not prohibited by this Final Judgment from Reporting an
estimated percentage of the production volume in a given protein
captured by a given Agri Stats Report.
2. Prohibition on Rankings. Agri Stats must not Report any
Information Contributor's ranking(s), including at the Meat Processor-,
Business Unit-, or Complex-level, in any given metric.
3. Prohibition on Flags. Agri Stats must not Report any ``Flags.''
4. Prohibition on Reporting Individual Information. Agri Stats must
not Report any Individual Information, except as explicitly provided
for below in Paragraphs IV.B.4.a through IV.B.4.d and Section V.
a. Information Contributor Data. Agri Stats may Report to an
Information Contributor that Information Contributor's own Individual
Information, as well as the quartile(s) in which the Information
Contributor falls relative to that Agri Stats Report.
b. Aggregated Data. Agri Stats may Report aggregated data that sums
data from multiple Information Contributors in an Agri Stats Report,
subject to any Data Confidentiality restrictions in Paragraph VI.D.1 of
this Final Judgment.
c. Statistical Data. Agri Stats may Report statistical averages
(including weighted averages) that are calculated from the data of
multiple Information Contributors in an Agri Stats Report, subject to
any Data Confidentiality restrictions in Paragraph VI.D.1 of this Final
Judgment.
d. Distribution Data. Agri Stats may Report average data values for
the Information Contributors within each quartile of the data provided
by multiple Information Contributors in an Agri Stats Report, so long
as that average data value is subject to the Data Confidentiality for
Quartile Reporting restrictions in Paragraph VI.D.2 of this Final
Judgment.
5. Public Availability. Agri Stats must make all Reporting and
Manuals available to any Person in the United States in compliance with
the requirements of Paragraph VI.C (including all subparts).
[[Page 34539]]
V. Conduct Not Prohibited
A. Feed Formulation Information. Agri Stats is not prohibited by
this Final Judgment from sharing anonymized Individual Information in
the following Agri Stats Reports in substantially the same form as
those Reports currently exist in Exhibit A: (i) Broiler Breeder Section
Reports 1.11, 1.12, 1.19, and 1.20 and Broiler Live Feed Formulation
Section Reports 5.1 to 5.15, except that with respect to the Broiler
Breeder Section Reports the Individual Information in such Agri Stats
Reports must not include pullet weights, feed owner variance, percent
egg production, percent hatchability, males per 100 females, percent
males, percent mortality, average age, bird weight, bird weight range,
bird age, beginning age, or days fed; (ii) Swine Live Pig Production
Section Reports 1.8, 1.9, 1.10, and 1.11 and Nursery Section Reports
5.9, 5.14, 5.15, 5.16, and 5.17, except that with respect to the Swine
Live Pig Production Section Reports and Nursery Section Reports the
Individual Information in the Agri Stats Reports must not include age,
start age, start weight, finish age, finish weight, final weight,
percent mortality, days in finish, percent in gilt pool, pigs weaned
per litter, sow own cost, average litter weight, economic impact,
placed weight, moved weight, days in nursery, age placed, weight
placed, age moved, or weight moved; and (iii) Swine Live 3 Phase
Finishing Section Reports 6.11, 6.12, 6.13, 6.26, 6.27, and 6.28; and
Wean to Finish Section Reports 7.11, 7.12, 7.13, 7.26, 7.27, and 7.28,
except that with respect to the Swine Live 3 Phase Finishing Section
Reports and Wean to Finish Section Reports the Individual Information
in the Agri Stats Reports must not include start weight, finish weight,
final weight, start age, finish age, age, or days in finish. All other
restrictions in this Final Judgment apply to the Agri Stats Reports
identified in this Paragraph. Agri Stats must permit Processors,
Business Units, or Complexes participating in the Agri Stats Reports
identified in this Paragraph to independently determine whether their
Individual Information will be Reported.
B. Performance Metrics. Agri Stats is not prohibited by this Final
Judgment from limiting the sale of the broiler chicken and pork
performance metrics listed in Exhibit B (or corresponding turkey and
pork processing metrics should such Reporting resume) to Information
Contributors. The metrics in this Paragraph are excepted only to the
extent that they relate to animals that are no longer in production
(e.g., Agri Stats must not restrict to Information Contributors data
regarding animal stocking density for breeder hen flocks that are still
producing eggs at the time of the Reporting). All other terms in this
Final Judgment apply to such Reporting.
C. Agri Stats is not prohibited by this Final Judgment from
continuing to publish weekly Agri Stats Reports containing feed, yield,
and performance data that are otherwise not prohibited by this Final
Judgment and such weekly Agri Stats Reports are subject to all
provisions of this Final Judgment, including the Recency Restrictions
in Paragraph VI.E.
D. Agri Stats is not prohibited by this Final Judgment from
offering new or additional types of Reporting, provided that such
Reporting incorporates corresponding restrictions as those set forth in
this Final Judgment. Agri Stats must submit notice of any new Reporting
(including examples of public Reporting and Information Contributor
Reporting, as applicable) to the United States, the Monitor, and the
Plaintiff States no fewer than sixty (60) days prior to the
introduction of such Reporting. The Monitor will provide to Agri Stats,
the United States, and the Plaintiff States any comments about the
Reporting, including any opinion that the Reporting is prohibited by
the terms of this Final Judgment, within 30 days of receipt of Agri
Stats' notice. For the avoidance of doubt, no new Reporting may be
restricted or prohibited under this Final Judgment unless it is
inconsistent with the terms set forth herein. Agri Stats is not
prohibited by this Final Judgment from adding new average or quartile
statistics based on data already included in existing Reporting without
notice to the Monitor, so long as such average or quartile statistics
comply with the Data Confidentiality standards set forth in Paragraph
VI.D (including all subparts).
E. Notwithstanding the restrictions in Paragraph IV.A.1 and IV.A.2,
the following applies to Agri Stats' subsidiary, EMI:
1. EMI is not prohibited by this Final Judgment from continuing to
provide EMI Price Reports in substantially the same manner as it did as
of April 24, 2026, but (1) such Reporting must continue to be made
available to any interested party in the United States on terms that
are no worse than those available to Meat Processors, and (2) EMI must
not disclose in any manner the identities of the Persons that provide
Sales Data for use in EMI Price Reports.
2. EMI is not prohibited by this Final Judgment from modifying the
EMI Price Reports to add new or revised product categories so long as
EMI meets all of the following conditions in Paragraph V.E.2.a
(including all subparts):
a. Beginning 30 days after the Monitor agreement is finalized, and
every six months thereafter, EMI must provide notice to the United
States, the Monitor, and Plaintiff States identifying the product
categories it intends to add to its EMI Price Reports.
i. For each product category EMI intends to add to its EMI Price
Reports, EMI's notice to the United States, the Monitor, and Plaintiff
States must include data sufficient to show that during the previous
three months at least five Meat Processors produced products assigned
to that product category, and no Meat Processor was responsible for
more than 50 percent of the sales for that product category in the
United States over that three month period. EMI's notice to the United
States, the Monitor, and Plaintiff States must include the raw data
underlying EMI's calculations and the identities and contact
information of the Meat Processors that contributed to that data.
ii. For each product category EMI intends to add to its EMI Price
Reports, EMI's notice to the United States, the Monitor, and Plaintiff
States must include documents or information sufficient to show that
EMI received requests to include the proposed product category in its
EMI Price Reports from three meat purchasers that are not Meat
Processors. Those non-Meat Processor meat purchasers may be current EMI
customers or prospective EMI customers. EMI's notice to the United
States, the Monitor, and Plaintiff States also must include contact
information for each non-Meat Processor meat purchaser from whom EMI
received the requests. Unless the United States objects that such added
product categories do not comply with this Final Judgment, EMI may
publish the product categories identified pursuant to Paragraph V.E.2.a
in its EMI Price Reports 30 days after providing notice. Objection by
the United States need not be filed with the Court.
3. As an alternative to the provisions set forth in Paragraphs
V.E.2.a.i and ii, EMI may, at any time, request and receive approval to
add new product categories to its EMI Price Reports from the United
States after recommendation from the Monitor.
4. Other than new product categories, which are subject to the
requirements above, this Final Judgment does not prohibit EMI from
modifying its EMI Price Reports to add new or revised Reporting
statistics, provided that such newly revised statistics do not in any
way compare Meat Processor prices
[[Page 34540]]
(including individual processor price averages) to prices in EMI Price
Reports, including through variances, economic impact statistics, or
rankings.
5. EMI may only collect, receive, or maintain Sales Data for
purposes of preparing the EMI Price Reports described in Paragraphs V.E
and for no other purpose. Agri Stats (including EMI) may not use EMI
Price Reports or the information and data underlying such Reports to
reintroduce Agri Stats' Sales Report Books or to compare Meat Processor
prices (including individual processor price averages) to prices in EMI
Price Reports, including through variances, economic impact statistics,
or rankings. For the avoidance of doubt, Agri Stats will not provide
price opportunities or consulting to identify products for raising
prices to Meat Processors using EMI Sales Data.
6. The Paragraphs in V.E are intended only to exempt EMI Price
Reports from Paragraphs IV.A.1 and IV.A.2 of this Final Judgment while
ensuring that EMI does not become a vehicle for the reintroduction of
Agri Stats' Sales Report Books.
7. During the Term of this Final Judgment, EMI must provide at
least 30 days' notice to the United States, the Monitor, and the
Plaintiff States before it expands its EMI Price Reports to include
U.S. turkey or pork products. All provisions of this Final Judgment
apply to any Reporting of those products; provided, however, that Agri
Stats may submit for approval by the United States in its sole
discretion, concurrently with providing notice to the Monitor and the
Plaintiff States, a proposal for alternatives to the restrictions in
Paragraphs V.E.2.a.i-ii in light of market differences for those
products.
