990515 IBP Beef Pricing Suit Goes Ahead

Lincoln, NE -- A lawsuit accusing the nation's largest meatpacker of using unfair practices to control the price of beef has been cleared to proceed by a federal judge.

The ruling from U.S. District Judge Lyle Strom means that 10 cattlemen can try to prove that IBP Inc. engages in illegal practices. The class-action lawsuit includes all producers who sold cattle for slaughter to IBP since February 1994.

The cattle owners filed suit two years ago, claiming that Dakota City-based IBP colluded with other meatpackers to restrain competition and control prices.

IBP controls more than a third of the U.S. beef packing industry and last year processed more than 14 billion pounds of beef and pork. The company's sales last year totaled $12.8 billion.

The lawsuit contends IBP is violating antitrust laws by using large purchases of captive supplies of cattle -- rather than bidding on open auction markets -- to unfairly depress prices paid to producers.

IBP has argued that an oversupply of beef and limited access to foreign markets are to blame for low livestock prices.

Gary Mickelson, a spokesman for IBP, said he had not seen the ruling and could not comment on specific allegations.

“It makes no sense for us to do anything to hurt cattle producers when we depend upon them to supply our plants,” he said.

Sens. Bob Kerrey, D-Neb., and Tom Daschle, D-S.D., have introduced legislation that would require mandatory price reporting and increase access to domestic and foreign markets.

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