USDA Consigns IBP Monopoly
Case To Federal Court Arena

WASHINGTON —(AP)— A federal court, not the Agriculture Department, is the right place for cattle producers to pursue claims that the nation's biggest meat packer engages in monopolistic practices, Agriculture Secretary Dan Glickman says.

Even though the department has an antitrust division that regulates packers and stockyards, legal documents filed on Glickman's behalf said the court in Montgomery, Ala., should hear the case against IBP Inc.

"There can be no question that (the cattlemen) have selected the proper, and only, forum open to them," the Glickman brief says.

The producers who are suing IBP and attempting to represent the class of all cattlemen said last week that Glickman's stance was a significant victory that should allow the case to go forward.

"It's swinging our way, big time," said Mike Callicrate, a plaintiff who runs a feedlot in St. Francis, Kan. "The stand taken by the secretary gives us hope."

The lawsuit contends that Dakota City, Neb.-based IBP is violating antitrust laws by using large purchases of captive supplies of cattle — rather than bidding on open markets — to unfairly depress prices paid to producers.

IBP controls more than a third of U.S. beef packing and last year processed more than nine billion pounds of beef and pork. The company's sales last year totaled $13.2 billion.

In a written statement, IBP said it was "disappointed but not surprised" at Glickman's comments and contended that the secretary "abdicated his responsibility" by deferring to an Alabama judge.

"We will continue to work to ensure the judge gets the benefit of advice the department failed to provide here," the company statement said.

The cattlemen's lawsuit asks U.S. District Judge Harold Albritton to force IBP to bid for cattle on open markets and order the company to pay unspecified monetary damages. Last month, Albritton asked Glickman whether such a case should be brought first to USDA.

In a 27-page brief filed last week, Glickman's lawyers said that changes made in 1976 to a 77 year-old law regulating packers make it clear that the courts have jurisdiction over such cases, not the agency.

In addition, Glickman said the law gives Albritton authority to order a packer such as IBP to stop monopolistic practices, if any are found.

Now, Albritton must decide whether the case should be certified as a class action on behalf of all independent cattle producers nationwide. Glickman took no position on that question.