VI. Required Conduct
A. Agri Stats must not Report any Non-Public Information collected
from an Information Contributor other than as expressly permitted in
this Final Judgment.
B. Agri Stats is not prohibited by this Final Judgment from
renumbering or reordering its Agri Stats Reports or data fields,
provided doing so does not cause such Reports or data fields to violate
this Final Judgment. Agri Stats must keep detailed records, available
to the United States, the Monitor, and the Plaintiff States at their
request, at any time, cataloguing any renumbering or reordering of its
Agri Stats Reports or data fields.
C. Agri Stats must comply with the following provisions related to
making its Reporting available for purchase by non-Meat Processor
Persons in the United States.
1. The first time any non-Meat Processor Person seeks to purchase
any Agri Stats Report, Agri Stats must offer to sell any monthly
general Run of any Agri Stats Report for a single month at the average
monthly rate for a single-plant Meat Processor. If the non-Meat
Processor Person purchases a general Run of an Agri Stats Report, Agri
Stats must also offer to sell any monthly specialty Run of that Agri
Stats Report for that same month. After that initial purchase by the
non-Meat Processor Person, Agri Stats may require it to purchase annual
subscriptions pursuant to Paragraphs VI.C.2.
2. Other than as described in Paragraph VI.C.1, Agri Stats must
make annual subscriptions to all Reporting and Manuals available to all
Persons in the United States or doing business in the United States.
Consistent with Agri Stats' policy with respect to Meat Processors, if
a non-Meat Processor Person purchases the general Run, that Person also
may purchase one or more specialty Runs. Non-Meat Processor Persons
also may choose to limit their subscriptions to particular Books. Agri
Stats must not require non-Meat Processor Persons to purchase more
Reporting or Manuals than it requires Meat Processors to purchase.
3. For the duration of this Final Judgment, Agri Stats must not
charge a non-Meat Processor Person for its Reporting and Manuals more
than the average price as of the day of purchase that Agri Stats
charges single-plant Meat Processors for the same Reporting and Manuals
on a Book-by-Book or Run-by-Run basis. For example, if single-plant
Meat Processors pay an average price of $1,500 per month for the
general Run of the Live/Growout general Run Book, Agri Stats must
charge a non-Meat Processor Person no more than $1,500 per month for
the Live/Growout general Run Book or $18,000 for an annual
subscription.
4. Agri Stats must not attach non-price terms or prices or use any
other means to discourage or prevent non-Meat Processor Persons from
purchasing its Reporting, except that Agri Stats may impose reasonable
restrictions on the disclosure of any Reporting. Agri Stats also may
impose nondiscriminatory limitations on the use of any Reporting,
including: (a) prohibitions on de-identifying Agri Stats Reports, and
(b) prohibitions on use of Agri Stats Reports to reverse-engineer or
otherwise develop a competing benchmarking service. For the avoidance
of doubt, Agri Stats will not apply non-price terms for non-Meat
Processors that are less favorable in any way than those terms Agri
Stats applies for Meat Processors.
5. Agri Stats may not require non-Meat Processor Persons to
contribute data or condition the purchase of any Reporting by Agri
Stats on a requirement to purchase any other Agri Stats product or
service. Agri Stats may require Meat Processors to contribute data as a
condition of the purchase of any Reporting by Agri Stats. Agri Stats
must publicize in a conspicuous manner on its website that its
Reporting and Manuals are available for purchase by any Person in the
United States.
D. Data Confidentiality. All Reporting by Agri Stats involving Meat
Processing located in the United States and which is not otherwise
prohibited by this Final Judgment must conform to the following
requirements:
1. Data Confidentiality Restrictions. For all Agri Stats Reports
consisting of data reflecting 50 percent or more of the United States
sales for the protein segment that is the subject of the specific Run,
Agri Stats must ensure that all Aggregated Data and Statistical Data
values consist of data from at least three Meat Processors with no Meat
Processor representing more than 70% of the data reflected in the Agri
Stats Report, except as stated in Paragraph VI.D.2.
2. Data Confidentiality Restrictions for Quartile Reporting. For
all Agri Stats Reports consisting of data reflecting 50 percent or more
of the United States sales for the protein segment that is the subject
of the specific Run, Agri Stats must ensure that a quartile average is
calculated from at least 3 Complexes in each quartile.
E. Recency Restrictions. Other than Agri Stats Reports of a
Person's own data, Agri Stats must ensure that every data field in
every Agri Stats Report is composed of data that is at least (i)
cumulatively 45 days old on average, and (ii) in the case of data that
reflects production decisions (e.g., breeder chick placements), that
the production decision was made at least 90 days prior to Reporting.
Data for a given month will not be included in an Agri Stats Report
until the first day of the second month after the given month (e.g.,
February data will not be included in an Agri Stats Report until April
1).
F. 30 days after entry of this Final Judgment, Agri Stats must send
to the United States and the Plaintiff States the following:
1. Copies of all Agri Stats Reports as modified to comply with the
terms of this Final Judgment;
2. A sworn statement describing all efforts to make Agri Stats
Reports publicly available as required by
[[Page 34541]]
Paragraph VI.C of this Final Judgment, including the identity and
contact information of all current Agri Stats customers and known
prospective non-Meat Processor customers from preceding three months;
3. Copies of all contracts with Agri Stats' customers (or, if no
written contract exists for a customer, a summary of all material terms
between Agri Stats and that customer);
4. A sworn statement describing in detail the steps Agri Stats has
taken to implement an antitrust compliance program as required by
Section VIII of this Final Judgment; and
5. Even if earlier than otherwise required by Paragraph V.E.2.a and
its notice requirement, a list of all product categories Agri Stats
intends to add to EMI Price Reports, consistent with the other
requirements of Paragraph V.E.2.a.
VII. Appointment of Monitor
A. Upon application of the United States, which Agri Stats may not
oppose, the Court will appoint a Monitor selected by the United States
in its sole discretion and approved by the Court. Within 30 calendar
days after entry of the Stipulation and Order in this case, Agri Stats
may propose to the United States a pool of three candidates to serve as
the Monitor, and the United States may consider Agri Stats'
perspectives on Agri Stats' three proposed candidates or any other
candidates identified by the United States. The United States retains
the right, in its sole discretion, either to select the Monitor from
among the three candidates proposed by the Settling Defendants or to
select a different candidate for the Monitor.
B. The Monitor will have the power and authority to monitor Agri
Stats' compliance with the terms of this Final Judgment entered by the
Court and will have other powers as the Court deems appropriate. The
Monitor will have no responsibility or obligation for the operation of
Agri Stats' business. No attorney-client relationship will be formed
between Agri Stats and the Monitor.
C. The Monitor will have the authority to take such steps as, in
the judgment of the Monitor and the United States, may be necessary to
accomplish the Monitor's responsibilities. The Monitor may seek
information from Agri Stats' personnel, including executives, in-house
counsel, compliance personnel, and internal auditors. Agri Stats must
establish a policy, annually communicated to all employees, that
employees may disclose any information to the Monitor without reprisal
for such disclosure. Agri Stats must not retaliate against any employee
or third party for disclosing information to the Monitor.
D. Agri Stats may not object to actions taken by the Monitor in
fulfillment of the Monitor's responsibilities under any Order of the
Court on any ground other than malfeasance by the Monitor except as set
forth in Paragraph XII.A. Disagreements between the Monitor and Agri
Stats related to the scope of the Monitor's responsibilities do not
constitute malfeasance. Objections by Agri Stats must be conveyed in
writing to the United States and the Monitor within 30 calendar days
after Agri Stats learns of the Monitor's action that gives rise to Agri
Stats' objection, or the objection is waived.
E. The Monitor will serve at the cost and expense of Agri Stats
pursuant to a written agreement, on terms and conditions, including
confidentiality requirements and conflict of interest certifications,
approved by the United States in its sole discretion. If the Monitor
and Agri Stats are unable to reach such a written agreement within 14
calendar days of the Court's appointment of the Monitor, or if the
United States, in its sole discretion, declines to approve the proposed
written agreement, the United States, in its sole discretion, may take
appropriate action, including making a recommendation to the Court,
which may set the terms and conditions for the Monitor's work,
including compensation, costs, and expenses.
F. The Monitor may hire, at the cost and expense of Agri Stats, any
agents and consultants, including attorneys and accountants, that are
reasonably necessary in the Monitor's judgment to assist with the
Monitor's duties. These agents or consultants will be directed by and
solely accountable to the Monitor and will serve on terms and
conditions, including confidentiality requirements and conflict-of-
interest certifications, approved by the United States in its sole
discretion. Within three business days of hiring any agents or
consultants, the Monitor must provide written notice of the hiring, the
identity of the agent or consultant, and the rate of compensation to
Agri Stats and the United States.
G. The compensation of the Monitor and agents or consultants
retained by the Monitor must be on reasonable and customary terms
commensurate with the individuals' experience and responsibilities.
H. The Monitor must account for all costs and expenses incurred,
including by submitting reports to the United States, the Plaintiff
States, and Agri Stats on a regular basis. The frequency and details
included in such reports will be determined as part of the Monitor's
work plan, but must include time spent, work performed, and rates
charged. Agri Stats' failure to promptly pay the Monitor's accounted-
for costs and expenses, including for agents and consultants, will
constitute a violation of this Final Judgment and may result in
sanctions ordered by the Court. If Agri Stats make a timely objection
in writing to the United States to any part of the Monitor's accounted-
for costs and expenses, Agri Stats must establish an escrow account
into which Agri Stats must pay the disputed costs and expenses until
the dispute is resolved. For the avoidance of doubt, Agri Stats retains
the right under Section XI and Paragraph XII.A to seek relief from the
Court if unable to resolve its objections with the United States and
the Monitor regarding the Monitor's accounted-for costs and expenses.
