010556 USDA Investigates “Unjust” Cattle Buying by Packer

Wichita, KS - A battle is taking shape over whether a meatpacking company broke the law when it quit buying cattle from a feedlot after one of its managers criticized the packer in a livestock journal.

The U.S. Department of Agriculture contends Farmland National Beef Packing Co. engaged in unjust practices when it cut back its purchases of cattle from the Callicrate Cattle Company Feedyard in St. Francis, Kan. An administrative hearing is being held in the case.

The complaint alleges Farmland routinely bought cattle at the feedlot, owned by Mike Callicrate, from 1986 to 1998. But a farmland buyer told Callicrate that the meatpacker had reservations about doing business with the feedlot, because a Callicrate manager had criticized Farmland in a livestock journal article, the USDA said.

After that discussion, Farmland stopped routinely buying cattle from Callicrate, the USDA said. In the first six months of 1999, it bought cattle at the feedlot only during three weeks, the agency said.

If the allegations are true, the USDA contends that Farmland violated the Packers and Stockyards Act of 1921.

Farmland denied the allegations, saying it expected to prevail at the hearing.

“Farmland National Beef has not discriminated against or boycotted Callicrate Feedlot and the facts do not support a claim of discrimination or retaliation by Farmland National Beef,” said Farmland spokeswoman Sarah Schmidt.

The USDA has been under increasing pressure to curb anti-competitive practices in the livestock, meatpacking and poultry industries since a General Accounting Office report last year said the agency has not fully exercised its authority in that area.

Farmland, one of the nation's biggest meatpackers, is a partnership of Farmland Industries Inc., based in Kansas City, Mo., and U.S. Premium Beef Ltd.

Callicrate is confident about his success at the hearing.

“We'll win this case,” he said.

In July 1996, Callicrate joined a handful of cattlemen in suing the nation's largest meatpacker, alleging that IBP Inc. illegally cornered the beef market and conspired to fix prices. That suit has languished in the Alabama courts.

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