Herman Schumacher vs.
July 7, 2009 Billings, Mont. – Herreid, S.D., rancher and cattle feeder Herman Schumacher has suffered losses exceeding $260,000 from the sale of three pens of cattle (984 head) sold to Tyson Fresh Meats Inc. (Tyson) since January 1, 2009, yet Schumacher’s three pens of cattle were top performers. His 984 cattle gained an average of 459 pounds in just 136 days, representing an average daily gain of 3.37 pounds. Schumacher lost an average of over $265 per animal when he sold his cattle to Tyson, which resulted in a total loss to Schumacher of nearly $261,000.
July 1, 2009 Billings, Mont. – While meatpacker giant Tyson Fresh Meats (Tyson) continues its legal action to seize the home of Herreid, S.D., rancher Herman Schumacher, consumers pay near record beef prices and cattle ranchers like Schumacher receive below cost-of-production prices for their cattle.
June 29, 2009 Billings, Mont. – In response to R-CALF USA’s request that Tyson Fresh Meats (Tyson) immediately withdraw its judgment against South Dakota rancher and cattle feeder Herman Schumacher, as well as withdraw its legal action to seize Schumacher’s home, Tyson Foods Executive Vice President-Corporate Affairs Archie Schaffer informed R-CALF USA today that Tyson intends to donate the proceeds extracted from Schumacher to local food banks in South Dakota.
June 27, 2009 Billings, Mont. – On the day R-CALF USA conducted its June 26, 2009, news conference before a crowd of about 150 in the small town of Herreid, S.D., to highlight Tyson Fresh Meat’s (Tyson’s) seizure of the home of Herreid, S.D., rancher and cattle feeder Herman Schumacher, Tyson faxed R-CALF USA a complaint letter.
June 22, 2009 News Conference
What: R-CALF USA news conference to address seizure of Herman Schumacher’s home by the U.S. Marshals Service in reference to cattle price manipulation case against Tyson Fresh Meats
The news conference will highlight the ongoing injustice against Schumacher; will demonstrate that the Administration, Congress and the U.S. judicial system have utterly failed to protect the safety and security of our nation’s food supply; and, will reveal that the concentrated beef packing industry has accumulated such untouchable power that it can freely engage in anticompetitive and antitrust behavior to drive family farmers and ranchers from the U.S. cattle industry by the tens of thousands each year.
When: 1 p.m. CDT on Friday, June 26, 2009
Where: Front lawn of the Herman Schumacher residence, 102 6th Ave. NW, Herreid, S.D.
Who: R-CALF USA
Co-Founder Herman Schumacher, lead plaintiff
Background: Directed by a court order obtained by Tyson Fresh Meats Inc. (Tyson), the U.S. Marshals Service on June 11, 2009, posted a “No Trespassing” sign and “Warning” on the front door (or PDF) of the home of South Dakota rancher and cattle feeder Herman Schumacher. Tyson obtained a judgment against Schumacher because Schumacher tried to protect his fellow cattle producers by stopping Tyson from violating the Packers and Stockyards Act. A federal jury unanimously sided with Schumacher, but then a three-judge panel for the 8th U.S. Circuit Court of Appeals (8th Circuit) overturned the jury’s decision. So, in a bizarre twist, Schumacher must now pay Tyson $15,881.38 or Tyson will use the U.S. judicial system to finalize the seizure of Schumacher’s home.
“This retaliatory action against Schumacher, who courageously did what USDA (U.S. Department of Agriculture) was supposed to do but refused to do, is an extreme injustice,” said R-CALF USA President/Region VI Director Max Thornsberry. “We cannot sit back and allow Tyson to intimidate U.S. cattle producers and destroy our markets. R-CALF USA is sponsoring this news conference to help protect Schumacher’s property against Tyson’s advances, as well as to highlight the urgent need to end – once and for all – the market-manipulating practices of the four largest packers who together control approximately 88 percent of the U.S. fed cattle market.”
USDA is responsible for the enforcement of the Packers and Stockyards Act of 1921 (PSA), which was established to protect family farmers and ranchers against unfair and deceptive practices by the highly concentrated meatpackers. In 2006, both the Office of Inspector General (OIG) and the U.S. Government Accountability Office (GAO) found that USDA had failed for nearly a decade to properly enforce the PSA. As a result, anticompetitive practices and anti-trust actions by the concentrated meatpackers have gone unrestrained, causing hundreds of thousands of cattle producers to exit the industry.
During the prolonged non-enforcement of the PSA, USDA implemented a new price reporting requirement, but made a horrendous mistake. Over a six-week period, from April 2, 2001, to May 11, 2001, USDA miscalculated beef values and underreported those values to the public. It was widely believed that Tyson and the other two largest meatpackers – Cargill Meat Solutions, d/b/a Excel Corporation (Excel), and Swift & Co. (Swift), now JBS Swift – knew that beef values were being underreported and were purposely underbidding the actual value of cattle. Prices paid for Schumacher’s and other cattle feeders’ cattle were forced lower during this period, causing producers to lose millions of dollars in income. USDA refused to take any action to correct this injustice.