I. Agri Stats must use best efforts to cooperate fully with the
Monitor and to assist the Monitor in monitoring Agri Stats' compliance
with its obligations under this Final Judgment. Subject to reasonable
protection for trade secrets, other confidential research, development,
or commercial information, or any applicable privileges or court
orders, Agri Stats must provide the Monitor and agents or consultants
retained by the Monitor with full and complete access to all personnel
(current and former), agents, consultants, information and data, books,
records, and facilities. Agri Stats may not take any action to
interfere with or to impede accomplishment of the Monitor's
responsibilities.
J. Following Agri Stats' provision of the information set forth in
Paragraph VI.F, the United States will determine whether Agri Stats'
Reporting, customer agreements, and compliance program are compliant
with the Final Judgment, address any deficiencies with Agri Stats, and,
upon Agri Stats' compliance, inform the Monitor as to Agri Stats'
compliance with the Final Judgment. The Monitor will monitor Agri
Stats' Reporting, customer agreements, and compliance program to ensure
that Agri Stats continues to be in compliance with the Final Judgment.
For avoidance of doubt, this provision is not intended to and does not
limit the Monitor's power and authority to monitor Agri Stats'
compliance with the terms of this Final Judgment.
K. The Monitor must investigate and report on Agri Stats'
compliance with this Final Judgment, including reviewing and reporting
on (1) Reporting by Agri Stats to determine compliance with, e.g.,
Sections IV-VI;
[[Page 34542]]
(2) data to determine compliance with, e.g., Paragraphs IV.A.2, B.4.b-
d; V.C; V.E.2, 5-7; and VI.D-E; (3) the identity of Agri Stats'
customers to determine compliance with, e.g., Paragraphs V.E.1 and
VI.C; (4) the identity of Agri Stats' prospective, non-Meat Processor
customers to determine compliance with, e.g., Paragraph VI.C; and (5)
Agri Stats' agreements and price and non-price terms offered to its
customers and prospective customers (including non-Meat Processors
seeking to purchase Agri Stats Reporting) to determine compliance with,
e.g., Paragraphs V.E.1; VI.C; and Section VIII. The Monitor should not
repeat the initial review of Agri Stats information produced to the
United States pursuant to Paragraph VI.F. The Monitor must provide
periodic reports to the United States and the Plaintiff States setting
forth Agri Stats' efforts to comply with its obligations under this
Final Judgment. The United States, in its sole discretion, will set the
frequency of the Monitor's reports, but, at minimum, the Monitor must
provide reports annually.
L. Within 30 calendar days after appointment of the Monitor by the
Court, and on a yearly basis thereafter, the Monitor must provide to
the United States, the Plaintiff States, and Agri Stats a proposed
written work plan. Agri Stats may provide comments on the proposed
written work plan to the United States and the Monitor within 14
calendar days after receipt, after which the Monitor must produce a
final work plan to the United States and Agri Stats, for approval by
the United States in its sole discretion. Any disputes between Agri
Stats and the Monitor with respect to any written work plan will be
decided by the United States in its sole discretion. The United States
retains the right, in its sole discretion, to require changes or
additions to a work plan at any time.
M. The Monitor will serve for a term of 7 years beginning on the
date that the initial work plan is finalized pursuant to Paragraph
VII.L unless the United States, in its sole discretion after
consultation with the Plaintiff States, determines a shorter period is
appropriate. Beginning three years from the date the initial work plan
is finalized pursuant to Paragraph VII.L, the United States will
determine in its sole discretion whether continuation of the Monitor's
term is appropriate, or whether to suspend the remainder of the term.
Factors that the United States will consider in that determination
include:
1. Agri Stats' compliance with the terms of this Final Judgment;
2. Agri Stats' cooperation with the Monitor; and
3. Whether Agri Stats has retained a dedicated compliance officer
to oversee its compliance with the Approved Compliance Program and
annually certify its compliance to the United States and Plaintiff
States for the remainder of the term of the consent decree.
N. If the United States determines that continuation of the
Monitor's term is appropriate pursuant to Paragraph VII.M, it may
determine that a reduced Monitor work plan is appropriate for the
remainder of the Monitor's term.
O. If the United States determines that the Monitor is not acting
diligently or in a reasonably cost-effective manner, or if the Monitor
resigns or becomes unable to accomplish the Monitor's duties, the
United States may recommend that the Court appoint a substitute.
VIII. Antitrust Compliance Program
A. Within 30 days of entry of the Stipulation and Order, Agri Stats
must submit a written antitrust compliance policy to the United States
and Plaintiff States for approval by the United States in its sole
discretion that complies with the obligations set forth in this Final
Judgment. Agri Stats must annually train all United States employees on
this written policy. At a minimum, the compliance program will include
the following:
1. Data security measures to prevent Meat Processor employees who
leave their employment from accessing their prior employer's Agri Stats
Reports and Individual Information;
2. Data security measures to prevent Agri Stats employees who
accept employment with a Meat Processor from accessing Non-Public
Information of any Meat Processor other than the employee's new Meat
Processor employer;
3. A prohibition on Agri Stats and its employees assisting with
identifying Information Contributors and/or de-anonymizing Non-Public
Information in Agri Stats Reports;
4. Publication of confidentiality language on all Reporting;
5. Whistleblower protections for any Person who reports to Agri
Stats, the United States, the Monitor, or any of the Plaintiff States,
any known or suspected violation of law or this Final Judgment;
6. Disciplinary consequences for violations of the antitrust
compliance policy; and
7. Mandatory disclosure of violations or potential violations of
this Final Judgment to the United States, Plaintiff States, and the
Monitor, including the following information:
a. The date, time, location, and a description of the violation or
potential violation;
b. All participants involved in the violation or potential
violation; and
c. A description of any documents related to the violation, which
Agri Stats must also produce to the United States and the Plaintiff
States.
IX. Compliance Inspection
A. For the purposes of determining or securing compliance with this
Final Judgment or of related orders or of determining whether this
Final Judgment should be modified or vacated, upon the written request
of an authorized representative of the Assistant Attorney General for
the Antitrust Division, or any one of the Plaintiff States, and
reasonable notice to Agri Stats, Agri Stats must permit, from time to
time and subject to legally recognized privileges or court order,
authorized representatives, including agents retained by the United
States:
1. to have access during Agri Stats' business hours to inspect and
copy, or at the option of the United States, to require Agri Stats to
provide electronic copies of all Agri Stats Reports, books, ledgers,
accounts, records, data, and documents, wherever located, in the
possession, custody, or control of Agri Stats relating to any matters
contained in this Final Judgment; and
2. to interview, either informally or on the record, Agri Stats'
officers, employees, or agents, wherever located, who may have their
individual counsel present, relating to any matters contained in this
Final Judgment. The interviews must be subject to the reasonable
convenience of the interviewee and without restraint or interference by
Agri Stats.
B. Upon the written request of an authorized representative of the
Assistant Attorney General for the Antitrust Division, Agri Stats must
submit written reports or respond to written interrogatories, under
oath if requested, relating to any matters contained in this Final
Judgment.
X. Public Disclosure
A. No information or documents obtained pursuant to any provision
in this Final Judgment, including reports the Monitor provided to the
United States and Plaintiff States pursuant to Paragraph VII.K, may be
divulged by the United States and Plaintiff States or the Monitor to
any person other than the Court, an authorized representative of the
executive branch of the United States, or an authorized representative
of the Plaintiff States; except in the course of legal proceedings to
which the
[[Page 34543]]
United States or a Plaintiff State is a party, including grand-jury
proceedings; for the purpose of securing compliance with this Final
Judgment; or as otherwise required by law.
B. In the event that the Monitor receives a subpoena, court order,
or other court process seeking or requiring production of information
or documents obtained pursuant to any provision in this Final Judgment,
including reports the Monitor provides to the United States or the
Plaintiff States pursuant to Paragraph VII.K, the Monitor must notify
the United States, the Plaintiff States, and Agri Stats immediately and
prior to any disclosure, so that Agri Stats may address such potential
disclosure and, if necessary, pursue legal remedies, including, if
deemed appropriate by Agri Stats, intervention in the relevant
proceedings.
C. In the event of a request by a third party pursuant to the
Freedom of Information Act, 5 U.S.C. 552, or similar state disclosure
laws for disclosure of information obtained pursuant to any provision
of this Final Judgment, the United States will act in accordance with
that statute and the Department of Justice regulations at 28 CFR part
16, including the provision on confidential commercial information at
28 CFR 16.7, and the Plaintiff States will act in accordance with their
applicable disclosure laws. When submitting information to the
Antitrust Division, Agri Stats should designate those portions of the
information or documents submitted that contain or constitute
confidential commercial information under 28 CFR 16.7. Designations of
confidentiality expire 10 years after submission, ``unless the
submitter requests and provides justification for a longer designation
period.'' See 28 CFR 16.7(b).
D. If at the time that Agri Stats furnishes information or
documents to the United States and Plaintiff States pursuant to any
provision of this Final Judgment, Agri Stats represents and identifies
in writing information or documents for which a claim of protection may
be asserted under Rule 26(c)(1)(G) of the Federal Rules of Civil
Procedure, and Agri Stats marks each pertinent page of such material,
``Subject to claim of protection under Rule 26(c)(1)(G) of the Federal
Rules of Civil Procedure,'' the United States and the Plaintiff States
must give Agri Stats 10 calendar days' notice before divulging the
material in any legal proceeding (other than a grand jury proceeding).
XI. Retention of Jurisdiction
The Court retains jurisdiction to enable any party to this Final
Judgment to apply to the Court at any time for further orders and
directions as may be necessary or appropriate to carry out or construe
this Final Judgment, including as to Paragraph XII.A, to modify any of
its provisions, to enforce compliance, and to punish violations of its
provisions.
