July 25, 2023

 

US court concludes Agri Stats' reports not proof of conspiracy with US broiler producers to control prices

 

 

A US court had found on June 30 that the benchmarking reports of Agri Stats, an industry data service firm,  are not evidence of a conspiracy among Agri Stats and broiler chicken producers in the United States to reduce output or increase price.

 

The decision marks an important victory for the company and the use of benchmarking reports to reduce costs and improve the efficiency of broiler chicken production in the US.

 

Agri Stats was founded in 1985 in Fort Wayne, Indiana, and provides benchmarking reports for protein producers, including those in the broiler chicken industry. The company aggregates and analyses data provided by protein producers and publishes the data in reports that allow producers to compare their performance against industry averages and identify areas for improvement.

 

Subscribing producers use the reports to identify specific opportunities for cost reduction, productivity enhancement and quality improvement, helping subscribers stay competitive protein industries.

 

In Agri Stats' first 35 years of existence, per capita output of boneless skinless chicken breast has increased by six times while price per pound has plummeted from US$3.63/lb. to US$.80/lb. on a deflated basis.

 

In a 90-page opinion, a judge of the US District Court for the Northern District of Illinois rejected claims by direct and indirect purchasers of broiler chicken that Agri Stats reports are part of a conspiracy to reduce output and increase the price of broiler chicken.

 

He ruled that participation in Agri Stats is not "sufficient to establish an intent to conspire," and that, "despite years of discovery, Plaintiffs simply have not produced sufficient evidence for a reasonable jury to find by a preponderance of the evidence that Agri Stats agreed with the producer defendants to restrict supply and increase the price of Broilers."

 

"Agri Stats welcomes Judge Durkin's ruling because it confirms what the industry has known for a long time: Agri Stats benchmarking reports increase competition and benefits consumers," said Brian Snyder, Agri Stats' president. "Agri Stats looks forward to the end of the baseless antitrust lawsuits against the company and the industry, so that we can focus on our core mission of helping to improve efficiency in the protein industry for our subscribers."

 

The judge's opinion found that "Agri Stats reports included only the production and pricing information of the recipient producer receiving the report, and not that of their competitors."

 

As a result, he reasoned that "The lack of production and pricing information in the Agri Stats reports undermines their usefulness for communicating intent to reach agreement to reduce production, as Plaintiffs originally alleged."

 

He further held that the forecasts and analyses generated by Agri Stats' subsidiary Express Markets Inc. also were not a "conduit for an agreement to reduce supply" as the forecasts and analyses were "based on publicly available information" and reflect "mere economic common sense applied to complicated data." EMI forecasts and analyses are available to anyone who wants to subscribe, including both producers and buyers.

 

Recognising the value of Agri Stats' benchmarking reports, the judge wrote: "…with the information exchange provided by Agri Stats creating a baseline in the Broiler industry, competing businesses participating in Agri Stats could believe that they had to participate in order to keep pace with their competitors and that they would need to work harder to make sure that they took better advantage of the information in the reports than their competitors."

 

Agri Stats said it looks forward to continuing its work of helping subscribers take advantage of improvement opportunities identified in its benchmarking reports.

  

- Agri Stats