Image: Attorney General William Barr, center, stands in Lafayette Park across from the White House as demonstrators gather to protest the death of George Floyd, Monday, June 1, 2020, in Washington. Floyd died after being restrained by Minneapolis police officers. (AP Photo/Alex Brandon). The United States Department of Justice, which Barr heads, successfully obtained four indictments of chicken company executives for price fixing to take advantage of the Chinese Coronavirus panic.
Conroe, Austin, Wheat Ridge (Colorado), June 4 – A federal grand jury in Wheat Ridge, Colorado, indicted four chicken company executives for price fixing to cause the price of meat to be so high during the Chinese Coronavirus panic.
Meanwhile, Montgomery County’s “curve” of active COVID-19 cases remains flat with 458 active cases, 26 fatalities, and 549 full recoveries from the illness.
Governor Abbott Announces Phase III To Open Texas
Texas Governor Greg Abbott yesterday announced the third phase of the State of Texas’ plan to safely open the economy while containing the spread of COVID-19. Under Phase III, effective immediately, all businesses in Texas will be able to operate at up to 50% capacity, with very limited exceptions. Business that previously have been able to operate at 100% capacity may continue to do so, and most outdoor areas are not subject to capacity limits. All businesses and customers should continue to follow minimum standard health protocols laid out by the Texas Department of State Health Services (DSHS).
As with previous phases, the Phase III plan is based on the advice and support of the four doctors on the Strike Force to Open Texas medical team. Via Executive Order, Phase III begins immediately. A breakdown of Phase III can be found below.
“The people of Texas continue to prove that we can safely and responsibly open our state for business while containing COVID-19 and keeping our state safe,” said Governor Abbott. “As anticipated, the new positive cases that we are seeing are largely the result of isolated hot spots in nursing homes, jails, and meat packing plants. Thanks to the effectiveness of our Surge Response Teams, we have the ability to contain those hot spots while opening up Texas for business. As we begin Phase III, I ask all Texans and Texas businesses to continue following the standard health protocols and to heed the guidance of our state and federal officials who continue to closely monitor COVID-19. If we remain vigilant, we will continue to mitigate the spread of this virus, protect public health, and get more Texans back to work and their daily activities.”
Between May 26th and June 2nd, over 45% of new cases came from jails or prisons, meat packing plants and nursing homes. There are currently 1,487 Texans hospitalized due to COVID-19. There are 20,679 active cases in the state and 45,858 Texans are estimated to have recovered.
Effective June 3:
All businesses currently operating at 25% capacity can expand their occupancy to 50% with certain exceptions.
Bars and similar establishments may increase their capacity to 50% as long as patrons are seated.
Amusement parks and carnivals in counties with less than 1,000 confirmed positive cases may open at 50% capacity.
Restaurants may expand their maximum table size from 6 to 10 persons.
Effective June 12:
Restaurants may expand their occupancy levels to 75%.
Counties with 10 or less active COVID-19 cases may expand their occupancy limits to 75%. Counties that fit this category but have not previously filed an attestation with DSHS will need to do so.
Effective June 19:
Amusement parks and carnivals in counties with more than 1,000 confirmed positive cases of COVID-19 may open at 50% capacity.
Special provisions have been made for outdoor gatherings, such as Fourth of July celebrations, but it is imperative that local officials and public health officials collaborate on safe standards. These provisions are included in the Governor’s Executive Order.
All businesses should continue to follow the minimum standard health protocols from DSHS.
Pilgrim’s Pride CEO among indicted for chicken price fixing
The U.S. Department of Justice said a federal grand jury in Colorado found that executives from Greeley, Colorado-based Pilgrim’s Pride and Claxton, Georgia-based Claxton Poultry Farms conspired to fix prices and rig bids for broiler chickens from at least 2012 to 2017.
Pilgrim’s Pride President and CEO Jayson Penn was charged, along with former Pilgrim’s Pride Vice President Roger Austin. Claxton Poultry President Mikell Fries and Vice President Scott Brady also were charged.
All four men are scheduled to appear before a magistrate judge in Denver federal court Thursday afternoon, according to court documents. The Associated Press left phone and email messages seeking comment with Pilgrim’s Pride. A spokesman for Claxton Poultry said the company had no comment.
The charges come amid questions about the high price of meat during the coronavirus pandemic.
Last month, attorneys general for 11 Midwestern states urged the Justice Department to investigate potential price fixing by meatpackers. And in an April tweet, Agriculture Secretary Sonny Perdue confirmed that the Department of Agriculture was investigating why ranchers are getting low prices for cattle while U.S. consumers are paying record prices for beef.
Wednesday’s charges were the first in a long-running investigation into price-fixing in the chicken industry. Broiler chickens are chickens raised for human consumption and sold to grocery stores and restaurants.
According to prosecutors, the men communicated about their prices and negotiated to fix, stabilize and raise prices. The indictment cites a number of alleged phone calls and text exchanges between them.
In one text exchange, Brady allegedly told Fries on Nov. 13, 2012 that he had talked to Austin and found out that Pilgrim’s Pride was 3 cents higher on an eight-piece bone-in broiler chicken. Brady said Austin wanted Claxton to raise its prices.
“Tell him we are trying!” Fries responded, according to the indictment.
In November 2014, Penn allegedly sent a series of emails about a competitor who was selling its chickens for less and asked to buy birds from Pilgrim’s to cover a shortfall in a grocery contract. Penn allegedly said the company should have to pay for not being able to provide the promised number of chickens.
“It costs money for them to fill orders for which they don’t have the chickens. They have been adding market share and still trying to do — selling cheap chicken and being short. Doesn’t make sense. We are enabling the town drunk by giving him beer for Thanksgiving instead of walking him into an AA meeting,” Penn wrote, according to the indictment.
Pilgrim’s Pride is a division of JBS USA, the U.S. subsidiary of Brazilian meat production giant JBS SA. Pilgrim’s Pride has more than 54,000 employees and 36 production facilities in the U.S. and abroad. The company says it processes one of every five chickens in the U.S. Claxton Poultry has 2,000 employees and supplies 300 million pounds of chicken per year to customers include Chick-fil-A.
The Justice Department indicated the investigation was ongoing last summer when it asked for a temporary pause in discovery proceedings in a separate lawsuit accusing Pilgrim’s Pride, Tyson Foods and others of fixing poultry prices. At the time, the Justice Department said it wanted to protect an ongoing grand jury investigation.
That suit, filed by New York-based Maplevale Farms, said companies shared information through a third-party data firm and restricted supply by destroying breeder hens on several occasions. It’s one of nearly 40 lawsuits filed by grocers, restaurants and others alleging price fixing. Kroger, Walmart and Darden Restaurants — which owns Olive Garden — are among those who have sued.
The Federal Bureau of Investigation and the Department of Commerce assisted in the investigation, the Justice Department said.
“Particularly in times of global crisis, the (Justice Department’s antitrust) division remains committed to prosecuting crimes intended to raise the prices Americans pay for food,” Assistant Attorney General Makan Delrahim said in a statement.
The executives could each face 10 years in prison and a $1 million fine.
Pilgrim’s Pride Corp. shares tumbled more than 12% Wednesday. Tyson Foods Inc. shares ended down almost 4%.