XII. Enforcement of Final Judgment
A. In developing and approving the annual Monitor work plans
pursuant to Paragraph VII.L, the United States and the Monitor will
reasonably consider Agri Stats' size, revenue, financial condition, and
compliance with this Final Judgment, recognizing that Agri Stats'
conduct and compliance with this Final Judgment will affect Monitor
costs. On a yearly basis beginning thirty (30) days before the annual
Monitor work plan is due, Agri Stats must provide the United States,
Monitor, and Plaintiff States with an affidavit of financial condition,
made under penalty of perjury, that includes annual operating revenue
and costs for the preceding year for Agri Stats, including EMI. If at
any time during the term of the monitorship the United States or
Plaintiff State(s) determine that the monitorship has failed to secure
Agri Stats' compliance with the terms of this Final Judgment or that
Agri Stats has failed to use best efforts to cooperate fully with the
Monitor and to assist the Monitor in monitoring Agri Stats' compliance
with its obligations under this Final Judgment, then the United States
or Plaintiff State(s) may move to seek additional relief.
B. The United States and Plaintiff States retain and reserve all
rights to enforce the provisions of this Final Judgment, including the
right to seek an order of contempt from the Court. In a civil contempt
action, a motion to show cause, or a similar civil action brought by
the United States or Plaintiff States relating to an alleged violation
of this Final Judgment, the United States or Plaintiff States may
establish a violation of this Final Judgment and the appropriateness of
a remedy therefor by a preponderance of the evidence, and Agri Stats
waives any argument that a different standard of proof should apply.
C. This Final Judgment should be interpreted to give full effect to
the procompetitive purposes of the antitrust laws and to restore the
competition the United States and Plaintiff States allege was harmed by
the challenged conduct. Agri Stats may be held in contempt of, and the
Court may enforce, any provision of this Final Judgment that, as
interpreted by the Court in light of these procompetitive principles
and applying ordinary tools of interpretation, is stated specifically
and in reasonable detail, whether or not it is clear and unambiguous on
its face. In any such interpretation, the terms of this Final Judgment
should not be construed against either party as the drafter.
D. In an enforcement proceeding in which the Court finds that Agri
Stats has violated this Final Judgment, the United States or Plaintiff
State(s) may apply to the Court for an extension of this Final
Judgment, together with other relief that may be appropriate. In
connection with a successful effort by the United States or Plaintiff
State(s) to enforce this Final Judgment against Agri Stats, whether
litigated or resolved before litigation, that Agri Stats must reimburse
the United States or Plaintiff State(s) for the fees and expenses of
its attorneys, as well as all other costs including experts' fees,
incurred in connection with that effort to enforce this Final Judgment,
including during the investigation of the potential violation.
E. For a period of four years following the expiration of this
Final Judgment, if the United States has evidence that Agri Stats
violated this Final Judgment before it expired, the United States may
file an action against Agri Stats in this Court requesting that the
Court order: (1) Agri Stats to comply with the terms of this Final
Judgment for an additional term of at least four years following the
filing of the enforcement action; (2) all appropriate contempt
remedies; (3) additional relief needed to ensure the Agri Stats
complies with the terms of this Final Judgment; and (4) fees or
expenses as called for by this Section XII.
XIII. Expiration of Final Judgment
Unless the Court grants an extension, this Final Judgment will
expire 10 years from the date of its entry, except that after 7 years
from the date of its entry, this Final Judgment may be terminated upon
motion by the United States, with the consent of all Plaintiffs, to the
Court and notice by the United States to Defendant that continuation of
this Final Judgment is no longer necessary or in the public interest.
All requirements, including all notice, certification, and reporting
requirements will terminate automatically upon the expiration of this
Final Judgment.
XIV. Reservation of Rights
This Final Judgment terminates only the claims stated in the
Complaint
[[Page 34544]]
against Agri Stats and does not in any way affect other charges or
claims the United States or Plaintiff States may file.
XV. Notice
For purposes of the Final Judgment, any notice or other
communication required to be filed with or provided to the United
States or Plaintiff States must be sent to the addresses set forth
below (or such other addresses as the United States or Plaintiff States
may specify in writing to Agri Stats):
Chief, Anti-Monopoly and Collusion Enforcement Section, U.S.
Department of Justice, Antitrust Division, 450 Fifth Street NW,
Washington, DC 20530, <a href="/cdn-cgi/l/email-protection#d293868098a7b6b5bfb7bca691bdbfa2bebbb3bcb1b792a7a1b6bdb8fcb5bda4"><span class="__cf_email__" data-cfemail="d59481879fa0b1b2b8b0bba196bab8a5b9bcb4bbb6b095a0a6b1babffbb2baa3">[email protected]</span></a>.
For the State of Minnesota:
Katherine Moerke, Sarah Doktori
Assistant Attorneys General, Office of the Minnesota Attorney
General, 445 Minnesota Street, Suite 600, St. Paul, Minnesota 55101,
<a href="/cdn-cgi/l/email-protection#2843495c404d5a41464d0645474d5a434d68494f065b5c495c4d064546065d5b"><span class="__cf_email__" data-cfemail="b8d3d9ccd0ddcad1d6dd96d5d7ddcad3ddf8d9df96cbccd9ccdd96d5d696cdcb">[email protected]</span></a>, <a href="/cdn-cgi/l/email-protection#afdcceddcec781cbc0c4dbc0ddc6efcec881dcdbcedbca81c2c181dadc"><span class="__cf_email__" data-cfemail="e6958794878ec882898d9289948fa68781c89592879283c88b88c89395">[email protected]</span></a>.
For the State of California:
Paula Blizzard, <a href="/cdn-cgi/l/email-protection#4a1a2b3f262b6428262330302b382e0a2e252064292b642d253c"><span class="__cf_email__" data-cfemail="4b1b2a3e272a6529272231312a392f0b2f242165282a652c243d">[email protected]</span></a>.
Michael Jorgenson, <a href="/cdn-cgi/l/email-protection#7e33171d161f1b125014110c191b100d11103e1a1114501d1f50191108"><span class="__cf_email__" data-cfemail="8bc6e2e8e3eaeee7a5e1e4f9eceee5f8e4e5cbefe4e1a5e8eaa5ece4fd">[email protected]</span></a>.
Casey Kovarik, <a href="/cdn-cgi/l/email-protection#0c4f6d7f69752267637a6d7e65674c686366226f6d226b637a"><span class="__cf_email__" data-cfemail="6a290b190f134401051c0b1803012a0e050044090b440d051c">[email protected]</span></a>, California Attorney
General's Office, Antitrust Section, 300 South Spring St., Los
Angeles, CA 90013
For the State of North Carolina:
Kunal Choksi, Senior Deputy Attorney General, <a href="/cdn-cgi/l/email-protection#83e8e0ebece8f0eac3ede0e7ece9ade4ecf5"><span class="__cf_email__" data-cfemail="92f9f1fafdf9e1fbd2fcf1f6fdf8bcf5fde4">[email protected]</span></a>
Charles White, Assistant Attorney General, <a href="/cdn-cgi/l/email-protection#95f6e2fdfce1f0d5fbf6f1faffbbf2fae3"><span class="__cf_email__" data-cfemail="cba8bca3a2bfae8ba5a8afa4a1e5aca4bd">[email protected]</span></a>, North
Carolina Department of Justice, Consumer Protection Division, P.O.
Box 629, Raleigh, NC 27602
For the State of Tennessee:
Deputy Attorney General, Antitrust and Scaled Industries Division,
Office of the Tennessee Attorney General, P.O. Box 20207, Nashville,
TN 37202, <a href="/cdn-cgi/l/email-protection#521633243b367c1f31163d25373e3e1233357c263c7c353d24"><span class="__cf_email__" data-cfemail="084c697e616c26456b4c677f6d646448696f267c66266f677e">[email protected]</span></a>.
For the State of Texas:
Chief, Antitrust Division, Office of the Texas Attorney General, 300
West 15th St., Austin, TX 78701, <a href="/cdn-cgi/l/email-protection#c4a5aab0adb0b6b1b7b084aba5a3eab0a1bca5b7eaa3abb2"><span class="__cf_email__" data-cfemail="a4c5cad0cdd0d6d1d7d0e4cbc5c38ad0c1dcc5d78ac3cbd2">[email protected]</span></a>.
For the State of Utah:
Marie W.L. Martin, CIPP/US, Division Director, Antitrust & Data
Privacy Division, Utah Office of the Attorney General, P.O. Box
140811, 160 E 300 South, Salt Lake City, UT 84114, Cel: 385-270-
2164, <a href="/cdn-cgi/l/email-protection#e38e948e8291978a8da382849697828bcd848c95"><span class="__cf_email__" data-cfemail="452832282437312c2b0524223031242d6b222a33">[email protected]</span></a>.
Matt Michaloski, Assistant Attorney General, Antitrust & Data
Privacy Division, Utah Office of the Attorney General, 160 E 300 S,
5th Floor, P.O. Box 140830, Salt Lake City, UT 84114-0830, 801-440-
9825, <a href="/cdn-cgi/l/email-protection#3a57575359525b56554951537a5b5d4f4e5b52145d554c"><span class="__cf_email__" data-cfemail="fe9393979d969f92918d9597be9f998b8a9f96d0999188">[email protected]</span></a>.
XVI. Public Interest Determination
Entry of this Final Judgment is in the public interest. The
parties have complied with the requirements of the Antitrust
Procedures and Penalties Act, 15 U.S.C. 16, including by making
available to the public copies of this Final Judgment and the
Competitive Impact Statement, public comments thereon, and any
response to comments by the United States. Based upon the record
before the Court, which includes the Competitive Impact Statement
and, if applicable, any comments and response to comments filed with
the Court, entry of this Final Judgment is in the public interest.