But Schumacher and two other cattle feeders, Mike Callicrate and Roger Koch, stepped to the plate in 2002 to do what USDA refused to do – they filed a lawsuit to enforce producers’ rights under the PSA. They did this as a class action case to ensure that every U.S. producer harmed by the packers could recover their lost income. And they won! The federal judge in the case stated in 2006: “The jury carefully found that defendants (Tyson, Excel, and Swift) knew of the USDA reporting errors on April 24, 2001, and took advantage of such knowledge thereafter…There is no dispute that the jury found defendants liable for damages for violations of the Packers and Stockyards Act.” The jury awarded $9.25 million to the class of cattle producers harmed by the packers. Schumacher estimated that he and the other cattle feeders in the class would each receive about $40 for each head of cattle sold while the packers were driving cattle prices lower.
Tyson, Excel and Swift quickly appealed the jury’s unanimous decision to the 8th Circuit in hopes of circumventing Schumacher’s enforcement of the PSA against them. On Jan. 29, 2008, the 8th Circuit sided with the packers and overturned the jury’s unanimous verdict. The 8th Circuit did not dispute the jury’s findings that the packers had violated the provisions of the PSA. Instead, the court decided it wasn’t enough for Schumacher to prove that the packers had committed actions prohibited by the PSA. The 8th Circuit overturned the jury’s verdict on the basis that “a plaintiff (Schumacher, Callicrate and Koch) must show that a packer intentionally committed unlawful conduct.”
Armed with this shocking 8th Circuit decision, Tyson moved swiftly to retaliate against Schumacher by seeking an order to force Schumacher to pay Tyson’s court costs. Tyson succeeded and initiated the action that has resulted in the U.S. Marshal’s postings on Schumacher’s front door. Similar legal action is now anticipated by Excel and Swift against plaintiffs Callicrate and Koch.
“Our markets are broken, USDA is too scared to force the monolithic packers to abide by the law and Congress refuses to act while hundreds of thousands of family farmers and ranchers exit our industry, which is putting our nation’s food safety and food security at risk,” Thornsberry pointed out. “The packers are now using our court system to circumvent prohibitions against anticompetitive practices and to punish courageous producers like Schumacher who are only trying to protect themselves and their fellow cattle producers from being completely controlled by the concentrated packers. Enough is enough, and it’s time for both consumers and cattle producers to put our cattle industry on a new course.
“R-CALF is calling on both consumers and producers to help protect Schumacher, Callicrate and Koch from the packers’ retaliatory actions and to help R-CALF USA step up the fight to convince Congress and the new Administration to follow through with their promises to restore competition to our U.S. cattle market,” he concluded. “This is going to take four to five years to accomplish, but we must get started today. It is clear that unless cattle producers and consumers step up right now to initiate needed changes, no one else will.”
This recent action by the U.S. Marshals Service demonstrates that family farmers and ranchers – our U.S. food producers – have no means of protecting either their livelihoods or their industry against the anticompetitive and antitrust actions of the packers that continue to drive food-producer prices well below sustainable levels. Producers have sought relief from both the Administration and from Congress, but to no avail. And, producers and R-CALF USA have sought relief in the judicial system where, in three recent cases, they have won their cases before fact-finding juries and district court judges only to have their victories quashed by appellant courts that consistently side with the packers.
Meanwhile, U.S. cattle producers are exiting the U.S. cattle industry by the tens of thousands each year, and consumers are continuing to pay at or near record beef prices while prices paid to cattle producers have fallen well below the cost of production. This spring, while cattle producers lost hundreds of dollars on each head of cattle sold, the share of the consumer’s beef dollar paid to the cattle producer has fallen to the lowest level since the third quarter of 2002, the year when cattle prices were severely depressed. The U.S. cattle industry is fast losing the critical mass of independent producers necessary to ensure the safety and security of the U.S. beef supply.
Anyone who wishes to support R-CALF USA’s efforts to end the injustices against U.S. cattle producers by putting a stop to the packers’ anticompetitive practices and antitrust actions can send their donations to:
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R-CALF USA (Ranchers-Cattlemen Action Legal Fund, United Stockgrowers of America) is a national, non-profit organization dedicated to ensuring the continued profitability and viability of the U.S. cattle industry. R-CALF USA represents thousands of U.S. cattle producers on trade and marketing issues. Members are located across 47 states and are primarily cow/calf operators, cattle backgrounders, and/or feedlot owners. R-CALF USA directors and committee chairs are extremely active unpaid volunteers. R-CALF USA has dozens of affiliate organizations and various main-street businesses are associate members. For more information, visit www.r-calfusa.com or, call 406-252-2516.
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This page was last updated on Wednesday, October 12, 2011.