Tyson ruling may take years to affect market

How big is the verdict against Tyson Fresh Meats Inc., the nation's largest beef packer? Potentially, mighty big, perhaps even more far-reaching than the $1.28 billion amount of the damages awarded to cattlemen Tuesday by a federal court jury in Alabama. But it could take years to find out for sure.

"There will be appeals and appeals and more appeals," said Norman Timmerman, who heads operations at the Timmerman & Sons Feedlot between Indianola and McCook. "It may all be settled during my lifetime. We'll just have to wait and see," he said.

It depends on who you talk to about the need, and effect, of the verdict.

Mike Callicrate of St. Francis, who was one of six cattlemen who filed the suit against IBP Inc. in 1996, said he felt "relief and joy" when he heard the verdict in the class-action lawsuit. "This has been a long, hard battle for eight years," said Callicrate.

So what does the verdict mean? If upheld on appeal, the billion dollar plus damage amount means that up to 30,000 cattlemen nationwide will share class action settlements. For those who have sold $100,000 worth on cattle on contracts to IBP -- and its successor, Tyson -- the settlement amount could be between $3,000 and $4,000 each.

But, to the cattlemen involved, even more important could be the effect that the verdict has on contracted purchases of cattle. Those opposed to contract buying say meat packers buy cattle on the open market when the market is weak. Then, when the market gets stronger, the packers leave the market, relying instead on cattle they have previously contracted.

As large as Tuesday's settlement was, it could be just the first step in actions taken by cattlemen and the courts. Separate suits are pending against Excel Corp. and Swift & Co., the nation's second and third largest beef producers.

Another important follow-up to the verdict will be whether the court issues an order restricting contracts. If that happens, the ripple effect will have a huge impact on the poultry and pork industries as well.

Callitrate, who operates feed yards in Kansas and Colorado, called the verdict a rewarding conclusion to eight years of lobbying against the use of marketing agreements. But the ruling doesn't change anything. "We'll continue working to reduce the dominance of the nation's largest packers," he said.

"I want to see a breakup of these packers, and I want to see a lot more diverse food system, not a system dependent upon a handful of companies who control the food supply and dictate the price to the consumer," Callitrate said.

That may seem like a huge undertaking, but Callitrate and five other cattlemen have already shown they can hold their own in battles with the most powerful meat packers in the nation.

Stay tuned. The court battle between the meat packers and America's cattlemen has been going on for eight years, but it appears we are still in the early stages of this epic -- and potentially economy-changing -- confrontation.