Date:------------------------------------------------------------------
[Court approval subject to procedures of Antitrust Procedures and
Penalties Act, 15 U.S.C. 16]
-----------------------------------------------------------------------
Hon. John R. Tunheim,
United States District Judge.
Exhibit A
Feed Formulation Reports
BILLING CODE 4410-11-P
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BILLING CODE 4410-11-C
Exhibit B
Broiler Live Operations Metrics
A. Percent DOAs (6.3, 6.12, 6.17) (Completed).
B. Condemnations (5.1, 6.3, 6.10, 6.11, 6.17) (Completed).
C. Livability (6.1) (Completed).
D. Mortality (5.1, 5.8, 5.9, 5.10, 5.11, 5.12, 5.14, 5.14A, 5.14B,
5.14C, 5.15, 6.3, 6.4. 6.5, 6.5a, 6.6, 6.6a, 6.8, 6.10).
(Completed).
E. Feed Calories (1.10, 1.17, 1.17a, 4.16, 5.1, 5.16, 6.6, 6.6a,
6.7, 6.10).
F. Feed Medication Usage and Rates (5.14A, 5.14A, 5.14B, 5.14C,
5.15).
G. Animal Stocking Density (6.5, 6.5a, 6.7, 6.10) (Completed)
H. Growth Rates (6.7, 6.17) (Completed).
I. Bird Age (6.1, 6.2, 6.3, 6.5, 6.5a, 6.6, 6.7, 6.8, 6.10, 6.11,
6.16, 6.17) (Completed)
J. Hatchery--Total BTU/Chick (2.5)
K. Hatchery--Total Cost/BTU (2.5)
L. Hatchery--Electrical BTU/Chick (2.5)
M. Hatchery--Electrical K/W Hrs/Chick (2.5)
N. Hatchery--Electrical $/K/W Hours (2.5)
O. Hatchery--Gas&Oil BTU's/Chick (2.5)
P. Hatchery--Gas&Oil $/BTU's (2.5)
Q. Feed Mfg--Total BTU/Ton (3.5)
R. Feed Mfg--Total Cost/BTU (3.5
S. Feed Mfg--Electrical BTU/Ton (3.5)
T. Feed Mfg--Electrical K/W Hrs/Ton (3.5)
U. Feed Mfg--Electrical $/K/W Hours (3.5)
V. Feed Mfg--Gas&Oil BTU's/Ton (3.5)
W. Feed Mfg--Gas&Oil $/BTU's (3.5)
X. Feed Delivery--Fuel Usage (3.7a, 3.9)
Y. Live Haul--Fuel Usage (6.15)
Broiler Processing Metrics
A. Hang to Stun Time (Processing 3.19)
B. Amperage at Stun (Processing 3.19)
C. Stun to Kill Time (Processing 3.19)
D. Kill to Scald Time (Processing 3.19)
E. Time in Scalder (Processing 3.19)
F. Scalder Temp (Processing 3.19)
G. Pre-Chiller Temp (Processing 3.19)
H. Animal Temp at Chiller Exit (Processing 3.19)
I. Bleed Time Minutes (Processing 3.19)
J. Total Water Usage--Gallons per Bird for 2nd Processing
(Processing 4.4)
K. Total Water Usage--Gallons per Bird for 1st Processing
(Processing 4.4)
L. Total Water Cost--$/1000 Gallons (Processing 4.4)
M. Total Water Usage--Water Source (Processing 4.4)
N. Total Electrical Usage--Cents Per Bird (Processing 2.7)
O. Total Electrical Usage--Dollars Per 100 Kilowatt Hours
(Processing 2.7)
P. Gas and Oil Usage--Cents Per Bird (Processing 2.7)
Q. Gas and Oil Usage--BTU Per Bird (Processing 2.7)
R. Gas & Oil Usage--$/Mil BTU's (Processing 2.7)
S. Undergrade Paws--(Processing 5.21)
T. Undergrade Wings--(Processing 3.6)
U. DOA's--(Processing 3.1, 3.2) (Completed)
V. Condemnations--(Processing 2.9, 2.9a, 3.1, 3.2) (Completed)
Swine Live Metrics
A. Feed Mfg--Total BTU/Ton (3.5)
B. Feed Mfg--Total Cost/BTU (3.5
C. Feed Mfg--Electrical BTU/Ton (3.5)
D. Feed Mfg--Electrical K/W Hrs/Ton (3.5)
E. Feed Mfg--Electrical $/K/W Hours (3.5)
F. Feed Mfg--Gas&Oil BTU's/Ton (3.5)
G. Feed Mfg--Gas&Oil $/BTU's (3.5)
H. Feed Delivery--Fuel Usage (3.7a, 3.9)
I. Live Haul--Fuel Usage (9.3)
J. DOA's--(9.1)
K. Mortality--(6.10, 6.10a, 6.12, 6.13, 6.3, 6.3a, 6.4, 6.5, 6.5a,
6.8, 6.8a, 6.9, 6.98, 6.9a, 7.10, 7.10a, 7.12, 7.13, 7.3, 7.3a, 7.4,
7.5a, 7.8, 7.8a, 7.9, 7.95WF, 7.96WF, 7.97WF, 7.98, 7.99WF, 7.9a,
8.1a, 8.1b)
L. Age--(6.12, 6.13, 6.28, 6.28a, 6.28b, 6.3, 6.3a, 6.5, 6.5a, 6.8,
6.8a, 6.98, 7.12, 7.13, 7.28, 7.28a, 7.28b, 7.3, 7.3a, 7.5a, 7.8,
7.8a, 7.96WF, 7.98)
M. Medication Usage--(5.16, 6.27, 6.9a, 7.27, 7.9a)
N. Growth Rates--(6.12, 6.13, 6.26, 6.27, 6.28, 6.5, 6.5a, 6.8,
6.8a, 6.98, 7.12, 7.13, 7.26, 7.27, 7.28, 7.5a, 7.8, 7.8a, 7.96WF,
7.98)
United States District Court for the District of Minnesota
United States of America, State of Minnesota, State of
California, State of North Carolina, State of Tennessee, State of
Texas, and State of Utah, Plaintiffs, v. AGRI STATS, INC.,
Defendant.
No. 0:23-CV-03009-JRT-JFD
Competitive Impact Statement
In accordance with the Antitrust Procedures and Penalties Act, 15
U.S.C. 16(b)-(h) (the ``APPA'' or ``Tunney Act''), the United States of
America files this Competitive Impact Statement related to the proposed
Final Judgment filed in this civil antitrust proceeding.
I. Nature and Purpose of the Proceeding
On September 28, 2023, the United States filed a civil antitrust
complaint against Defendant Agri Stats, Inc. On November 6, 2023, the
States of California, Minnesota, North Carolina, and Tennessee joined
the suit through an amended complaint, followed by Texas and Utah on
November 15, 2023 through a second amended complaint (the
``Complaint''; the United States and the six Plaintiff States are
collectively referred to as ``Plaintiffs'').\26\ The Complaint alleges
that Agri Stats violated Section 1 of the Sherman Act, 15 U.S.C. 1, by
engaging in anticompetitive information sharing in three protein
markets--broiler chicken,\27\ pork, and turkey. For years, Agri Stats
recruited the nation's largest meat processors to send vast amounts of
competitively sensitive information to Agri Stats to standardize and
distribute in detailed reports on pricing, margins, inventories, and
operations. This conduct inflated prices and reduced output of broiler
chicken, pork, and turkey meat in the United States.
---------------------------------------------------------------------------
\26\ As the amendments to the complaint did not materially
change the original allegations, the operative complaint is referred
to herein as the ``Complaint.''
\27\ Broiler chickens are chickens raised for their meat.
---------------------------------------------------------------------------
On May 7, 2026, Plaintiffs filed a proposed Final Judgment and a
Stipulation and Order (both of which were corrected on May 15, 2026),
designed to remedy the loss of competition alleged in the Complaint.
See ECF 742; 748. Under the proposed Final Judgment, which is explained
more fully below, Agri Stats is: (1) prohibited from sharing any sales
reports or non-public pricing information between and among competing
protein processors, (2) prohibited from sharing most production, cost,
and labor data at the facility level between and among competing meat
processors, (3) prohibited from providing any information to competing
protein processors that is on average less than 45 days old, (4)
required to make the vast majority of its reports available to all
interested purchasers on reasonable and non-discriminatory terms, and
(5) required to create and implement an antitrust compliance program.
Additionally, the proposed Final Judgment requires the appointment of a
Monitor to oversee Agri Stats' compliance with the proposed Final
Judgment and imposes substantial penalties should Agri Stats violate
these or other provisions of the Final Judgment in the future.
Under the terms of the Stipulation and Order, Agri Stats must
comply with the provisions of the proposed Final Judgment until it is
entered by the Court or until the time for all appeals of any Court
ruling declining entry of the proposed Final Judgment has expired. On
May 18, 2026, the Court entered the Stipulation and Order. ECF 749.
The United States and Agri Stats have stipulated that the proposed
Final Judgment may be entered after compliance with the APPA. Entry of
the proposed Final Judgment will terminate this action, except that the
Court will retain jurisdiction to construe, modify, or enforce the
provisions of the proposed Final Judgment.
II. Description of Events Giving Rise to the Alleged Violations
A. Competitive Concerns Raised by Information Sharing Among Competitors
1. Increased Market Observability
The exchange of competitively sensitive information among
competitors can reduce competition and raise the risk of collusion by
increasing
[[Page 34556]]
``market observability.'' Market observability refers to the extent to
which firms can observe their competitors' strategic choices, like
changes in price, output, or other terms of dealing with customers.\28\
When information sharing reflects those strategic choices, either
directly or indirectly, it increases market observability.
