Pickett vs. Tyson Appeal Decision

[MikeC]

11th Circuit Court of Appeals
Pickett vs. Tyson

Page 12:"Pickett contends he has established unfairness and price control or manipulation under the PSA by proving that Tyson's marketing agreements caused the cash-market, and the overall price, for cattle to be lower than it otherwise would be. If that were all Pickett were required to prove he might win, because there was evidence at trial to the jury's finding that the use of marketing agreements has resulted in lower prices for cattle both on the cash market and the market as a whole."

(Taylor was obviously correct)

Page 13: "Pickett must establish more than the use of marketing agreements have decreased the price of cattle. He must establish that their use has adversely affected competition, which requires showing that marketing agreements have no pro-competitive justifications."



The appeals court upheld the Judges decision to reverse the jury's findings and the $1.28 BILLION verdict against Tyson.

Bottom line to me. PSA should not have been used in this case. A plain old swindling charge would have held up.

 

[Econ101]

I actually read the court's decision on the Pickett case. I have a few questions about the case that someone who has knowledge about it would know.

The court acknowledged that the pens of cattle in the cash market were of a different grade. The cash cattle tended to be more on the prime side instead of the choice side. The judges said that Tyson would pay more for the choice side in their captive supplies because that is what their customers wanted. In their marketing agreements called captive supply did they pay more for choice cattle? Forgive me but I thought prime cattle brought more money per lb. Prime rib is sure more expensive than choice on the retail level. Is there an inconsistency here? Thanks for answering

 

[MikeC]

I actually read the court's decision on the Pickett case. I have a few questions about the case that someone who has knowledge about it would know.

The court acknowledged that the pens of cattle in the cash market were of a different grade. The cash cattle tended to be more on the prime side instead of the choice side. The judges said that Tyson would pay more for the choice side in their captive supplies because that is what their customers wanted. In their marketing agreements called captive supply did they pay more for choice cattle? Forgive me but I thought prime cattle brought more money per lb. Prime rib is sure more expensive than choice on the retail level. Is there an inconsistency here? Thanks for answering

Actually Tyson said they preferred "High Yielding" cattle above "Quality Grade".

Quote from decision;
"It [Tyson] is a volume meat dealer; it's largest customers are are supermarket chains. To provide for it's customers in the most inexpensive and efficient way, Tyson prefers large, high-yielding cattle to high quality cattle."

Tyson slaughters approx 35,000 head per DAY.
**********************************
In answer to your captive supply question. Some of those cattle were sold on the grid which would have brought more money than cash cattle.

 

[Jake]

I actually read the court's decision on the Pickett case. I have a few questions about the case that someone who has knowledge about it would know.

The court acknowledged that the pens of cattle in the cash market were of a different grade. The cash cattle tended to be more on the prime side instead of the choice side. The judges said that Tyson would pay more for the choice side in their captive supplies because that is what their customers wanted. In their marketing agreements called captive supply did they pay more for choice cattle? Forgive me but I thought prime cattle brought more money per lb. Prime rib is sure more expensive than choice on the retail level. Is there an inconsistency here? Thanks for answering

Actually Tyson said they preferred "High Yielding" cattle above "Quality Grade".

Quote from decision;
"It [Tyson] is a volume meat dealer; it's largest customers are are supermarket chains. To provide for it's customers in the most inexpensive and efficient way, Tyson prefers large, high-yielding cattle to high quality cattle."

Tyson slaughters approx 35,000 head per DAY.
**********************************
In answer to your captive supply question. Some of those cattle were sold on the grid which would have brought more money than cash cattle.

but quite honestly, who gives a **** about what tyson wants? isn't it the consumer that matters?

 

[Econ101]

Companies are always using someone else for an excuse. My kids do it all the time and they are quite good at it. We must not look at the reply that someone else makes one do something that is illegal; that is not a defense. We must look at what the excuse is and discern its viability.

 

[MikeC]

I actually read the court's decision on the Pickett case. I have a few questions about the case that someone who has knowledge about it would know.

The court acknowledged that the pens of cattle in the cash market were of a different grade. The cash cattle tended to be more on the prime side instead of the choice side. The judges said that Tyson would pay more for the choice side in their captive supplies because that is what their customers wanted. In their marketing agreements called captive supply did they pay more for choice cattle? Forgive me but I thought prime cattle brought more money per lb. Prime rib is sure more expensive than choice on the retail level. Is there an inconsistency here? Thanks for answering

Actually Tyson said they preferred "High Yielding" cattle above "Quality Grade".

Quote from decision;
"It [Tyson] is a volume meat dealer; it's largest customers are are supermarket chains. To provide for it's customers in the most inexpensive and efficient way, Tyson prefers large, high-yielding cattle to high quality cattle."

Tyson slaughters approx 35,000 head per DAY.
**********************************
In answer to your captive supply question. Some of those cattle were sold on the grid which could have brought more money than cash cattle.

but quite honestly, who gives a be nice what tyson wants? isn't it the consumer that matters?

If you are selling directly to the customer you are exactly correct! But, if you sell to a sale barn or order buyer, odds are that your cattle are going to a packer such as Tyson and they will be the one who purchases your cattle. Tyson alone purchases about 40% of the cattle for slaughter at present in the U.S. Probably a higher percentage in Canada.

I'm not saying we should answer to every whim Tyson comes up with, quite the contrary. But the ones who will be paid the premiums are the ones who have the cattle that they want.

Feedlots and packers are collecting data at a scary rate now on who has the type cattle they want. We will be on the bottom of the totem pole if we don't meet their specs.

 

[Jake]

We will be on the bottom of the totem pole if we don't meet their specs.

Aren't we already?