---------------------------------------------------------------------------
\28\ See Merger Guidelines Sec. 2.3.B, United States Dep't of
Justice & Fed. Trade Comm'n (Dec. 18, 2023) (discussing market
observability).
---------------------------------------------------------------------------
Increased market observability through information sharing can
reduce competition in multiple ways. First, even in the absence of
collusion, market observability can reduce the intensity of competition
between firms (i.e., ``softening competition''). Second, market
observability can help sustain collusion, where there is an explicit or
tacit understanding among competitors to suppress competition.
Colluding competitors can use information sharing to determine if
members of the conspiracy have deviated from the collusive agreement,
enabling the conspirators to attempt to discipline the deviating
members (i.e., a ``monitoring and punishment'' system). Third, market
observability can lay the foundation for future collusion by making a
collusive agreement easier to implement and therefore more attractive.
Regarding the softening of competition, increased market
observability through information sharing can reduce competition by
helping firms predict how their competitors will react to competitive
strategies. For example, when companies anticipate that their price
cuts will be observed by their competitors--who may then cut prices in
response--companies may refrain from cutting prices in the first place,
factoring the mutual dependence of their businesses into their pricing
strategies. Similarly, because output and costs are closely tied to
pricing, information about companies' output, anticipated output, and
costs can allow competitors to better predict how their rivals will
price their goods. Additionally, in certain cases, information sharing
may allow companies to identify efficient production practices
implemented by their competitors. This can help less efficient firms
become more efficient, but it can also reduce the incentives for firms
to invest in innovation if competitors can quickly imitate the
efficient firm and eliminate the competitive advantage gained by
innovation.
Although information-sharing conduct should be assessed on a case-
by-case basis, certain features of an information exchange tend to
increase market observability and therefore pose greater likelihood of
reducing competition, including the following:
Competitive sensitivity: Information that helps firms learn about
competitors' strategic choices, including information related to
prices, output, or costs, is particularly likely to increase market
observability and reduce competition.
Granularity: Information that is disaggregated, particularly by
company, customer, product, or geography, is generally more likely to
increase market observability and reduce competition. However, even
aggregated information (e.g., averages), or information that is
anonymized, may increase market observability and pose risks to
competition. The competitive risk associated with granular information
should be viewed as a spectrum and should be assessed on a case-
specific basis.
Recency: Information that is recent provides greater market
observability because it more likely reflects current market dynamics
and allows firms to more effectively respond to their competitors'
strategic choices. Like granularity, the competitive risk associated
with recent information should be viewed as a spectrum and should be
assessed on a case-by-case basis. To illustrate, information that is
several months old may reflect current market dynamics when, for
example, the information relates to contracts that are renewed only
every six months or annually.
Reliability: The competitive risk of information sharing increases
when the competitors trust the accuracy of the shared information. One
way this can be accomplished is through an exchange that involves a
trusted third party who audits and discloses the sources of the data.
2. Information Asymmetry
Information sharing can affect the negotiation process between
buyers and sellers. When one side obtains information that the other
side does not, the side with more information benefits from that
information asymmetry. For example, information that provides insight
into a buyer's willingness to pay for a particular seller's product can
be important bargaining information for sellers, and information
concerning the seller's cost of producing that good can be important
bargaining information for buyers. In both cases, the information
allows the party to more accurately predict the limits of what the
counterparty will accept.
This concept also applies in situations with multiple buyers or
sellers. For example, when there are multiple sellers of a good, the
amount the buyer is willing to pay to a particular seller is directly
influenced by the pricing of other sellers. If a buyer negotiates with
one seller and knows that other sellers charge significantly less, the
buyer will be less likely to accept the first seller's price.
Similarly, if a seller knows that competing sellers are offering the
same or higher prices, it will be less likely to negotiate a lower
price.
B. Agri Stats' Anticompetitive Conduct
As alleged in the Complaint, prior to the entry of the Stipulation
and Order and filing of the proposed Final Judgment, Agri Stats'
business model consisted of collecting, standardizing, and
redistributing competitively sensitive information concerning prices,
output, costs, and profit margins among competing meat processors in
the broiler chicken, pork, and turkey industries. After auditing and
standardizing the information it collected from processors, Agri Stats
shared this information through written reports, an interactive online
portal from which processors could download and query data, and
personalized consulting services. Agri Stats presented much of this
data on a facility-by-facility and company-by-company basis, typically
ranking participating processors in order of performance. Agri Stats
usually identified each company and facility participating in each
report. Agri Stats typically shared information either weekly (where
the information was between 6 and 13 days old) or monthly (where the
information was between 30 and 60 days old).
During negotiations and when making strategic decisions, meat
processors benefited from the highly granular pricing information in
Agri Stats' Sales Reports. This pricing information was based on Agri
Stats' unique and highly granular product categorization. Agri Stats
would assign an Agri Stats product code to each processor's products
based on various specifications, such as cut, weight, packaging, and
many other variables. Each product code included the most similar
products sold by competitors. For example, Agri Stats would categorize
chicken sold in the grocery store by type of cut (e.g., boneless
chicken breast), weight, packaging, method of preservation, and other
variables, and would compare all chicken breast products meeting those
specifications produced by any participating chicken processor.
[[Page 34557]]
Sometimes Agri Stats reported product categories with as few as two
participating processors. Agri Stats' Sales Reports told a processor:
(1) how its price compared to the national average and top 25% price
for that product; (2) how much more the processor could make if it
charged the national average price; (3) how much more the processor
could make if it charged the average price of a processor in the top
25% of pricing; and (4) how the processor ranked compared to the other
processors selling that product (e.g., fifth out of six). As a result,
a processor selling below the national average and ranked toward the
bottom of companies selling that product knew it could likely
successfully implement price increases because a buyer would have few
alternatives to purchasing from the processor. Agri Stats also provided
consulting services to processors regarding its Sales Reports. The
sales consulting sessions typically involved an Agri Stats account
manager going through detailed sales information with the processor and
pointing out products and/or customers the processor should consider
for price increases.
On the other side of the negotiations, purchasers of meat, like
grocery stores and restaurants, lacked comparable information
identifying products for which they paid above the national average.
Agri Stats refused to sell its information to meat purchasers, as well
as farmers, workers, and other entities that negotiate with processors
and could have used Agri Stats' information to negotiate more
effectively. These non-meat-processor market participants were
interested in purchasing Agri Stats information, but Agri Stats refused
to sell its reports or other services to them. The information
available to these market participants through other market sources
(e.g., United States Department of Agriculture reporting) was less
granular than Agri Stats' Sales Reports and--for broiler chicken and
turkey--reported voluntarily.
Thus, the information exchanged through Agri Stats' written reports
and consulting services had many of the hallmarks of an anticompetitive
information exchange. The information Agri Stats collected, compiled,
and provided to processors was competitively sensitive, granular,
recent, reliable, and only available to one side of the market.
Competitively sensitive: The information in Agri Stats' Sales
Reports included information about competitors' prices and identified
all participants in each report. The Sales Reports and other reports
also included information related to output, costs (including
compensation paid to workers), and profit margins. Processors could use
the individualized output information to monitor companies' current
output levels and make predictions about future output. Processors
could use individualized cost information to detect output trends and
inform pricing strategies.
Granular: The information exchanged through Agri Stats was highly
granular. Information in the Sales Reports was presented at the near-
SKU level, comparing pricing of processors' individual products.\29\
Information in the other reports was presented at the facility or
company level.
---------------------------------------------------------------------------
\29\ ``SKU'' refers to ``Stock Keeping Unit'' and is a unique
code that processors use internally to identify each of their
products.
---------------------------------------------------------------------------
Recent: Agri Stats shared weekly reports, including weekly Sales
Reports, featuring information from the previous week. Agri Stats also
shared information in monthly reports that included information usually
one month in arrears (i.e., 30-60 days old).
Reliable: Agri Stats received information directly from processors'
accounting systems and then audited that information. Agri Stats also
typically required processors to submit information for all their
facilities to receive Agri Stats' reports and services. These practices
prevented processors from selectively withholding or manipulating the
information sent to Agri Stats.
Asymmetric: Agri Stats refused to sell any of the information it
exchanged to meat purchasers, workers, farmers, and others. This
created an information asymmetry in favor of the meat processors in
negotiations because there is no equivalent publicly available data
(free or by purchase) that has the detail and reliability of Agri
Stats.
C. The Competitive Effects of Agri Stats' Conduct
Agri Stats' conduct caused anticompetitive effects in the broiler
chicken, turkey, and pork markets in the United States. First, meat
processors used Agri Stats information to identify which products they
could raise prices on, but they did not use Agri Stats information to
lower prices. Similarly, processors used Agri Stats information to
monitor each other's production and future production plans. Processors
used this information to inform their own production and pricing
decisions, leading to output below competitive levels in all three of
the markets.
Processors most flagrantly used information in Agri Stats' Sales
Reports to harm competition. The Sales Reports provided highly granular
pricing information by comparing each processor's cuts of meat to
similar cuts sold by the processor's closest competitors. The sales
information informed processors which of their products were relatively
low priced compared to their competitors and identified where the
processor ranked in terms of pricing. When a processor ranked as one of
the lowest-priced processors, it knew that if it raised its price,
customers would be unlikely to resist because most competing processors
charged higher prices. Processors used the sales information
systematically to target products and customers for price increases in
all three markets.
Second, econometric evidence performed by Plaintiffs' economic
expert, Professor Marc Rysman, Ph.D., empirically confirmed that Agri
Stats' conduct harmed competition in each of the three markets. In the
broiler chicken market, Professor Rysman examined how processors used
Agri Stats' Sales Reports by comparing (1) the likelihood of price
increases on products Agri Stats indicated were relatively low priced
with (2) the likelihood of price decreases on products Agri Stats
indicated were relatively high priced. In a competitive market,
economic theory predicts that relatively high prices would decrease at
roughly the same rate as relatively low prices would increase, all
other things being equal--a phenomenon known as ``reversion to the
mean.'' Professor Rysman's regression analysis showed that processors
were nearly twice as likely to raise prices on products Agri Stats
indicated were underpriced than they were to lower prices on products
Agri Stats indicated were overpriced.\30\ This empirical evidence
confirmed documentary evidence that showed processors systematically
using Agri Stats to target prices increases while not using Agri Stats
to target price decreases.
---------------------------------------------------------------------------
\30\ Professor Rysman analyzed the top ten and bottom ten
products ranked by ``Economic Impact'' in Agri Stats' Sales Reports.
He examined the likelihood of price changes over a one month and two
month time horizon after rceiving th Agri Stats Sales Reports.
---------------------------------------------------------------------------
In addition, Agri Stats suspended its reporting of information
related to the markets for pork and turkey in response to private
antitrust litigation. Professor Rysman therefore could measure Agri
Stats' effects on prices when Agri Stats exited those markets.
Professor Rysman found that after accounting for other factors that
affect prices, pork prices fell up to 14.7% when pork processors
[[Page 34558]]
stopped participating in Agri Stats, and turkey prices decreased by up
to 13.6% when turkey processors stopped participating in Agri Stats.
Agri Stats also previously introduced and subsequently ended a program
related to reporting information on bacon. Professor Rysman's analysis
similarly found that after Agri Stats began reporting information about
bacon, bacon prices increased by over 20% and that after Agri Stats
ended its bacon reporting, bacon prices fell approximately 8.6%.
III. Explanation of the Proposed Final Judgment
The relief required by the proposed Final Judgment will remedy the
harm to competition alleged in the Complaint. The terms described below
are designed to ensure that Agri Stats ends its anticompetitive conduct
and prevent Agri Stats from engaging in the same or similar conduct in
the future.
A. Cessation of Sales Reports
Section IV of the proposed Final Judgment prohibits Agri Stats from
offering Sales Reports or providing consulting advice based on pricing
information. Agri Stats included in its Sales Reports detailed and
granular price information and designed its Sales Reports to allow
processors to use that detailed information to find opportunities to
raise prices on their products. Processors used Agri Stats' Sales
Reports systematically for decades to raise prices. Like the rest of
Agri Stats' reporting, the Sales Reports were not offered to market
participants other than processors, creating significant information
asymmetries. Because of the history of Agri Stats' anticompetitive
conduct, the United States and Plaintiff States required a full
cessation, rather than modification, of Agri Stats' Sales Reports to
remedy the significant anticompetitive effects flowing from Agri Stats'
exchange of sales information.
While Agri Stats is prohibited from offering Sales Reports,
Paragraph V.E of the proposed Final Judgment allows Agri Stats'
subsidiary, Express Markets, Inc. (``EMI''), to continue offering its
current price reporting in the same manner as it currently does. EMI's
price reports differ from Agri Stats' Sales Reports in several ways:
(1) historically, all market participants can (and many do) purchase
EMI's information, avoiding the information asymmetry between buyers
and sellers caused by Agri Stats' Sales Reports; (2) EMI presents its
information to its customers at a significantly higher level of
aggregation and does not provide facility or company-level information
for competitors; and (3) EMI does not provide participant lists or
otherwise indicate which processors' data it has included in the
reporting.
Additionally, Paragraph V.E of the proposed Final Judgment imposes
restrictions that ensure EMI cannot become a vehicle for reintroducing
Agri Stats' Sales Reports, which the proposed Final Judgment expressly
prohibits. See Paragraph V.E.6. In particular, the proposed Final
Judgment requires EMI to continue making its price reporting publicly
available for purchase by any interested party and prohibits EMI from
identifying the processors who submit pricing data. Moreover, to the
extent EMI seeks to add any new product categories to its price
reports, Paragraph V.E.2 of the proposed Final Judgment requires EMI to
provide notice and detailed information to the Monitor, the United
States, and the Plaintiff States. Any new product category in EMI's
price reporting must include at least five processors, and no
individual processor can make up more than 50% of total sales of that
category. In addition, any new product category must be requested by
customers that are not meat processors. Under Paragraph V.E.2.a.ii of
the proposed Final Judgment, the United States may object and prevent
publication if the product category does not meet these requirements.
Ultimately, the distinctions between EMI and Agri Stats reporting (and
the restrictions imposed on those respective reports) ensure that the
allowances for EMI will not diminish the efficacy of the relief secured
by the proposed Final Judgment.
B. Prohibition on Granular Data
Under the proposed Final Judgment, Agri Stats is permitted to
continue reporting non-sales information, but with significant
restrictions to ensure that reporting cannot be used in ways that are
anticompetitive. Previously, many Agri Stats reports contained granular
information at the individual facility or company level, giving
processors detailed visibility into their competitors' operations.
Paragraph IV.B.4 of the proposed Final Judgment prohibits Agri Stats,
with limited exceptions, from reporting production, cost, and labor
data specific to the facility, complex, or company level, instead
requiring Agri Stats to provide only aggregated industry averages or
industry averages by quartile. In addition, Agri Stats can no longer
report information about the number and identity of participants in a
report, nor how the processor customer ranks on specific metrics by
comparison to other participants. These prohibitions eliminate
significant anticompetitive aspects of Agri Stats reporting.
C. Public Availability
Paragraph VI.C of the proposed Final Judgment ensures that the
metrics remaining in Agri Stats reports will be made available for
purchase on reasonable and non-discriminatory terms by interested
purchasers, addressing the information asymmetry issues that were a
core feature of Agri Stats' anticompetitive information exchanges.
Paragraph VI.C.1 requires that Agri Stats must make monthly reports
available for non-meat processors to sample before Agri Stats may
charge yearly subscriptions to those non-meat processors. Paragraph
VI.C.5 prohibits Agri Stats from requiring non-meat processors to
contribute data or otherwise conditioning their purchase of Agri Stats
reports on a requirement to purchase any other product or service.
Paragraph VI.C.5 also requires Agri Stats to publicize in a conspicuous
manner on its website that its reports are publicly available for
purchase.
The proposed Final Judgment also ensures that Agri Stats cannot
price discriminate against non-meat processors in a way that would de
facto prevent public availability (and thus preserve information
asymmetry). Paragraph VI.C.4 prohibits Agri Stats from requiring report
buyers to agree to price or non-price terms that are meant to
discourage or prevent non-meat processors from purchasing reports.
Paragraph VI.C.3 prohibits Agri Stats from charging non-meat processors
a higher price than the average price paid by small meat processors
(who only have a single complex) on a report-by-report basis.
The only limited exceptions to the public availability
requirements, as memorialized in Paragraph V.B, involve information for
which evidence in the case did not indicate anticompetitive potential.
D. Data Confidentiality and Recency Restrictions
Paragraph VI.D of the proposed Final Judgment requires Agri Stats
to adhere to certain restrictions, ensuring that it maintains the
confidentiality of data. In particular, Paragraph VI.D.1 requires that
for all statistics Agri Stats reports that reflect at least 50% of the
sales for a protein segment, the statistic must contain data from at
least three processors, with no processor representing more than 70% of
the data reflected in the report. For Agri Stats reports that contain
quartile averages, Paragraph VI.D.2 requires that Agri Stats
[[Page 34559]]
ensure each quartile average is calculated from at least three
complexes in that quartile.
Paragraph VI.E requires that every statistic in an Agri Stats
report be composed of data that is at least (i) cumulatively 45 days
old on average, and (ii) in the case of data that reflects production
decisions, at least 90 days old from the time of that production
decision. The phrase ``cumulatively 45 days old on average'' reflects
that Agri Stats' reporting typically involves data from a date range
occurring between approximately 30-60 days prior to publication in a
report. Under Paragraph VI.E of the proposed Final Judgment, data for a
given month will not be included in an Agri Stats Report until the
first day of the second month after the given month (e.g., February
data will not be included in an Agri Stats Report until April 1).
Accordingly, for a report sent on April 1 that contains data from
February, that data will vary from 59 days old to 32 days old, but will
average to 45.5 days old.
These requirements, combined with public availability and the
exclusion of facility-level data, address the concern that processors
can use Agri Stats reports to effectively monitor output decisions by
their competitors and either coordinate a reduction in output or make
pricing decisions based on non-public information about competitor-
specific or industry-wide output.
E. Monitor
Section VII of the proposed Final Judgment requires that Agri Stats
be subject to an appointed Monitor selected by the United States. The
Monitor will have the power and authority to investigate and report on
Agri Stats' compliance with the terms of the Final Judgment and the
Stipulation and Order, including Agri Stats' obligations with respect
to cessation of Sales Reports, changes to its non-sales reports, data
confidentiality, restrictions on recency of data, the requirement to
make reports publicly available, and Agri Stats' antitrust compliance
program.
The Monitor will serve at Agri Stats' expense and Agri Stats must
assist the monitor in fulfilling his or her obligations. The Monitor
will have the authority to take the steps necessary to accomplish his
or her responsibilities and will provide periodic reports to the United
States and the Plaintiff States describing Agri Stats' compliance with
the terms of the Final Judgment. The Monitor will serve for seven years
unless the United States determines that a shorter period is
appropriate.
F. Compliance and Enforcement
The proposed Final Judgment also contains provisions designed to
promote compliance with and make enforcement of the Final Judgment as
effective as possible. Paragraph XII.A provides that the United States
and Plaintiff States have the right to seek additional relief from the
Court if the United States or the Plaintiff States determine that the
monitorship has failed to secure Agri Stats' compliance with the terms
of the Final Judgment or that Agri Stats has failed to use best efforts
to cooperate with and assist the Monitor in his or her duties.
Paragraph XII.B provides that the United States retains and
reserves all rights to enforce the Final Judgment, including the right
to seek an order of contempt from the Court. Under the terms of this
paragraph, Agri Stats has agreed that in any civil contempt action, any
motion to show cause, or any similar action brought by the United
States regarding an alleged violation of the Final Judgment, the United
States may establish the violation and the appropriateness of any
remedy by a preponderance of the evidence and that Agri Stats has
waived any argument that a different standard of proof should apply.
This provision aligns the standard for compliance with the Final
Judgment with the standard of proof that applies to the underlying
offenses that the Final Judgment addresses.
Paragraph XII.C provides additional clarification regarding the
interpretation of the provisions of the proposed Final Judgment. The
proposed Final Judgment is intended to remedy the loss of competition
the United States alleges that Agri Stats has caused. Agri Stats agrees
that it will abide by the proposed Final Judgment and that it may be
held in contempt of the Court for failing to comply with any provision
of the proposed Final Judgment that is stated specifically and in
reasonable detail, as interpreted in light of this procompetitive
purpose.
Paragraph XII.D provides that if the Court finds in an enforcement
proceeding that Agri Stats has violated the Final Judgment, the United
States may apply to the Court for an extension of the Final Judgment,
together with such other relief as may be appropriate. In addition, to
compensate American taxpayers for any costs associated with
investigating and enforcing violations of the Final Judgment, Paragraph
XII.D provides that, in any successful effort by the United States to
enforce the Final Judgment against Agri Stats, whether litigated or
resolved before litigation, Agri Stats must reimburse the United States
for attorneys' fees, experts' fees, and other costs incurred in
connection with that effort to enforce the Final Judgment, including
the investigation of the potential violation.
Paragraph XII.E states that the United States may file an action
against Agri Stats for violating the Final Judgment for up to four
years after the Final Judgment has expired or been terminated. This
provision is meant to address circumstances such as when evidence that
a violation of the Final Judgment occurred during the term of the Final
Judgment is not discovered until after the Final Judgment has expired
or been terminated or when there is not sufficient time for the United
States to complete an investigation of an alleged violation until after
the Final Judgment has expired or been terminated. This provision,
therefore, makes clear that, for four years after the Final Judgment
has expired or been terminated, the United States may still challenge a
violation that occurred during the term of the Final Judgment.
Finally, Section XIII of the proposed Final Judgment provides that
the Final Judgment will expire ten years from the date of its entry.
However, after seven years from the date of its entry, the Final
Judgment may be terminated upon motion to the Court and notice to Agri
Stats provided by the United States, with the consent of all
Plaintiffs, that continuation of the Final Judgment is no longer
necessary or in the public interest.
IV. Remedies Available to Potential Private Plaintiffs
Section 4 of the Clayton Act, 15 U.S.C. 15, provides that any
person who has been injured as a result of conduct prohibited by the
antitrust laws may bring suit in federal court to recover three times
the damages the person has suffered, as well as costs and reasonable
attorneys' fees. Entry of the proposed Final Judgment neither impairs
nor assists the bringing of any private antitrust damage action. Under
the provisions of Section 5(a) of the Clayton Act, 15 U.S.C. 16(a), the
proposed Final Judgment has no prima facie effect in any subsequent
private lawsuit that may be brought against Agri Stats.
V. Procedures Available for Modification of the Final Judgment
The United States, Plaintiff States, and Agri Stats have stipulated
that the proposed Final Judgment may be entered by the Court after
compliance with the provisions of the APPA, provided that the United
States has not withdrawn its consent. The APPA
[[Page 34560]]
conditions entry upon the Court's determination that the proposed Final
Judgment is in the public interest.
The APPA provides a period of at least 60 days preceding the
effective date of the proposed Final Judgment within which any person
may submit to the United States written comments regarding the proposed
Final Judgment. Any person who wishes to comment should do so within 60
days of the date of publication of this Competitive Impact Statement in
the Federal Register, or within 60 days of the first date of
publication in a newspaper of the summary of this Competitive Impact
Statement, whichever is later. All comments received during this period
will be considered by the U.S. Department of Justice, which remains
free to withdraw its consent to the proposed Final Judgment at any time
before the Court's entry of the Final Judgment. The comments and the
response of the United States will be filed with the Court. In
addition, the comments and the United States' response will be
published in the Federal Register unless the Court agrees that the
United States instead may publish them on the U.S. Department of
Justice, Antitrust Division's internet website.
Written comments should be submitted in English to:
Kate Riggs, Chief, Anti-Monopoly and Collusion Enforcement Section,
Antitrust Division, United States Department of Justice, 450 Fifth
Street NW, Washington, DC 20530, <a href="/cdn-cgi/l/email-protection#622336304c3217000e0b014f210d0f0f070c16114f36170c0c071b4f2301164f2f20221711060d084c050d14"><span class="__cf_email__" data-cfemail="420316106c1237202e2b216f012d2f2f272c36316f16372c2c273b6f0321366f0f00023731262d286c252d34">[email protected]</span></a>.
The proposed Final Judgment provides that the Court retains
jurisdiction over this action, and the parties may apply to the Court
for any order necessary or appropriate for the modification,
interpretation, or enforcement of the Final Judgment.
VI. Alternatives to the Proposed Final Judgment
As an alternative to the proposed Final Judgment, the United States
considered proceeding to trial on the merits against Agri Stats. The
United States could have continued the litigation and, upon a finding
of liability, sought injunctive relief against Agri Stats'
anticompetitive conduct. The United States is satisfied, however, that
the relief required by the proposed Final Judgment will remedy the
anticompetitive effects alleged in the Complaint. Thus, the proposed
Final Judgment achieves all or substantially all the relief the United
States would have obtained through litigation without the time,
expense, and uncertainty of a full trial on the merits.
VII. Standard of Review Under the APPA for the Proposed Final Judgment
Under the Clayton Act and APPA, proposed Final Judgments, or
``consent decrees,'' in antitrust cases brought by the United States
are subject to a 60-day comment period, after which the Court shall
determine whether entry of the proposed Final Judgment ``is in the
public interest.'' 15 U.S.C. 16(e)(1). In making that determination,
the Court, in accordance with the statute as amended in 2004, is
required to consider:
(A) the competitive impact of such judgment, including
termination of alleged violations, provisions for enforcement and
modification, duration of relief sought, anticipated effects of
alternative remedies actually considered, whether its terms are
ambiguous, and any other competitive considerations bearing upon the
adequacy of such judgment that the court deems necessary to a
determination of whether the consent judgment is in the public
interest; and
(B) the impact of entry of such judgment upon competition in the
relevant market or markets, upon the public generally and
individuals alleging specific injury from the violations set forth
in the complaint including consideration of the public benefit, if
any, to be derived from a determination of the issues at trial.
15 U.S.C. 16(e)(1)(A) & (B). In considering these statutory
factors, the Court's inquiry is necessarily a limited one as the
government is entitled to ``broad discretion to settle with the
defendant within the reaches of the public interest.'' United States v.
Microsoft Corp., 56 F.3d 1448, 1461 (D.C. Cir. 1995); United States v.
Associated Milk Producers, Inc., 534 F.2d 113, 117 (8th Cir. 1976)
(``It is axiomatic that the Attorney General must retain considerable
discretion in controlling government litigation and in determining what
is in the public interest.''); United States v. U.S. Airways Grp.,
Inc., 38 F. Supp. 3d 69, 75 (D.D.C. 2014) (explaining that the
``court's inquiry is limited'' in Tunney Act settlements); United
States v. InBev N.V./S.A., No. 08-cv-1965, 2009 U.S. Dist. LEXIS 84787,
at *3 (D.D.C. Aug. 11, 2009) (stating that a court's review of a
proposed Final Judgment is limited and only inquires ``into whether the
government's determination that the proposed remedies will cure the
antitrust violations alleged in the complaint was reasonable, and
whether the mechanisms to enforce the final judgment are clear and
manageable'').
As the U.S. Court of Appeals for the District of Columbia Circuit
has held, under the APPA a court considers, among other things, the
relationship between the remedy secured and the specific allegations in
the government's Complaint, whether the proposed Final Judgment is
sufficiently clear, whether its enforcement mechanisms are sufficient,
and whether it may positively harm third parties. See Microsoft, 56
F.3d at 1458-62. With respect to the adequacy of the relief secured by
the proposed Final Judgment, a court may not ``make de novo
determination of facts and issues.'' United States v. W. Elec. Co., 993
F.2d 1572, 1577 (D.C. Cir. 1993) (quotation marks omitted); see also
Microsoft, 56 F.3d at 1460-62; United States v. Alcoa, Inc., 152 F.
Supp. 2d 37, 40 (D.D.C. 2001); United States v. Enova Corp., 107 F.
Supp. 2d 10, 16 (D.D.C. 2000); InBev, No. 08-cv-1965, 2009 U.S. Dist.
LEXIS 84787, at *3. Instead, ``[t]he balancing of competing social and
political interests affected by a proposed antitrust decree must be
left, in the first instance, to the discretion of the Attorney
General.'' W. Elec. Co., 993 F.2d at 1577 (quotation marks omitted).
``The court should also bear in mind the flexibility of the public
interest inquiry: the court's function is not to determine whether the
resulting array of rights and liabilities is the one that will best
serve society, but only to confirm that the resulting settlement is
within the reaches of the public interest.'' Microsoft, 56 F.3d at 1460
(quotation marks omit
[…truncated; see source link]Indexed from Federal Register on June 5, 2026.
This is legal information, not legal advice. Laws vary by jurisdiction and change frequently. Always verify current law with official sources and consult a licensed attorney in your jurisdiction for advice on your specific situation.